Investing in an ERP migration is much more than a simple software update: its price depends on a multitude of items, often underestimated (licenses, training, integration, etc.). For optimized management, it is essential to anticipate these “hidden” costs to avoid unpleasant surprises.
Determining the Cost of an ERP Migration
Modernizing your business management has led you to a crucial decision: acquiring a new ERP software. This graphical interface operating technology is developed to centralize and simplify core business operations, whether for managing your agency, your IT services company, your startup, your consulting firm, or within your teams. The choice is as vast as the needs are specific.
Beyond technical challenges and organizational needs, a key element stands out and permeates your discussions – and it’s not just Sylvie, your beloved CFO, who’s thinking about it…
This article aims to demystify the question on everyone’s mind: “What will be the real costs of this change?” From acquisition to hosting, including integrator services, you are not just choosing a software package or a simple CRM. You will be opting for an ERP solution – or Integrated Management Software (PGI) in French – which can prove to be doubly beneficial. It helps optimize the productivity of each workstation and makes every process more efficient.
The proprietary ERP you are looking for must be accessible and adapted to the size of your market and your agency. The price varies greatly depending on several factors, including:
- the number of employees to train
- industry-specific features
- the graphical interface developed by Microsoft or other providers
- the type of hosting chosen.
It is essential to have an exhaustive list of prices and hidden costs to optimize budget allocation — and to successfully calculate the profitability for your agency or IT services company from the planning phase of your future ERP implementation.
The goal is to provide your employees with a tool that will improve accounting, sales, customer management, and many other essential practices — in other words, a true profitability management software for agencies and IT services companies designed to centralize and maximize performance.
Cost of an ERP Migration for an Agency or IT Services Company
Agencies often focus on monthly user fees, which vary from one vendor to another. However, just like buying a new car, “hidden” costs can also come into play… and must be anticipated for your peace of mind (and Sylvie’s).
Here are the 5 expenses to consider before choosing an ERP:
External Migration Costs
First, the vendor you have chosen includes fees in addition to the monthly user rate. For example: implementation fees, support and training fees, follow-up fees with the back-office (some vendors limit exchanges and charge for additional follow-ups), etc.
At Furious, until further notice, we offer instance creation, setup, and training fees to our VSE-SME clients. This is our way of showing solidarity with them during these particular times and allowing them to easily equip themselves with a sophisticated and comprehensive management tool.
Other external costs to consider include:
- External consultant fees if you are accompanied by consultants for your reorganization
- Your accounting firm’s fees: some charge for any change;
- Potential fees for adapting other tools: hence the benefit of choosing a broad-scope solution to avoid multiple licensing costs and adaptations.
Furious, for example, replaces an average of 7 tools for our clients!
Internal Migration Costs
Sometimes more difficult to quantify, ERP migration costs include:
- Time spent on user migration
- Training time, which can be reduced with a solution that offers ad-hoc support for optimal efficiency
- Support during and after the testing phase: in addition to its user-dedicated back-office, Furious offers over 250 educational videos, each less than 2 minutes long, directly and freely accessible on the platform, which are very useful for any questions.
- Streamlining your company’s processes (see point 5 here)
- Project team availability to plan for
- The upstream preparation phase, particularly regarding info/data integration + the tool testing phase.
As part of your migration to Furious, our teams will assist you with data import and help you configure and customize the ERP to best meet your needs.
An ERP’s Architecture is Influenced by its Cost and Performance
An ERP’s architecture is one of the determining factors in the total cost of implementing such a system. It refers to how the different modules, the database, and external integrations are organized and interconnected.
A well-designed architecture offers several key advantages:
- Reduced maintenance costs: Well-structured systems require fewer patches and interventions.
- Ease of integration: Interoperable APIs and modules reduce costs related to adapting existing tools.
- Scalability: A good architecture allows for adding new modules or users without disproportionate additional costs.
Fees from the Vendor(s) You Are Leaving
Our clients are sometimes surprised to discover that some vendors bind them with contracts until an anniversary date. Early termination then becomes chargeable.
For your information, commitment with Furious is only quarterly: we are indeed convinced that our clients stay with us because the tool helps them daily, not because they signed for one or three years!
Furthermore, some vendors also charge for data recovery. At Furious, all data from your instance belongs to you. It can be exported at any time by authorized company personnel, without additional fees.
Tiered Pricing Fees
Beware of aggressive pricing policies that can lead to unpleasant surprises in case of growth or after the first year.
Questions to ask yourself before any commitment:
Is there a price re-evaluation clause? Google or Slack, for example, recently unilaterally increased their prices.
What is the basis for price updates?
Have you negotiated upward (if you grow) or downward tiers? Example: at Furious, the more your company grows (and thus the more users you have on the platform), the lower the per-user rate becomes.
What are the billing cycles?
Are there additional fees (storage space, free or paid options, API, etc.)?
Fees if the Solution Doesn’t Suit You/Doesn’t Work
The testing phase is important and should not be limited to 2 weeks (unless you wish).
Indeed, it is important that you can discover the full power of the management tool, and especially that you feel confident about the responsiveness and support of the chosen vendor.
Nevertheless, if you wish to discontinue the collaboration, you will be glad to have anticipated by asking the right questions:
- Have you thoroughly checked the reversibility clauses?
- Will you have access to your data without additional fees?
Understanding the Cost of an ERP
Investing in an ERP is a major decision for any company. The associated cost can be substantial, but it is justified by the added value the tool can bring. Understanding this cost in detail is essential for making an informed choice and getting the most out of your investment.
Essential ERP Components and Their Impact on Price
An ERP is like a living organism within your company, composed of several essential elements that determine its efficiency and, by extension, its price:
- Unique database: the core of the ERP, where all your data is centralized.
- Functional modules: financial management, procurement, inventory, etc. Each module adds value, but also to the cost.
- Integration: the ERP’s ability to connect with other systems can increase initial costs.
- Customization: adjustments to perfectly match your processes can be costly.
- Training and support: essential for optimal use, these services have a direct impact on the budget.
Each component has its price, and the balance between necessity and cost is crucial.
How Does the Choice Between SaaS and On-Premise ERP Influence the Budget?
Choosing between a SaaS (Software as a Service) ERP and an on-premise solution is crucial for the budget:
In the case of SaaS, you generally pay a monthly subscription per user. This includes maintenance and updates. There are fewer fixed costs and it involves an ongoing cost.
On-premise ERP requires a larger initial investment for license purchase, infrastructure, and labor for management and maintenance.
Your choice will affect not only your initial expenses but also your long-term budget structure.
ERP Cost Varies According to Specific Features
The features you choose directly define the complexity and thus the selling price of your ERP:
- Standard vs. Advanced: the more advanced or specialized the features, the higher the price.
- Customization: adjustments to adapt to your company’s unique processes can lead to additional costs.
- Scalability: the ERP’s ability to evolve with your company can also be a cost factor.
Think about the future and not just current needs to avoid unexpected additional costs.
What are the Advantages of a Modular ERP for Cost Management?
A modular ERP can be the solution for managing costs:
- Pay only for what you need: start with basic modules and add more as you go.
- Flexibility: easily adapts to your evolving needs without major reinvestment.
- Phased implementation: reduces risks and allows for better expense management.
The modular approach is an effective way to control the budget while benefiting from the flexibility necessary for business growth.
What Budget Should You Allocate for ERP Integration?
Integration and customization are two aspects that can significantly affect your budget:
- Integration: ensure that the ERP can connect seamlessly with existing systems, which may require additional technical work.
- Customization: adapting the ERP to your processes can be costly, but it is often essential to fully leverage its capabilities.
Allocate a portion of the budget for these crucial steps. They are fundamental for the ERP to align with the strategic vision and operational objectives of the agency or IT services company.
ERP Pricing Dissected
Implementing an ERP system is a significant investment for any company, and even more so for an SME where every euro counts. Understanding the pricing structure can help make wise choices and anticipate costs.
For an SME, the price of an ERP is generally structured around several key areas:
- User licenses: depending on whether the ERP is on-premise or SaaS, costs vary between license purchase and subscription.
- Implementation costs: including system installation, configuration, and customization.
- Training: essential for users to master the tool.
- Maintenance and support: to ensure proper functioning and updates.
Understanding these elements is vital for evaluating the true cost and avoiding budget surprises.
What is the Average Price of an ERP for an SME?
The average price of an ERP for an SME can vary significantly, generally between 10,000 and 100,000 euros, depending on several factors:
- Complexity: the more complex the company’s processes, the higher the price.
- Number of users: most ERPs become more expensive as the number of users increases.
- Level of customization: company-specific customizations can increase costs.
These ranges are indicative and may change depending on specific requirements and technological choices.
ERP Selection Criteria
Choosing an ERP system is a strategic decision for any company. Selection criteria must align with business needs, company size, and long-term vision.
Cloud, Proprietary, SaaS: How to Choose the Right ERP?
The choice between a cloud, proprietary, or SaaS ERP depends on several factors such as flexibility, control points, and budget.
Recommended for its flexibility, scalability, and ease of updates, the cloud is ideal for companies needing mobility and real-time collaboration.
For stricter control over security and customization, owning the ERP is recommended. This option suits companies with specific processes requiring tailor-made solutions.
The SaaS model allows for reducing initial costs and offers ease of use. Preferable for SMEs looking to avoid hardware investments and IT maintenance.
Maintenance and Support: Ensuring Tool Functionality
What Importance Should Be Given to Modularity and Automation in Choosing an ERP?
Modularity allows you to choose specific features that match the immediate needs of the company, with the possibility of adding additional modules later.
Automation integrated into the ERP can free up time by reducing manual tasks and minimizing errors. These aspects must be evaluated based on the company’s long-term objectives and growth strategy.
ERP Diagnosis: Assessing Your Needs to Determine a Price
To perform an ERP diagnosis, you need to:
- Evaluate existing business processes and identify gaps.
- Determine essential and optional functionalities.
- Understand necessary integrations with other systems.
- Consult end-users to understand their daily needs.
An accurate assessment of needs directly influences the price, avoiding superfluous costs for unnecessary features.
ERP Project Planning and Management
Implementing an ERP in an agency or IT services company requires careful planning and rigorous management to ensure project success and budget control.
How to establish precise specifications for your ERP?
To establish precise specifications, it is crucial to:
- Identify and document detailed business requirements.
- Define the specific objectives the ERP must achieve.
- Include technical, legal, and budget constraints.
- Anticipate training and support needs.
Well-defined specifications will guide the choice of the ERP solution and negotiations with suppliers.
What are the key steps to budgeting an ERP project?
The key steps to budgeting an ERP project include:
- Estimating license or subscription costs.
- Calculating implementation fees, including customization and integration.
- Forecasting training and support expenses.
- Anticipating operational and maintenance costs.
Accurate and realistic budgeting will prevent unexpected cost overruns.
ERP and Scalability: How to anticipate future costs?
Anticipating future costs involves looking beyond the initial investment:
- Selecting an ERP system with a scalable architecture.
- Evaluating the costs of upgrades and adding new modules or users.
- Considering ongoing training and skill update costs.
- Planning for long-term maintenance and extended support.
Anticipating these costs will ensure the longevity of the ERP investment and support business growth.
In short, as you will have understood, good anticipation of potential additional costs will allow you to avoid unpleasant surprises. The choice of an ERP is strategic and also needs to be planned financially.
On average, allow one month for internal preparation, then 2 to 3 months for migration.
You might be Asking Yourself these Questions?
01 why is it Risky to Use Multiple Unconnected Tools?
Because it multiplies re-entries, oversights, and interpretation discrepancies. Result: wasted time, errors, and difficulty in managing profitability.
02 is a Centralized Tool Suitable for all Agency Sizes?
Yes, provided it’s modular. Furious, for example, is designed to adapt to both a 15-person structure and a 150-person agency.
03 What Data is a Priority to Connect?
Scheduling, workload, time spent, allocated budget, and margin. These are the foundations of your operational performance.
04 Can We Start Small with Integration?
Absolutely. Some agencies start by connecting scheduling and time tracking before adding budget tracking.
05 how Long Does it Take to Switch to a Centralized Solution?
It depends on your organization, but most agencies migrate in 4 to 8 weeks, with dedicated support.
06 Can Furious Replace My Scheduling, Time, and Budget Tool?
Yes. Furious was designed to bring all these components together in a single environment, without losing precision or flexibility.
