Implementing an ERP organisation-management system is a long-term investment for an organisation, helping reduce the organisation’s costs in every area and helping plan the organisation’s operations in a positive direction. So a long-term investment must carefully consider the various costs that will arise.

This article covers the various factors that affect the cost of implementing an ERP organisation-management system, so readers have initial information to inform their decision.

The cost of implementing an ERP system depends on various factors:

1. The size of the enterprise

2. The complexity of the enterprise’s operations

3. Training staff in the organisation

4. Laying the IT-system foundation

5. System maintenance

6. Improving functions to fit the organisation

7. The licence fee for the ERP provider’s software

The details of these costs are as follows.

1. The size of the enterprise affects the cost of implementing an ERP system

By the nature of investment, when an enterprise is large, the money that must be invested in various parts to keep it running is also large.

Implementing an ERP organisation-management system is the same. The part that most clearly indicates cost is the number of users who will use the system.

That is, the enterprise must assess internally how many users in total will need to use the system concurrently — the cost of implementing the ERP system varies according to how many users there are.

In addition, a large enterprise may want a system with various modules covering every part of the enterprise, so the ERP system to be implemented in that enterprise will be a large system, and implementing a large system also requires a larger budget.

2. The complexity of the enterprise’s operations affects the cost of implementing an ERP system

An ERP system is a system that emphasises simplicity, meaning the ERP organisation-management system simplifies the various complex work paths within the organisation into paths that flow naturally, are orderly, and can be easily audited.

But…

before the various complex paths in the enterprise can be simplified, they must go through various operational steps,

whether gathering data and requirements,

developing and improving the ERP system so it can work with the enterprise’s complex operations,

testing the system to confirm it genuinely works, and so on.

These steps all take time and require skilled personnel on the development team, so this cost is also included in the cost of implementing the ERP system.

3. Training staff in the organisation affects the cost of implementing an ERP system

The provider must arrange trainers or a consulting team to come and train staff in the organisation to have the knowledge, understanding, and skills to use the ERP system.

The costs that arise include, for example, trainer fees, travel, accommodation, and meals.

If staff have completed training but still have problems using the system and still need the ERP provider to support and advise after the system is installed, the cost will depend on the details of the service contract the enterprise owner made with the ERP provider.

4. Laying the IT-system foundation affects the cost of implementing an ERP system

An ERP system is a tool that helps manage an organisation, and users access it through the computer.

So laying the organisation’s IT-system foundation to support the ERP system is extremely important.

Laying the enterprise’s IT-system foundation covers various matters as follows:

Procuring the necessary IT equipment to support the ERP system, including requirements for software, hardware, network, and backup systems, so the ERP system works efficiently.

This may require improving or upgrading what already exists and adding resources as needed.

5. System maintenance affects the cost of implementing an ERP system

After your enterprise has installed the ERP system, maintaining the ERP system is also important. Maintaining the ERP system is another factor that incurs follow-on cost. The details of maintaining the ERP system include, for example:

The cost of maintaining and updating the ERP system so the system is efficient and data security is improved.

The cost of preserving and backing up data in the ERP database to prevent data loss.

The cost of improving the ERP system to add new features or make the system work more efficiently, including upgrading the ERP system when a new version is released.

6. Improving functions to fit the organisation affects the cost of implementing an ERP system

Once an enterprise is using the ERP system, it may find that improving the functions at certain points of the system would help make the enterprise’s workflow more efficient.

The ERP provider can customise it to meet the customer’s needs.

The cost of customisation depends on the in-depth details that the customer and the ERP provider must discuss to reach a clear conclusion.

7. The licence fee for the ERP provider’s software affects the cost of implementing an ERP system

An ERP provider that has a development team and develops its own ERP organisation-management system will charge the customer a fee to use the system — or, put simply, a licence fee to use the system.

This licence fee depends on the size of the system and the judgement of the licence owner or ERP provider. Each ERP provider has different criteria for setting the licence fee.

There are many ERP providers — some ERP systems are developed by Thais, with the licence held by Thais; others are developed by foreigners, where the licence owner is foreign.

In the end, the decision of whether to implement an ERP system using a Thai or foreign licence is up to the customer.

Conclusion

In summary, the article “7 factors that definitely affect the cost of implementing an ERP system” lets those interested in implementing an ERP organisation-management system understand the costs and make an initial assessment of what form of ERP management system to invest in.

Because, as stated at the start of the article, investing in an ERP system is a long-term investment whose return comes in the form of increased efficiency in managing the organisation, while the operating costs in various parts of the enterprise fall measurably.

The value of the investment may not be seen immediately, but it will certainly come about if the customer invests in an ERP management system that suits their own enterprise.