ERP comparison - rent or buy ERP
Companies often face a difficult decision here
Whoever wants to integrate ERP software has a variety of possibilities to implement this. All possibilities have one thing in common, namely that the purchaser only has a right of use. The manufacturer of the software always remains the owner. Meanwhile software developers have adapted to the needs of their customers to offer the perfect ERP solution to the customers, because without ERP system nothing works anymore.
In many companies, ERP systems have become indispensable. Now it is the case that companies no longer have to buy immediately but also have the possibility to rent the ERP system.
Programs are therefore not only sales products, but monthly paid services. We are talking about the term "Software as a Service" (Saas). There are programs that still run on the computer but also programs that run on the servers of the providers and therefore directly in the browser.
Enterprise Resource Planning
The most common way to integrate an ERP solution in a company is to purchase ERP software. This means that companies buy the right to freely dispose of the software and, depending on the software, can adapt the ERP program themselves.
Anyone who decides to use ERP software does so for a long period of time. One aims at a life span of the software of approx. 5 years. However, many companies use the software much longer, because the whole process involves a very high time and cost factor.
It is therefore advisable to make an ERP comparison before you plunge into high costs.
Smaller companies in particular do not have the financial means and opt for affordable options. Especially with open source programs, the cost of licenses and manual adjustments by experienced hands should not be underestimated. After all, it is often the case that changes and adjustments are necessary and cannot be realized without programming knowledge.
Hidden here are additional costs
How much does ERP software cost?
ERP costs are made up of many factors. Pricing can vary depending on the size of the company and depends, for example, on the number of users, the scope of functions, the license and the license costs.
When purchasing an ERP solution, the licenses for the modules are purchased at the beginning of the implementation. The customer can then use the purchased ERP software in the company without restriction and for an unlimited period of time. With an ERP software there are many products, such as Odoo Open Source ERP , which can be bundled from many modules and are, so to speak, modular. The company can decide at any time to add further functions to its ERP system to expand it. It is often the case that an annual fee is added for maintenance and service, which includes regular updates of new versions. This annual software maintenance fee is between 10% and 20% of the license value of the modules purchased. By default, the annual fees are paid in advance.
Advantages of purchasing ERP software
One-time license fee on acquisition
Lower costs in the long run
One-time expenditure of time in the long run
Disadvantages of purchasing ERP software
High investment during implementation
High liquidity burden
Expensive release fees
Annual fee for maintenance and support
Reduced risk of misinvestment
The rental solution of an ERP system is a good alternative to buying the software. Thanks to the monthly installments, renting an ERP software is easy on the liquidity of a company. A plus point is that the ERP rental model can be used immediately and can be put to use from the first minute. Especially small companies, which shy away from larger investments, will be right for the beginning with an ERP rental solution.
The risk of making a bad investment is minimized because you do not have to pay large sums of money for an entire ERP software. You can see the rental solution as a test and decide whether the ERP system meets your expectations. This saves companies a lot of money for wrong decisions.
However, the ERP rental solution also incurs costs for implementing the ERP software. These include costs for installation, transfer of company data, training and support. However, these costs vary from vendor to vendor. Hosting the enterprise data on a dedicated server also incurs costs, as the ERP vendor and hosting are not usually done by the same vendor.
Advantages of renting ERP software
low investment costs
Avoidance of misinvestment
Conservation of liquidity
Flexibility for required functions and number of users
Disadvantages of renting ERP software
no access to the hardware
Dependence on the ERP supplier
Data are external
higher costs in the long run
Whatever you decide, we have a solution for you.
Our team will gladly advise you.