Learn about total cost, business benefits, cloud and SaaS, AI integration, and more
Implementing an Enterprise Resource Planning (ERP) system is a strategic investment that can provide long-term benefits and drive business growth. A modern ERP system connects all business processes across accounting and finance, risk management, enterprise performance management (EPM), and more, providing a single source of truth for data.
If you're considering implementing a new ERP system, it's important to consider the total cost of ownership, including the initial purchase price, customization costs, deployment costs, and ongoing maintenance and support fees. Unfortunately, the bad news is that there are often more costs associated with ERP than you might initially think.
Direct ERP costs
The first area to consider is software costs. This includes annual maintenance and support fees, as well as license fees, which will depend on the size and complexity of your organization, as well as the number of users. Additionally, you will need to factor in the cost of customization and any additional software modules or add-ons you may need to support your business processes. To minimize software costs, carefully evaluate ERP vendors and weigh your deployment options.
Another important factor to consider is ERP implementation costs, which can include expenses associated with planning, project management, and deployment, as well as any hardware or infrastructure upgrades. Identifying the scope of the implementation, determining what internal resources and third parties you will need, and estimating the project timeline and hourly rate of these resources can help you minimize these costs.
Indirect ERP costs
Support and maintenance costs are ongoing expenses associated with keeping the ERP system running smoothly. To minimize these costs, invest in ongoing system monitoring and optimization to ensure your system meets evolving business needs.
Organizational change management (OCM) is another often-overlooked cost. This includes expenses related to ongoing end-user training and communication, as well as resistance management. To minimize the cost of project delays due to poor change management, it's important to start planning OCM activities early and involve employees in the ERP selection process.
Data conversion costs involve moving data from your existing systems into the new ERP system. This process includes activities such as data analysis and mapping, data cleansing, and data migration, especially as you prepare for business intelligence. Developing a comprehensive data conversion plan as early as possible can help minimize these costs. Integration costs can be expensive, especially if your organization has a complex IT infrastructure. It's important to select a vendor or system integrator that has experience in integrating with your systems.
Estimating ERP total cost of ownership
It's crucial to consider all the above factors, not just in the immediate term but over the expected life of the system, to estimate your ERP total cost of ownership. Once you've estimated these costs, your next task is estimating the tangible and intangible business benefits you expect to realize, so you can calculate the return on investment.
Implementing an ERP system can be a significant investment, but it also offers numerous benefits that can justify the cost. According to Statista, the ERP market continues to grow. In 2025, the average spend per Employee in the ERP market is forecasted to reach US $15.55, and the market is expected to reach US $55.88 billion.
Business benefits of implementing an ERP
There are numerous business benefits to justify modernizing your ERP system. According to Gartner, ERP applications automate and support multiple administrative and operational business processes, including line-of-business, customer-facing, administrative and the asset management aspects of an enterprise.
Although ERP is considered a “strategic investment,” confusion has grown and alignment to business strategy has only weakened with the fast pace of ERP technology changes in recent years (e.g., SaaS, aPaaS and embedded AI capabilities).
A new era of ERP is emerging, defined by the transformative convergence of cloud computing, artificial intelligence (AI), and digital innovation. This exploration delves deep into the expansive realm of possibilities materializing through AI integration in next-generation ERP.
The cornerstone of digital evolution is cloud transformation, serving as the foundational bedrock for seamlessly integrating AI into ERP systems. Real-time visibility and industry insights facilitated by cloud computing empower businesses to make data-driven decisions, ushering in a paradigm shift that not only revolutionizes operations but also nurtures a culture of continuous innovation.
Top 10 ERP business benefits
The future of ERP unfolds as an exhilarating convergence of cloud computing and AI, promising a landscape with boundless possibility. The transformative power of AI in next-generation ERP opens up a realm of opportunities, enabling businesses to navigate the expansive horizons of success and innovation with confidence. Embracing this fusion of technology and strategic vision positions organizations not merely as spectators but as active participants in the unfolding narrative of ERP evolution.
Over the last ten last ten years we have seen SaaS ERP systems dominate the ERP marketplace because of lower upfront costs, faster implementation timelines, automated updates, scalable regional and global solutions, and accessibility from most anywhere.
Some key business benefits that enterprises can experience from ERP include:
- Improved efficiency and productivity - ERP systems streamline workflows and automate repetitive tasks, leading to increased efficiency and productivity. It also reduces manual work, allowing CFOs to spend less time each quarter compiling data—and more time on scenario planning and M&A strategizing.
- Enhanced data security - Centralizing data in one system improves data security and reduces the risk of data breaches. To monitor and protect companies from internal and external theft and fraud, modern ERP systems offer internal controls and audit tools to manage segregation of duties (SOD) and payment rules.
- Better decision-making - ERP systems provide real-time reporting and analytics, enabling better decision-making based on accurate and up-to-date information, and a single source of the truth. By leveraging the strengths of both ERP and BI, businesses can improve their operations, make better decisions, and ultimately increase profitability.
- Cost savings - By automating processes and reducing manual work, ERP systems can lead to significant cost savings over time.
- Scalability and flexibility - ERP systems are scalable and can be customized to meet the changing needs of a growing business. Cloud ERP provides unmatched speed, performance, security, and scale, allowing businesses to grow with confidence.
- Improved customer service - With better access to customer information and streamlined processes, businesses can provide better customer service.
- Compliance support - ERP systems help businesses comply with industry regulations by providing standardized processes and accurate reporting.
- Support for remote workforces - Implements strong hybrid and remote work collaboration practices.
- Supply chain visibility and resilience - Enhances supply chain visibility for effective tracking and management.
- Flexible commerce - Modern ERP easily adapts to changing market demands and customer preferences.
How artificial intelligence enhances ERP functionality
AI embedded into ERP adds even more business benefits for modern enterprises:
- Harnessing data for informed decision-making - AI in ERP systems presents a paradigm shift by offering real-time financial insights and predictive analytics for informed and efficient decision-making.
- Improving efficiency and compliance - AI automates routine tasks and ensures regulatory compliance, allowing finance teams to focus on strategic initiatives.
- Strengthening security and fraud detection - AI enhances security measures and detects patterns in real-time, mitigating the risk of data breaches and fraud.
- Optimizing cash flow and financial performance - AI aids in intelligent cash flow management and optimization, crucial for operational efficiency.
How to select the right ERP partner
Selecting the right ERP implementation partner is crucial for the success of your project. Look for a partner with a proven track record of successful ERP implementations, especially within your industry. They should have a deep understanding of your business processes and challenges. Ensure the partner has in-depth knowledge of the software you choose and a well-defined and structured implementation methodology. This should include detailed steps for each phase of the project, from planning to execution and support. Research the partner's reputation in the market. Look for reviews, testimonials, and client case studies. A partner with a strong reputation is more likely to deliver a successful project.
The partner should have a skilled team with expertise in ERP systems, project management, and change management. This ensures they can handle all aspects of the implementation. Ensure the partner provides comprehensive support and training services. This includes post-implementation support to address any issues and training for your staff to ensure they can effectively use the new system. A good partner should be flexible and adaptable to changes during the project. They should be able to handle unforeseen issues and adjust the project plan as needed.
Conclusion
Upgrading to a new ERP system isn't just a tech thing – it's a smart move for enterprises who want to stay ahead in the game. The limitations of outdated, monolithic ERP systems just won't cut it in the fast-paced world of modern business. It brings advanced tech to your fingertips, helps you make decisions based on real data, and keeps your whole operation running like a well-tuned machine.
We'd love to delve deeper into the conversation about implementing a new ERP system. Feel free to reach out to us at your convenience to initiate a discussion and take advantage of a complimentary assessment.