6 Hidden costs you might never realize you're paying for:
1. "System Cost" is usually only the basic edition of the software
Published pricing often refers to the basic package of the ERP. This is often the basic edition of the software. You are likely to be charged extra fees for additional modules, which, ironically, are what attracted you to the ERP in the first place. So if you’re getting a complete ERP suite expect to shell out more money.
2. "User licensing Cost" increases as the number of users increase
Many vendors charge by user license, that is, there’s a fee for every person using the system. The published price may just refer to a single user (it is often the case), so you better enquire wisely regarding user license.
If you have a pool of ERP users in your organization, it is often cost-effective to get a multiple license or search for vendors who offer multiple users at one license.
3. "Database licensing Cost" is charged per database
ERP solution deployment needs lots of databases to process the information. Some vendors charge per database license, the more wide-reaching your datasets are—for example, inventory, manufacturing, human resources, and payment have different databases—the higher your total cost.
4. "Remote access Cost" is separately chargeable
Mobile accounting is the toast of today’s ERP solutions. Imagine your sales and inventory teams can interact on-location and real-time, through smart phones that can access your on-premise or cloud ERP via Internet . But, often, vendors charge an add-on fee for remote access. Again, enquire wisely even if you see mobile access is included in the product’s promotional materials.
5. "Support Cost" is only for a limited period of time
Normally, you’ll be given a limited period of “free” technical support (e.g., three months), but after that, you’ll be charged with a per month subscription fee. Paid support can include basic customer support and learning tools and solutions, which, in some cases, benefit SMEs without an in-house technical team. It’s like outsourcing your I.T. staff. Just make sure the paid subscription support has enough inclusions to justify the cost.
6. "Upgrade Cost" is advisable but should only depend on your requirement
Be careful while paying for system upgrades. Most of the times, vendors use tactics, where they hide the need to upgrade the ERP on a regular basis for a fee. You end up paying for additional fees just to keep your ERP running properly.
Nilesh Roy | 22nd August 2016.