ERP Software Pricing: Software Tiers [Segments]

Continuing the Discussion – previously on the cost of Inventory Management Software

A common problem when searching for a software system is setting a budget. After all, there are so many options and they range greatly in price. In this post we will determine some strategies for setting a budget depending on your needs and what “software tier” you are seeking.

3 Major Software Segments

The first step in setting a budget is determining what major software segment you are considering. At a macro-level there are 3 main segments:

software-tiers-levelsIntroductory/basic systems

  • These systems typically accommodate one business process but on the upper end may accomplish several.
  • They are not true ERP systems and often must be integrated with many other systems to offer solutions across business operations
  • Examples include: QuickBooks, Fishbowl, Simply Accounting
  • Price range: $100-$10,000

Middle-tier

  • These systems offer full ERP functionality across business functions (i.e. inventory management, accounting, CRM, eCommerce etc.)
  • Examples include: Blue Link
  • Price range: $10,000-$100,000

Top-tier (Blue Chip)

  • These systems offer full ERP functionality on a scale necessary for vast organizations with global operations. The complexity of their operations necessitates a significant capital spend
  • Examples include: SAP, Oracle, Infor
  • Price range: $100,000-Many Millions

These tiers offer a basis for determining a budget based on the following factors:

  • Company size
  • Desired level of integration and functionality
  • Goals and objectivesDownload ERP Software Pricing Guide

Introductory systems offer a great solution for many start-up companies or small “mom and pop” businesses. In order to facilitate growth, a proper middle-tier package will be needed at some stage. Middle-tier systems allow a vast amount of growth – allowing a company to transition from an introductory system far into the future. A top tier system may never be required, but if so, it will become readily apparent that it is necessary (multiple global divisions, vast numbers of employees etc.).

10 Responses to ERP Software Pricing: Software Tiers [Segments]

  1. Quora says:

    How do you determine your budget for ERP software?…

    This blog post covers some of the basics. Does anyone else have any more tipcs? Budget formulation seems to be one of the biggest stumbling blocks in the ERP software industry http://blog.bluelinkerp.com/2011/09/20/erp-software-pricing-software-tiers-s

  2. fuad says:

    is it possible to customize some options as desired , as all the companies have different kind of structures … ?

  3. Mark Canes says:

    Fuad, that’s a good question. You’ll typically find that introductory / basic systems are as-is, out of the box, and the top tier systems are pretty much all customizable. Most middle-tier solutions offer at least some degree of customization or configurability.

  4. Very few tier 1 implementations result in a positive return on investment whilst 95% of lower tier implementations generate very definable positive returns. See the example cost and benefit analysis for help with this calculation.

  5. [...] How big and complex is your business? It is appropriate for a small mom & pop pizza shop to run on QuickBooks whereas it would not be appropriate for most distributors and wholesalers to do so. It is appropriate for small and simple businesses to use introductory systems while those managing inventory, accounting, a warehouse, product costing and sales require software in an entirely different segment. Learn more about the different segments of software and their relative pricing. [...]

  6. [...] may not be easy, however, as the next step can seem prohibitively expensive. Read our article on ERP Software Pricing: Software Tiers to set realistic expectations in your software search. Rate this:Share [...]

  7. Quora says:

    How much do the major business process automation software packages cost?…

    The prices of business process automation software packages can vary greatly depending on the functionality needed and size of the company. For example ERP inventory and accounting software can vary between $100 to millions of dollars as discussed in t…

  8. Quora says:

    What are the most common ERP or accounting software used in small to medium business?…

    It is hard to answer this question without first knowing more information about the company – size and functionality will greatly influence which software a company uses. The software you suggested, although great, are suitable for very basic functiona…

  9. Quora says:

    What’s the best cloud accounting solution for small business?…

    I work for Blue Link Associates and we offer fully integrated accounting and inventory management software for small-medium sized businesses, specifically wholesalers and distributors. We have both an on-premise and cloud application and can customize …

  10. [...] how much will the next step cost? Using our ERP Software Pricing Guide you can begin to set realistic expectations of what it will cost to move onto the next level of [...]

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