How Much Does ERP Software Price In India?

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Nidhi Raghuvanshi

Senior editor

Parul Saxena

Chief editor

Last updated: December 28, 2020

In a dynamic marketplace, the only way to make your business flourish is to run it effectively and efficiently. You cannot use ad hoc practices that come and go because that can hinder your daily business operations. It is important to utilize automated solutions to optimize daily operations seamlessly.

Looking for ERP Software? Check out SoftwareSuggest’s list of Best ERP Software solutions.

In the last few years, global companies have witnessed a digital resurgence; therefore, they are looking for a cost-efficient ERP solution to streamline various business processes.

With the best ERP systems, enterprises can automate various operations with just a single-window to manage. ERP software can digitize supply-chains, accounting, customer relationships, sales, and marketing. They can also manage procurements, projects, risks, and compliance at a low price.

In this blog, we have enlisted some of India’s best ERP software, along with the price. Choose the solution that best fits your needs.

Fortunately, this list also allows customers to opt for an on-premise or cloud-based ERP tool, based on their budget and requirements. Companies can plan and execute a tight budget to minimize resource crunch and find a suitable ERP system for their business. They also have the liberty to choose the best proprietary or open-source ERP solutions. The price range of the ERP solution falls between 60,000 to 20 lakhs based on features, total users, functionalities, and more.

What is the Value of ERP Solutions?

Enterprise Resource Planning or ERP is a complex and essential business process. It is an automated solution tool that speeds up business operations without compromising on accuracy or quality. Micro-scale to large enterprises can greatly benefit from investing in an ERP solution.

Some of the best ERP systems or services often come in modules with automated components that manage specific business operations. This functionality allows you to choose an appropriate solution with some or many functions, including inventory, finance, payroll management, sales, marketing, HR modules, operations, and so on. 

You can also choose a comprehensive, integrated ERP solution and can get a reliable software package for about 1.5 lakh to 2 lakh Rupees. Large corporates have an array of global brand ERP software packages to choose from and the cost ranges between 25 lakhs to 1 crore.

However, for SMEs, many vendors simply offer 5 to 6 lakh worth of solutions. Because some of India’s small and medium enterprises only have around 1000 employees, they earn revenues ranging between 25 lakhs to 10 crores per annum, which is particularly true for the manufacturing sector.

Such companies don’t need to give ERP access to all the employees of the company. So, the cost range between 60,000 to 3 or 5 lakh Rupees is an affordable investment to make in an ERP solution.

What Is the ERP Implementation Cost in India?

An ideal ERP solution has to match a company’s budget. Along with being cost-effective, the program should also match all the specific requirements a business has. For this, do some research and only invest after you have found out the exact ERP software price in India. Always remember that it is a one-time, long-serving managerial decision.

ERP vendors offer a wide variety of impressive solutions. For example, Catalyst is a free ERP software for a single user. If you want to add more users, then the pricing policy will kick into action. On the other hand, you have vendors like ERPNext whose reasonably priced solutions cost just INR 4000 per user, per year. 

The implementation costs play a significant role when you want to customize ERP solutions to your business. Remember that a construction giant, a real estate company, and a travel agency, all three will have specific needs. Accordingly, the ERP set-up price can range anywhere between INR 20 lakh to INR 40 lakh. 

The market also includes large corporate providers, well-known SAP solutions, where the ERP specialists configure, activate, and maintain a total solution. Such a high-end market product will cost anywhere between INR 50 lakhs to a whopping 1 crore. 

The implementation prices depend on several factors, which are mentioned here:

  • Choosing the license fees and setting up a system for X number of users
  • Installing several training modules that improve employee acceptance
  • Selecting a rich set of features that are in tune with the company’s needs
  • Customizing the solution with sales, HR, marketing, CRM system, etc., modules
  • Ensuring anytime, anywhere access with mobility features (Smartphone apps)
  • Tackling legacy compatibility issues and improving data migrations

For implementing a complex solution like SAP, keep the following in mind:

  1. Implementation Period – 6 to 9 months that occur in a phased manner
  2. Total number of end-users – 200 to 600

Cost-Effective Criteria for ERP

Some vendors offer a fixed price for their proprietary ERP system, but these solutions also have a fixed number of features and modules. You can also purchase a limited number of licenses from vendors at a fixed price. The cost of the ERP software in India is entirely dynamic and unpredictable beyond market vendors.

The variability in costs mainly occurs due to the associated factors. This means, apart from the implementation cost, you also have to look at the total number of users for the ERP solution. You have to accurately calculate the infrastructure needs in terms of hardware and software.

There are several other generic and business-specific requirements you need to take into account. They include add-ons, different types of databases, backup options, reporting tools, on-site or remote connectivity, etc. The good news is some vendors are transparent about their up-front prices and don’t have hidden, additional costs. 

For example, Dignitech is a web-based, customizable solution that handles procurements, HR, finance, and supply chain operations. The vendor offers ERP software at INR 25,000. You can also purchase industry-specific software in the range of INR 12,000 to INR 20,000 per annum.

Low-Cost Ideas for Your ERP Solution

Here are some low-cost ideas that may interest you:

  • Choose a solution with a one-time purchasing cost only
  • It should not have any recurring subscription costs either
  • Do not ask for too many customization options in ERP software
  • Limit the total number of users and their accessibility options
  • Go for low-cost add-ons instead of upgraded license fees
  • Accurately calculate all the hardware and software demands
  • Negotiate annual maintenance and support costs beforehand
  • Do an early calculation of the 18% GST and other state-level taxes
  • Assign a project manager or team leader to liaison with vendor experts

Cost Customization for Your ERP System

Deploying an ERP solution is often riddled with many dangers. You have to prepare, plan, and execute a viable deployment strategy. Start by fixing a budget and sticking to the schedules to minimize the implementation expenses. Also, make sure you reduce the higher costs of ERP customization.

The ERP software price in India goes high due to business-specific demands. For example, the fashion business has very little in common with a real estate company because a generic, off-the-shelf solution may lack all the necessary features. For most companies, it is ideal to have a customized solution that can satisfy all the requirements.

The ERP customization process is neither simple nor straightforward. For instance, consider a manufacturing company with five factories or sites. A full-fledged ERP platform with all the business-related core functions and additional customization features will be costly for a manufacturing enterprise.

The deployment cost for such a solution is estimated to go anywhere between INR 4 lakhs to INR 15 lakhs. The price is so high because the solution is comprehensive. Within this range, a company can expect an ERP solution that can manage purchases, sales, inventory management, finance, and shipping.

Such high-priced solutions also offer CRM and customized tender management and customize all the company’s business documents. It also paved the path to streamline business logic and workflows, ultimately setting up for result-oriented productivity.

Customization can only be done for on-premise systems. So, you have the liberty to choose an integrated cloud solution and pay the price for the total services per user on a monthly or yearly basis. This system also excludes all the monthly rentals on the vendor-provided hardware and software.

The customization costs can go down by opting for a vanilla ERP, which is an out-of-the-box deployment technique without core design modifications.

Consumer Electronics

The traders and affiliated service providers have to pay a standard cost, ranging between INR 2,50,000 to INR 12,00,000. The buyer receives a fully customized, integrated solution with service management systems and all the ERP modules.

Construction Business

Real estate builders, developers, and agencies benefit from customized ERP. The cost of the solution ranges from INR 8,00,000 to INR 20,00,000. But here, the buyer only gets a single platform to manage all the complex business needs. The user can, however, enjoy a multi-device, multi-location access to the project along with a handy sales management system. They can also manage employees, brokers, and customer networks with ease.

Here are the cost estimation percentages by ERP activity:

  1.     Customization – 40%
  2.     Re-engineering – 30% to 35%
  3.     Training Costs – 35% upwards
  4.     Upgrades/Updates – 30% plus
  5.     Integration Costs – 28% to 35%
  6.     Maintenance Costs – 28%

Why Does Customer Support Matter?

There are no cheap ERP solutions because the system is very complex. The cost estimates have to factor in licensing, subscriptions, deployment, data import, and export. Besides, you cannot forgo the costs of hardware, software, maintenance, and training.

The price of the ERP software in India depends on several unavoidable expenses, which are mentioned below –

1. Personnel Costs

Legacy systems and data conversion require expertise, so the IT team has to get augmented by spending on hiring new talent. Specialized consultants also charge by the hour, and their services are indispensable for complex deployments.

2. Training Expenses

Since the new software has different file formats, documents, purchase orders, etc., training is a hidden and hard-to-estimate cost for any business.  From a manager’s point of view, it also has innovative report generators and analytics tools, so you will have to incur training expenses to make employees more skilled.

3. Testing Solutions

You need to test scripts, modules, and other functional components and also ensure legacy and device compatibility. Besides, you need to check the process workflows in real-time to prevent business breakdown. Such testing requires more resources and capital, and automated testing apps cost even more as they speed up the operations.

4. Customization

Customization and integration are essential for new ERP solutions as these two deployment techniques ensure business model compatibility. The ERP features and functions will satisfy the company’s specific processes, which include anything from payments to user interfaces. 

5. Employee Co-Operation

You also have to consider employee satisfaction levels while implementing new solutions. The ERP software price in India has to factor in adaptation. Your company’s workforce has to undergo training and has to be cajoled and promised higher salaries, otherwise, there are chances of resistance, non-cooperation, or delay in the system.

6. Re-Engineering

Not many ERP systems factor in specific business dynamics. The company’s needs and business processes may have to undergo drastic changes. If the ERP solution is not scalable or flexible, then problems may arise. Therefore, keep in mind that reengineering is a lot cheaper than customization.

7. Ongoing Maintenance

It is easier to manage all of the above-mentioned costs with adequate support. Always choose a vendor that offers transparent maintenance services. Your vendor needs to be upfront about the cost of support, be it cloud-based ERP service or on-premise software. Don’t forget to consider the recurring support fees when you initially place a budget for the ERP product.

Cost-Benefit Analysis

As a discerning consumer, you have to carry out a cost-benefit analysis. Don’t forget about the returns on investment when you purchase a tech-based solution, especially when you spend a considerable amount of money from your capital. Therefore, analyze the ERP software price in India with factors like efficiency, productivity, flexibility, etc.

Lower costs are desirable, but they are not the only criterion. If you want a cloud-powered ERP solution, then you have to spend more. Enjoy benefits in the form of powerful analytics, mobile-friendly access, and social media integration.

The benefits have to emphatically outweigh the incurred costs. A higher return on investment (ROI) has to be legit within a time frame. Your detailed analysis should factor in the intangible benefits; however, it should still be quantitative and focus on financial performance and net profit margins.

Business-Friendly ERP

Remember, around 90% of businesses are satisfied with ERP solutions. Their capital expenditure is in tens of lakhs of Rupees. And they also incur recurring costs in the form of subscription fees and maintenance charges. Despite all that, the ERP software price in India is well justified by them.

Even an expensive ERP software is justifiable by businesses because it offers the following number of benefits businesses receive over a long period –

  •  It is business-friendly software that is completely integrated with the workflows
  • It has data-intensive features and functions to ensure reliability and accuracy
  • The ERP solution automates and simplifies crucial business processes
  • The system reduces the stress levels for upper management because it offers all-encompassing services
  • Team communications and information access become secure and fast
  • Employees are satisfied and they contribute to value-added activities
  • Productivity increases at all levels, from executives to the senior cadre
  • Senior managers make efficient decisions based on reports and analytics
  • The company’s vision and socio-cultural ideals can be realized quickly

Tips to Cut Down ERP Costs

Air India Case Study

Air India, a low-cost airline, experienced a severe crisis in 2009. It’s passenger and cargo services were failing, so they had to adopt best practices and reduce costs to increase accountability. Their turnaround plan’s budget included a dedicated ERP software.

They tried implementing a well-designed SAP solution in multiple phases but faced major hurdles in the process. 

The main reason behind these obstacles was a lack of coordination, delays, and data consistency. The project team learned essential lessons in reducing tech acquisition and maintenance costs.

Other Useful ERP Tips

To avoid facing such unwanted obstacles, make sure to follow these steps:

  • Select a vendor who charges transparent prices without hidden costs
  • Prepare a detailed cost estimation and follow a clear-cut project plan
  • Do not neglect unexpected costs due to changes in requirements
  • Carry out market research and opt for the best-fitting ERP software
  • Screen the vendors and prefer those who are willing to negotiate prices

Pricing Plans

The best ERP software price in India comes with flexible plans. The vendors also ensure pricing flexibility to satisfy the customers.

Some of the standard pricing policies are mentioned here:

  • Monthly subscriptions with upgrades and support services
  • Unlimited user packages without any additional expenses
  • Low-risk capital expenditures and post-deployment billing
  • No upfront costs and payment privileges after the second year
  • Different payment gateways like credit cards, bank transfers, cash, check, etc.

Conclusion

To sum up, the ERP software price in India depends on different factors. The cost varies for open-source, proprietary, on-premise, and cloud solutions. The ERP system is invaluable for your business, and it is a great way to implement an inexpensive system that befits your company. Perform a detailed cost-benefit analysis at the initial phase.

Since ERP solutions are diverse, there is no fixed or right price. For micro-companies, there are online services priced between INR 10,000 and INR 60,000 per annum. You can also opt for top-rated, integrated software. The cost is between INR 5 to 6 lakhs for SMEs, while a corporate has to shell out anywhere between INR 25 lakhs to INR 1 crore. 

Find the right balance between business-friendly features and pricing plans

  • Stick to a pre-defined strategy and avoid overshooting the budget
  • Make sure the ERP service vendor also offers long term support
  • Be upfront about the prices
  • Don’t engage vendors who charge additional, hidden costs

Sample Pricing Policy

Inventory Software – INR 600 per month per user (a minimum of two users)

Accounting Software – INR 850 per month per user (a minimum of two users)

Manufacturing Software – INR 1200 per month per user (a minimum of three users)

Cloud ERP Software – INR 1800 per month per user (a minimum of five

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Passionate Digital Marketer & Software Analyst. I recognize the importance of interactive engagement in today’s world and works towards building a steady flow of relevant, user-oriented content to obtain high-rank placement in search engine results.

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