Understanding ERP Software Licensing and Maintenance Fees | Global Shop Solutions

Implementation of an enterprise resource planning (ERP) system is a process that requires a number of variables to be weighed. Introducing a system of this kind into a company’s operation provides a number of different benefits. However, careful considerations must be made prior to installation to avoid any issues that may arise after the platform has been installed. One of the most critical decisions that organizational leaders must make when deciding on an ERP software solution is licensing.

This is a cost-related factor that must never be overlooked and making a choice that isn’t the best option for the company can really drive up the total price of the implementation. According to JD Supra, decision-makers must work with the ERP vendor to negotiate maintenance and licensing fees to ensure the system is working properly at all times.

Here are a number of helpful tips for organizational leaders to ensure that certain provisions put in place prior to implementation protects the company from the day the system is finally brought online and beyond:

1. Understand licensing options: There are many different ways that companies can ensure that their end-user licenses are always current and up to date. Software Advice wrote that companies should ask vendors if licenses will need to be renewed on a system wide or individual user basis. For companies expecting sizeable growth, agreeing on a user-based pricing model is more advantageous and cost effective.
2. Become familiar with maintenance fees: As is true with technology, at some point, it will need to have maintenance done to continue functioning at an optimal level. When this happens, many ERP software companies will assess a fee to service the system. Decision-makers should be sure items such as training and upgrades are included in these fees.
3. Speak with other clients of the ERP vendor: Sometimes, the best way to become familiar with the way a company operates is to get first-hand accounts from the clients they do business with. This is especially true with ERP software. When vetting vendors, decision-makers should request a list of current organizations utilizing their platform. From there, it will help to contact these businesses directly to understand both their satisfaction level and pain points that come from working with a specific ERP platform provider. This will allows companies to have a general idea of the way the vendor addresses any issues associated with the maintenance of their software solution.

Implementing an ERP system is arguably a good business decision for companies. The benefits of having a system of this kind will improve both profitability and operational efficiency in a number of areas. Still, a fair amount of vetting must be done and companies must fully understand all of their options before moving forward with an implementation.

It’s important to go fully go through the due diligence process and ask as many questions as possible. Without doing so, it can be difficult to choose the correct software solution and the cost associating with an install could be more sizeable than expected.