News
Commentary
12/4/2010
11:24 PM
Connect Directly
RSS
E-Mail
50%
50%

Can SMBs Really Afford ERP?

It's a question folks like Jeff Stiles get pretty often. Stiles is senior vice president of small and midsize enterprise marketing for SAP AG, so he comes across a lot of small and midsize businesses (SMBs) that feel they have outgrown their current, single-purpose bookkeeping application, or are tired of reading canned reports and trying to reconstruct some semblance of their day-to-day transactions and run rates using static spreadsheets. The burning question is: "Can we really afford an ERP s

It's a question folks like Jeff Stiles get pretty often. Stiles is senior vice president of small and midsize enterprise marketing for SAP AG, so he comes across a lot of small and midsize businesses (SMBs) that feel they have outgrown their current, single-purpose bookkeeping application, or are tired of reading canned reports and trying to reconstruct some semblance of their day-to-day transactions and run rates using static spreadsheets. The burning question is: "Can we really afford an ERP system?"Unfortunately, the idea that typical ERP deployment costs far outstrip the budget of a lowly SMB is rampant. In fact, it's often so ingrained that many small business managers never bother to ask it. Unfortunately, these managers may be unaware that costs have come down substantially for SMB-scale ERP deployments - so much so, it might be more appropriate for many SMBs to ask, "Can we really afford not to deploy an ERP system?"

"Customers can get started at very reasonable cost," Stiles said in answer to questions posed by audience members during a recent InformationWeek SMB webcast. "The cost is a combination of the per user charge for the software itself, as well as the cost of deployment, but customers can get started easily for under $10,000."

SAP itself has published marketing materials stating that pricing and deployment options start as low as $149 a month for SMBs, on a per-user basis. Companies considering a deployment should also take into account how quickly they are likely to recoup the costs, and the potential return on their investment.

SAP implementation experts cite an average deployment time of about 12 weeks for an SMB, but as we saw with InformationWeek On Location's Season One subject, the Torelli Bicycle Co., the initial deployment can be much faster.

"I think it's really turned out to be a great solution for small companies, but also for companies that are looking to grow and scale their business," Stiles said.

New licensing and delivery models are making ERP solutions much more affordable. Is your company still on the fence about whether it can afford ERP? Share your comments.

Comment  | 
Print  | 
More Insights
The Business of Going Digital
The Business of Going Digital
Digital business isn't about changing code; it's about changing what legacy sales, distribution, customer service, and product groups do in the new digital age. It's about bringing big data analytics, mobile, social, marketing automation, cloud computing, and the app economy together to launch new products and services. We're seeing new titles in this digital revolution, new responsibilities, new business models, and major shifts in technology spending.
Register for InformationWeek Newsletters
White Papers
Current Issue
InformationWeek Tech Digest September 18, 2014
Enterprise social network success starts and ends with integration. Here's how to finally make collaboration click.
Flash Poll
Video
Slideshows
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
The weekly wrap-up of the top stories from InformationWeek.com this week.
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.