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If you don’t plan and track your ERP software budget properly, you're setting yourself up for failure.
When we developed our strategy pack for ERP software users, we saw a lot of businesses struggling with finances and planning.
They were disorganized, had no grasp of cash flow, and were drowning in financial troubles despite having substantial revenue.
Don’t let this be you—stand out and succeed.
We’ve created a small, free tool to help you get started: our Budget Tracker and Planner. Let’s turn your ERP software finances around and set you on the path to success!
Get the budget tracker tailored for ERP software
Most ERP software developers don't know how to plan and track their budget. This spreadsheet will help you.
Example of a full budget for ERP software
Here is an example of a (very) detailed budget for an ERP software implementation, to give you some inspiration
1. Software and Infrastructure
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| ERP Software License | Annual license for ERP software | $2,000 | $24,000 |
| Cloud Hosting | Cloud infrastructure for ERP system | $1,500 | $18,000 |
| Data Storage | Storage for ERP data | $500 | $6,000 |
| Internet & Network | High-speed internet and network maintenance | $300 | $3,600 |
| Security Services | Cybersecurity and data protection | $400 | $4,800 |
2. Salaries & Wages
| Position | Number of Employees | Monthly Cost per Employee | Total Monthly Cost | Annual Cost |
|---|---|---|---|---|
| Project Manager | 1 | $6,000 | $6,000 | $72,000 |
| ERP Consultant | 2 | $5,000 | $10,000 | $120,000 |
| Developers | 3 | $4,000 | $12,000 | $144,000 |
| System Administrator | 1 | $4,500 | $4,500 | $54,000 |
| Support Staff | 2 | $3,000 | $6,000 | $72,000 |
3. Training & Development
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Training Programs | ERP training for staff | $1,000 | $12,000 |
| Workshops & Seminars | External workshops and seminars | $500 | $6,000 |
| Online Courses | Subscription to online learning platforms | $300 | $3,600 |
4. Marketing & Advertising
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Online Advertising | Google Ads, LinkedIn Ads, etc. | $500 | $6,000 |
| Content Marketing | Blog posts, whitepapers, etc. | $400 | $4,800 |
| Social Media Management | Managing social media accounts | $300 | $3,600 |
| Email Campaigns | Email marketing and newsletters | $200 | $2,400 |
| Webinars | Hosting and promoting webinars | $300 | $3,600 |
5. Miscellaneous Expenses
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Software Maintenance | Regular updates and maintenance | $500 | $6,000 |
| Office Supplies | Stationery, printer ink, etc. | $100 | $1,200 |
| Licenses & Permits | Software licenses and compliance | $200 | $2,400 |
| Contingency Fund | Emergency repairs and unexpected costs | $500 | $6,000 |
| Client Support | Customer support services | $300 | $3,600 |
Some ERP software make 5x more profit than you!
We have studied the strategies of the best ERP software in the world. Replicate them now!
What are the biggest expenses for an ERP software?
Be mindful of these critical factors. Here are five major costs every ERP software provider needs to consider, along with some tips on how to manage them effectively.
- Development and Maintenance CostsThese can consume a significant portion of your budget. You're dealing with complex systems, and costs can fluctuate based on technology updates, bug fixes, and feature enhancements. To keep these costs in check, focus on efficient coding practices, negotiate better rates with third-party vendors, and minimize downtime. Finally, it's easy to overspend by adding unnecessary features or opting for high-end technologies that don’t add enough value.
- Employee Salaries and TrainingYour team is your backbone, but paying for their salaries, benefits, and ongoing training can be expensive. This cost is always high because you need a skilled workforce to provide excellent service and keep the software running smoothly. You can optimize labor costs by scheduling efficiently, cross-training employees, and monitoring productivity. However, be careful not to underpay or overwork your staff, as this can lead to high turnover and poor service quality.
- Infrastructure and Hosting CostsPrime server locations come with high costs, but they can ensure better performance and reliability. Utilities like electricity, cooling, and internet connectivity are essential but add up quickly. To optimize these costs, negotiate favorable terms with data centers and invest in energy-efficient hardware. Overspending often happens when you choose infrastructure that's too large or too advanced for your needs.
- Marketing and SalesYou need to get the word out about your ERP software, but advertising can be pricey, whether it's online ads, social media campaigns, or traditional media. Optimize this expense by focusing on cost-effective methods like the ones we provide in our guide. Overspending can happen if you invest in flashy campaigns without a clear return on investment.
- Software Licensing and ComplianceThis includes everything from software licenses to compliance with industry standards. These are expensive because quality software and regular compliance checks are crucial for smooth operations and customer trust. Optimize by investing in durable, scalable software solutions and maintaining regular compliance audits to avoid costly penalties. You can overspend by going for the latest high-tech solutions you don’t really need.
How to spend less with your ERP software?
Here are practical tips to help you, as a business owner, optimize your budget and manage expenses more effectively with ERP software.
| Expense | Tips to Optimize |
|---|---|
| Software Licensing | Choose a scalable ERP solution that allows you to add or remove modules as needed, avoiding unnecessary costs. |
| Implementation Costs | Work with experienced consultants to ensure a smooth implementation process and avoid costly delays. |
| Training | Utilize online training resources and webinars to educate your team on the new ERP system without incurring travel expenses. |
| Maintenance | Schedule regular system updates and maintenance checks to prevent unexpected downtime and costly repairs. |
| Customization | Opt for an ERP system that offers customizable features to fit your specific business needs, reducing the need for expensive custom development. |
| Data Storage | Consider cloud-based ERP solutions to reduce the costs associated with physical data storage and maintenance. |
| Integration | Ensure your ERP system integrates seamlessly with existing software to avoid additional costs and improve efficiency. |
| Support | Choose an ERP provider that offers comprehensive support packages to address issues quickly and minimize downtime. |
| Security | Invest in robust security measures to protect your data and avoid the high costs associated with data breaches. |
| Reporting | Utilize the reporting features of your ERP system to gain insights into your business operations and identify areas for cost savings. |
| Inventory Management | Use the inventory management module to track stock levels accurately and reduce excess inventory costs. |
| Financial Management | Leverage the financial management tools within your ERP system to streamline accounting processes and reduce errors. |
| Human Resources | Implement the HR module to manage employee records, payroll, and benefits more efficiently. |
| Customer Relationship Management (CRM) | Use the CRM module to improve customer service and retention, leading to increased sales and reduced marketing costs. |
| Supply Chain Management | Optimize your supply chain processes with the ERP system to reduce lead times and lower procurement costs. |
| Project Management | Utilize the project management tools to keep projects on track and within budget. |
| Compliance | Ensure your ERP system helps you stay compliant with industry regulations to avoid fines and penalties. |
| Communication | Use the communication tools within your ERP system to improve collaboration and reduce the need for external communication platforms. |
| Document Management | Implement the document management features to go paperless and reduce the costs associated with physical document storage. |
| Vendor Management | Use the vendor management tools to negotiate better terms and reduce procurement costs. |
| Asset Management | Track and manage your assets effectively to extend their lifespan and reduce replacement costs. |
Copy the tactics of the best ERP software in the world!
There are ERP software that make way more money than you do. We have studied their tactics. Get them now!
Expenses that are just useless for an ERP software
Yes, some expenses for your ERP software are just unnecessary. They don't contribute to improving efficiency or enhancing user experience.
| ERP Software Expense | Reason It's Useless |
|---|---|
| Overly Complex Modules | Modules with excessive features that your business doesn't need can complicate workflows and increase costs. |
| Premium Support Packages | Unless you have a large, complex system, mid-tier support options are often sufficient. |
| Excessive Customization | Highly customized solutions can be expensive and difficult to maintain. |
| High-End Hardware | Top-of-the-line servers and hardware are not always necessary and can be cost-prohibitive. |
| Traditional Marketing | Paper-based marketing for software solutions often has a lower return on investment. Don’t include them in your marketing strategy. |
| Multiple User Interfaces | Having various user interfaces increases development and maintenance costs without adding significant value. |
| Overstaffing IT Team | Overstaffing your IT team leads to higher labor costs without necessarily improving service quality. |
| Premium Data Storage | Expensive data storage solutions are often unnecessary for most businesses. |
| Exclusive Software Integrations | Using rare or exclusive integrations can inflate costs and complicate system management. |
| Costly User Training | High-end training programs are not always appreciated by users and can be a significant expense. |
| Custom Printed Manuals | Personalized manuals are a minor detail that most users overlook, and they can be expensive. |
| Unnecessary Add-Ons | Paying for add-ons with features you don’t use is a waste of resources. |
| Premium Software Licenses | Most users are content with standard licenses, making expensive premium licenses unnecessary. |
| Extra Backup Systems | Maintaining more backup systems than needed increases operational costs. |
| Excessive Membership Fees | Paying for multiple industry memberships often yields little benefit. |
| Overly Frequent Updates | Constantly updating software can be costly and disrupt operations. |
| Expensive User Interfaces | Elaborate user interfaces are often ignored by users and add to the cost. |
| High-End User Devices | Luxury user devices are prone to damage and expensive to replace, often going unnoticed by users. |
| Excessive Team Meetings | Too many meetings can reduce productivity and increase labor costs. |
| Expensive UI Designs | Frequently redesigning user interfaces is costly and often unnecessary. |
| Unused Promotional Materials | Ordering more promotional items than needed leads to waste and unnecessary expense. Get our marketing budget planner template. |
| Paid Directory Listings | Many free listing options are available, making paid listings often redundant. |
| High-End Development Tools | Specialized development tools are often unnecessary and add to costs without a proportional benefit. |
Stop working with a tight budget for your ERP software!
Managing a budget for your business when funds are tight can feel like a nightmare. It's like being trapped in a cycle where any unexpected expense can throw your entire operation off balance.
This constant pressure makes it nearly impossible to invest in growth projects, leaving you always chasing after expenses. It's a life filled with stress and sleepless nights.
Yes, you can continue down this path, scraping together resources and barely making ends meet. But there's another part of the equation you might be overlooking. Instead of just trying to cut costs, you can focus on optimizing your operations and growing your revenue. More income means more breathing room and more money to invest in your business.
And no, you don't necessarily have to spend a fortune to grow. There are plenty of zero-cost initiatives and strategies that can help you increase your revenue by 10%, 20%, or more. We've detailed all of these strategies in our guides, after studying dozens of businesses just like yours. Get them now!
Make your ERP software more profitable
We have studied the strategies of the best ERP software in the world. All their tactics are explained in our pack!
