Key cost considerations for manufacturing ERP

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I spend a considerable time providing software contract negotiating support for our clients. Let me share with you three key areas you should focus on in order of importance:

1. Make sure you don't buy software you don't need. Vendors often include more products than you need in the proposal. Toss the unnecessary packages out and ask them for another bid with the products you need

2. Negotiate the long term maintenance fees. Ranges are 18% to 25% for the net price of software. Imagine you paid 500k for software and maintenance is 20%. After 5 years, you'll have paid another 500k. In 10 years, that's 1M which is twice the cost of your original software.

3. Find out how much it costs to implement. Some software packages are 1.0X the cost of license, others require 2.5X and may even require a huge payroll over the next 5 to 7 years.