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 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.