The ERP Operational Costs Calculator is a specialized tool designed to assist organizations in estimating their ongoing operational expenses related to ERP systems. These costs can be broken down into four main components:
Ongoing Operational Costs = Maintenance and Support Fees + Hosting/Cloud Fees + Staffing Costs + Software Updates and Upgrades
Let’s delve deeper into each of these components:
- Maintenance and Support Fees: This includes the expenses associated with maintaining and supporting the ERP system. It covers routine maintenance, technical support, and any licensing fees.
- Hosting/Cloud Fees: In the modern era, many organizations opt for cloud-based ERP solutions. This part of the calculator considers the hosting or cloud service charges.
- Staffing Costs: ERP systems often require dedicated personnel for management and support. This component accounts for the salaries and benefits of staff involved in ERP-related tasks.
- Software Updates and Upgrades: ERP software is not static; it requires regular updates and occasional upgrades. This element calculates the expenses for keeping the software current.
Calculator: General Terms for Easy Reference
| Term | Description |
|---|---|
| Maintenance and Support | Regular system maintenance and support fees |
| Hosting/Cloud Fees | Charges for ERP system hosting or cloud service |
| Staffing Costs | Salaries and benefits for ERP personnel |
| Software Updates | Regular software updates and patches |
| Upgrades | Major software upgrades and enhancements |
Example of ERP Operational Costs Calculator
Let’s consider an example to illustrate how the ERP Operational Costs Calculator works. Suppose a mid-sized manufacturing company uses an ERP system. Here are the relevant details:
- Maintenance and Support Fees: $10,000 per year
- Hosting/Cloud Fees: $5,000 per year
- Staffing Costs: $50,000 per year
- Software Updates and Upgrades: $7,500 per year
Using the formula mentioned earlier, we can calculate the ongoing operational costs:
Ongoing Operational Costs = $10,000 + $5,000 + $50,000 + $7,500 = $72,500 per year
By using this calculator, organizations can quickly assess and plan for their ERP operational costs, making informed financial decisions.
Most Common FAQs
Yes, the calculator can be used for various ERP systems, regardless of the vendor or industry.
It’s advisable to update the calculator with your current expenses annually, as costs may vary over time.
Certainly, the calculator is suitable for both on-premises and cloud-based ERP systems.