Should I buy or rent my ERP?
Enterprise resource planning software is more essential than ever before, and if you want to gain an edge over your competitors, you must ensure that you are making the most out of your systems. For small to medium sized businesses, Midsize Enterprise Resource Planning (ERP) software is a worthy upgrade from less encompassing programs like QuickBooks. However, using ERP software involves a number of decisions, such as determining whether renting on a monthly basis or if purchasing is best for your business. Here are a few tips for choosing whether to rent or buy your ERP software.
Which is Cheaper?
Ultimately, one option will be more cost effective for your particular business in the long run, and saving money on software gives you the flexibility to spend elsewhere. If you know which package you want to purchase and want to commit for the long term, it may be best to buy it outright. When you buy, you own your system and your data. Typically you get a return for your investment within 5 years. When you pay a monthly fee for a SaaS based solution, your data is hosted in the cloud environment and you pay a recurring monthly fee. The convenience of a rented solution is not dealing with, worrying about, purchasing or maintaining infrastructure. To answer which path is cheaper, compare cost over 5 years. In most cases, purchased solutions end up being the less expensive alternative.
Is Flexibility Important?
By renting your ERP software, there are limits to customizations. For those new to ERP, having the ability report on data from within the system is crucial. Having the ability to add custom reporting fields is a benefit of a purchased solution. Work with an experienced provider who can assess your needs and determine which system works best for your organization.
Are there options?
The software economy is moving toward a model where applications tend to be rented or cloud based. However, a one time capital expenditure may be more suited for companies that prefer not to commit to a monthly fee. If you are interested in taking advantage of a cloud solution, purchased solutions can be placed in a hosted environment and you won’t have to worry about infrastructure expenses.
The Right Size For You
ERP software is valuable for businesses of all sizes, as it allows owners and managers to focus on what they do best instead of dealing with financial nuances and logistics. However, it is important to choose the right package for you and decide whether it is best to make a one-time purchase and maintain a program, or rent it and pay ongoing costs.