An interesting question:

“How much does Sage Enterprise Management cost (or any other ERP solution of this calibre)?”.

In this article, we will give an overview of the various factors that typically determine the cost of your Enterprise Resource Planning software rollout. We will also focus on Sage Enterprise Management to give you an idea of what pricing you can expect for a project of your size.

 

 Sage Enterprise Management cost: What does it depend on?

Implementations of Sage Enterprise Management vary greatly depending on a number of factors. We have previously written extensively about the factors contributing to ERP budgeting, here is an overview with a focus on Sage Enterprise Management.

 

Functional requirements

A company requiring a basic finance only implementation of Sage Enterprise Management will have very different budgetary requirements to a business needing to implement the full ERP solution (functional footprint) available in Sage Enterprise Management, including:

  • Finance;
  • Logistics;
  • Distribution;
  • Purchase planning;
  • Manufacturing.

 

Geographical footprint

Implementing ERP in one geographical location is simple and requires a relatively small investment. One of the major benefits of Sage Enterprise Management (Sage X3) is that the fact that you can operate multiple entities (local and overseas) from a single database folder. This provides great functionality for inter-company and consolidation reporting. However, let’s not forget that when it comes to budget and cost to implement ERP each additional company that is implemented will require additional budget. These budgetary requirements will be stretched even further if we add into the equation multi-national requirements. As we add additional counties, we also add complexity – legal and fiscal requirements, local training and support and comprehensive foreign currency reporting requirements.

 

Available internal resources

The experience and availability of your internal staff is key to defining the cost of your Sage Enterprise Management implementation. The availability and previous ERP implementation experience of your internal team will also have a marked effect on implementation pricing. Most Sage Enterprise Management customers are larger SME or mid-market companies. These companies fall into two distinct categories

  • Small to medium-sized companies who do not have the resources available to implement an ERP solution without outsourcing most of the resource requirements. These resource requirements can be outsourced to a Sage implementation partner. As more responsibility rests with the implementation partner, the price to implement goes up.
  • Larger companies usually have more “internal muscle” to implement ERP and therefore are less reliant on the implementation partner for implementation resource. This clearly reduces the investment to implement.

 

Total number of Sage Enterprise Management users

The number of users that will be logged into your Sage Enterprise Management solution at any point in time only has a marginal influence on implementation pricing unless – those users are based in different geographical locations. The system requires the same amount of configuration for 10 users or 100 users. Influencing factors include:

  • Geography. Implementing across multiple geographical locations and countries increase the cost to implement;
  • Training requirements can have an influence on implementation pricing, depending on whether or not you use a “train the trainer” approach.

 

Project management

When implementing Sage Enterprise Management companies must allocate between 10% and 20% of their budget to Project Management. Different Sage partners will include different elements in project management. Essentially, Project Management should cover project planning, project meetings, project coordination, resource scheduling and scope management. There should be Project Management resource allocation from the Sage reseller and the customer. The stronger the Project Management resource provided by the customer, the lower the Project Management resource requirements (and budget).

 

Implementation methodology

There are multiple different implementation methodologies available for Sage Enterprise Management. An agile methodology which allows for a “fits like a glove”, do and charge implementation will normally cost more than a “waterfall” based (fixed scope / fixed price) implementation methodology. Let’s quickly explain the differences.

  • A waterfall methodology assumes an upfront, comprehensive scope of works. This scope of works is put together by your Sage reseller and your internal implementation team/resources. This scope of works is used to put together an implementation plan and budget. This “waterfall” methodology requires more upfront planning and structure and usually offers less flexibility during implementation. The advantage is usually a lower investment to implement.
  • An agile methodology relies on a “design and build as you go” solution. You often get a more complete functional fit, but you pay more in dollar value and time for the solution.

 

The “big three” factors

Data, reporting and customization. These three factors have a massive influence on Sage Enterprise Management implementation budget and timeframes. Manage each of these factors carefully to reduce risk.

 

Cloud vs On-premise

Does not have a huge effect on implementation pricing but there are pros and cons. Highly customized implementations of any ERP solution tend to require additional management in the cloud.

 

Sage Enterprise Management cost estimate

Assuming that we have looked at and summarized all of the factors that influence pricing for the implementation of Sage Enterprise Management – how do we get to Sage Enterprise Management cost estimate?

You would need to scope your high-level requirements. Let me give you a few guidelines and estimates.

We will assume that you are looking for an end to end solution, whereby the Sage business partner is providing the relevant skills and is not using a template implementation. Here is the tentative cost of implementing your solution.

  • Finance-only implementation. Assuming 10-20 Finance users, GL, banking, journals, fixed assets, financial reporting, accounts payable and accounts receivable. 60-80 days @ $90,000 – $120,000 implementation investment.
  • Logistics and distribution. 20-50 users – all financial modules plus purchase order planning, inventory / warehouse management and logistics 80-100 days @ $120,000 – $150,000 implementation investment.
  • Manufacturing. Finance, distribution and complete manufacturing – works orders, BOMs, routing, planning and scheduling – 150-200 days @ $225,000 – $300,000 implementation investment.

These “days” assumes consultancy days ie. the number of days that your Sage implementation partner will require to do the consultancy, training and system configuration. These days to implement does not include specific functional requirements like EDI, E-commerce or specific BI projects.

On-premise or cloud estimated for software and support have not been included in these Sage Enterprise Management cost figures as we have focused on the implementation estimates only.

 

Conclusion

In summary, multiple factors influence ERP implementation pricing.

For a Sage Enterprise Management cost estimate, you are looking at things like internal resource availability, requirements, cloud vs on-premise, data requirements and geolocation, to name a few.

At Leverage Technologies, we have been implementing Sage Enterprise management for some of the biggest sites in Australia. For more information or to get an estimate, feel free to give us a call on 1300 045 046 or email info@leveragetech.com.au.