Most successful companies start their business with an entry level accounting solution and then face the daunting task of graduating to a more robust solution that’s more specific to their business requirements. While this is a great problem to have, it can be overwhelming to understand what to ask in order to understand the true costs of making that change.
Here we outline the cost considerations for implementing Microsoft Dynamics GP, but these buckets of cost are applicable for any accounting/ ERP software solution. Hopefully the breakdown we’ve provided will give you the means to ask the right questions and get specific, realistic answers.
First, you’ll need to consider how you will deploy your software:
On Premise vs. Cloud? The main difference, as it relates to cost, between these two options, is that On Premise software is paid for upfront and is typically a capital expense, while cloud software solutions are paid for on a per user/per month basis, and is an operating expense.
Every business has different needs. Some organizations only have capital money to spend, which typically drives them toward an On Premise solution. More recently, companies have had larger savings of operating expense funds, which is one reason why the cloud is becoming so popular.
Next, you’ll need to consider three main costs:
#1 Software Costs
A. Number of User Licenses
This has the biggest impact on your software costs, whether you purchase it up front (on premise), or you pay on a per user/per month basis (cloud).
- Dynamics GP Starter Pack comes with 3 Users and List Price is $5,000
- Each additional Full User is $3,000
- There are two other User License options with limited capabilities: Limited User for $600 and Self-Service User for $60
B. Advanced Functionality
If your business requires additional functionality for Manufacturing ($10,000), Extended HR/Payroll ($7,000), or needs to do additional development or configurations to the software ($6,000), these additional modules are available as a one-time charge (on premise), or as an increased per user, per month fee.
C. Third Party Products
While there is a breadth of functionality that comes with GP, out of the box, there are hundreds of Independent Software Vendors (ISVs) that write software for specific industries or functionalities. Often, Microsoft Dynamics GP users, will have one or more third party products to enhance their solution. The cost of these solutions vary because they range from simple utilities, on average $500 per user, to very robust industry specific user licenses, which can average $5,000 per user.
D. Annual Maintenance
You can expect to pay 20% of your software list price on an annual basis. This annual maintenance charge covers software upgrades, service packs, tax updates, and access to online help, communities, and learning resources.
#2 Service Costs
A. Rapid Implementation vs. Standard
Every Microsoft Dynamics GP partner has a different methodology, and the terms may vary, but generally you can expect that a Rapid Implementation will cost you less because your partner will do a significant amount of discovery up front, and then set the system up based on that what they’ve learned. With a Standard implementation, you can expect your partner to teach you the functionality of Dynamics GP, whereby you will decide which modules to use, and you will set the system up together as you go. A standard implementation is more thorough and, therefore, takes longer and costs more.
B. Train the Trainer vs. Train the Team
In every implementation, you will be expected to train at least one person from your team to be the “power user”. This person could be the “trainer” for the rest of your team. You could reduce training costs by training one (or more) power users, rather than training your entire team.
C. Data Conversion
This is where an implementation can get very expensive, and where you need to be sure you see the cost/benefit of converting your data. To keep costs down, stick to a typical data conversion, and don’t convert your transactional history. If you need to convert historical transactions, be realistic about the time it will take your team and your partner.
D. Integrations with Other Applications
If you’re using another software system, such as a POS system, or an in-house database, or need to create journal entries for your outsourced payroll, consider integrating these systems rather than entering the data twice. Often, integrating other applications, or importing data, is much simpler than you would expect and can save you time and money by not duplicating data entry.
Consider modifications to the software that will increase productivity, or provide your business with specific functionality that would save you time and money in the long run by customizing the software using standard tools that don’t prohibit you from getting support or easily upgrading in the future.
#3 Hardware: Server and Workstations, Operating Systems, and Network Bandwidth
With either an On Premise or Cloud implementation, you will need to consider your network/ internet connection speed and reliability.
For On Premise implementations, you will also need to consider your hardware specifications and your operating system versions. Each of these needs to meet the requirements for the software and often require further investment to upgrade.
While we can’t provide an estimate here, because every situation is different, you need to consider these costs as a necessary element to implementing Microsoft Dynamics GP.
In summary, Microsoft Dynamics GP will cost you $3,000 to $5,000 per user, multiplied by the number of users and third party products and annual maintenance combined for an On Premise solution. Or $230 to $530 per user, per month for a cloud hosted solution. And service will cost you 2 to 4 times the cost of your software for both On Premise and Cloud solutions.
What are you waiting for? Call us to find out how much your customized Microsoft Dynamics GP solution will cost you!
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By Tidestone Solutions