Are you planning to buy an ERP system?
SAP Business One is a popular solution and used by many small and medium-sized companies. However…
The cost of it can feel overwhelming. The various pricing models, deployment methods, and other implementation expenses tend to leave business owners scratching their heads.
Knowledge of SAP Business One pricing before you make a final decision is a smart move. It allows you to accurately budget and eliminate costly surprises in the future.
In this article, we will break down how SAP Business One pricing works and what factors contribute to the total cost.
Table of Contents
- What Affects SAP Business One Pricing?
- The Two Main Licensing Models Explained
- Cloud vs On-Premise Costs Breakdown
- Hidden Costs That Catch People Off Guard
- How To Get The Best Value For Your Investment
What Affects SAP Business One Pricing?
SAP Business One pricing is not fixed. There are many different factors that contribute to how much a business will pay.
The number of users is the most obvious. Deployment model, customisation requirements, and the level of implementation assistance needed also play a role.
The region of operation can also determine price fluctuations. For example, you can read more about sap business one price singapore. Businesses in different countries or regions have different local pricing.
SAP Business One pricing is flexible. It can easily scale up or down based on the needs of your business.
Does it sound easy?
The Two Main Licensing Models Explained
There are two primary SAP Business One licensing models. The differences between the two include costs and benefits.
- Perpetual Licensing
- Subscription Licensing
Perpetual Licensing
Perpetual licensing follows the traditional upfront purchase model. The cost ranges from $1,350 to $3,500 per user on average. There is an annual maintenance fee of 18-20% on the license.
This covers software updates, bug fixes, and technical support.
Perpetual licensing is best for businesses that want to own the software and can afford a large upfront investment. It is also a good choice for those who plan to use it for a long time.
Subscription Licensing
The subscription licensing model follows a pay-as-you-go approach. On average, it costs from $110 to $219 per user per month depending on the license type.
Hosting, upgrades, and support are included. No large up-front payments are required.
Subscription licensing helps to more easily manage cash flow. Predictable costs month to month mean no surprises.
Cloud vs On-Premise Costs Breakdown
Cloud and on-premise have significant differences in terms of deployment cost.
Cloud Deployment
Cloud-based SAP Business One removes the need for on-site servers and IT infrastructure. Hosting, security, backups, and maintenance are managed by the vendor.
Monthly subscription fees cover all of these costs. This makes cloud the more budget-friendly deployment method upfront.
Research shows 70% of ERP deployments will be cloud-based by 2025. This number is only increasing.
This is due to lower initial costs and faster implementation compared to on-premise.
On-Premise Deployment
On-premise deployment is more expensive at the start. It requires purchasing servers and hardware, setting up the internal IT infrastructure, and managing everything in-house.
For businesses with the necessary resources, this is a viable option. Certain industries that must meet stringent compliance requirements often need this.
The decision between cloud and on-premise should be made on a case-by-case basis. Businesses should factor in their budget and IT capabilities.
Hidden Costs That Catch People Off Guard
SAP Business One pricing is not as simple as it first appears…
There are several hidden costs that can quickly increase the total cost of ownership.
- Implementation Costs
- Training Expenses
- Customisation and Add-Ons
- Ongoing Support
Implementation Costs
Implementation services usually are the largest line item. Simple implementations can cost around $8,000. Complex industry-specific implementations cost $50,000 or more.
Costs are for system configuration, process mapping, data migration, and the initial setup of the software. The more customised and complex business processes are, the higher the implementation costs.
Training Expenses
Training the staff to use SAP Business One is another major cost. Training can cost from $1,000 to $5,000 on average depending on the required depth.
Departmental or advanced training will increase the total cost. However, neglecting training will lead to poor adoption and loss of investment.
Customisation and Add-Ons
Customisation work is needed in most cases. This can include anything from custom reports to workflow modifications and industry-specific features.
Add-on modules cost on average from $1,000 to $10,000 each. Third-party integrations that connect SAP Business One to other tools like CRM or eCommerce solutions cost between $3,000 and $15,000 per integration.
Ongoing Support
Post-go-live support costs $3,000 to $15,000 per year. This includes things like system maintenance, troubleshooting, and guaranteed response times.
Professional vs Limited User Licenses
One of the ways to optimise SAP Business One pricing is to understand the difference between these two licensing types.
- Professional User License
- Limited User License
Professional User License
Professional licenses provide access to all SAP Business One features. This is the most expensive license type.
Professional licenses are for power users who manage the business’s financials, sales, inventory, and reporting.
Limited User License
Limited user licenses only provide access to certain functional areas in SAP Business One. These are good for users who only need to access certain parts of the software like CRM, logistics, or just accounting.
Costs are significantly lower than a professional license. Most companies use a combination of both license types.
For example, professionals such as managers may require professional licenses, while the sales team can do their jobs with limited access.
How To Get The Best Value For Your Investment
Planning is the best way to ensure you get the best value from your SAP Business One pricing investment.
First, carefully consider the number of users and their required level of functionality. Overbuying licenses is a waste of money.
Work with a certified SAP partner who specialises in your industry. This can help them recommend the proper configuration and eliminate unnecessary costs.
If the business has less than five users, a great way to start is with the Starter Package. This is an affordable entry point to the solution that can be upgraded to a larger package later.
Studies indicate 64% of small businesses currently use ERP software. These with well thought through plans receive the best returns and smoother implementations.
Comparing cloud and on-premise versions are important. The initial and long-term costs like maintenance, hardware, and IT staffing are a factor to consider.
Pulling It All Together
SAP Business One pricing factors work together to form the overall cost. The licensing model, deployment method, number of users, and customisation requirements are factors.
- Perpetual licenses have a higher upfront investment with lower long-term costs
- Subscription licenses spread out costs on a monthly basis with predictable payments
- Cloud deployment lowers infrastructure costs and implementation time
- Hidden costs like implementation services, training, and integrations can add up quickly
- License mix of professional and limited users helps to control spending
Understanding the true total cost of ownership is the key to successful SAP Business One pricing. Taking a long-term view reveals the actual investment needed.
Businesses who take the time to consider all factors make better decisions. They budget accurately and do not experience the surprises that cause ERP projects to fail.
Armed with this knowledge, it is time to start planning. The right SAP Business One configuration awaits.
