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"How long is a piece of string?" was one supplier's answer to this question. Not a helpful reply, but an understandable one. The difficulty is that costs will vary depending on your business needs, the functionality you want and the level of support your require.
Whatever the reason for changing software don't just go for the cheapest option, advises Rick Holroyd of Holroyd Howe. He suggests looking for something that will grow with the business over a period of years without, of course, busting the budget. Smaller business of up to £1m will be able to buy an off-the-shelf package to install yourself with minimum help for a couple of hundred pounds or less. However, most growing businesses needs are much more complex. A service business that wants to monitor and charge out its employees' time, for example, will require something with a greater degree of sophistication; a manufacturing or distribution company, on the other hand, might require a programme that not only supplies financial information and integrates this with stock control but can also handle online orders from customers.
In short, the more complex your needs, the more expensive the package. When comes to budgeting for the package you need to look at more than the box price. The fees you need to consider are data migration fees for transferring your current information across to the new system, maintenance fees, which will normally be 2% of the software licence fees, support fees which are usually between 18-20% or the licence and upgrade fees which will depend on what you buy. Added to that is the cost of training and the costs of calling help lines to help with day-to-day glitches or difficulties,
In the case of contract caterer Holroyd Howe, a company with 550 full and part time employees and a turnover of £12.5m, its new system cost £48,000.
Further up the price scale computer memory product distributor Simms International, which turns over £8mand has 15 employees, has invested £150,000 on installation of a Microsoft Navision accounting system. It expects to spend the same amount again on further development.
As a guide, a smaller company requiring straightforward accounting and financial information might spend between £250 and £500 on an off the shelf package for a handful of users, plus around £200 or £300 annually for support.
Clearly the costs can mount up so it's well worth devoting some management time during both the purchase and implementation to ensure you get the right system within budget.
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