ERP pricing

Vinnie is fond of asking why ERP vendors, and especially implementers, don’t lower their pricing. Take a recent post, SAP’s Egosystem (nice play on words), where he asked

Why is systems integration still so expensive after 35,000 SAP customers and countless upgrades?

Maybe SAP’s value is not based on price, but instead on customer intimacy or product excellence. Here I am referring to the three value disciplines advocated by Treacy and Wiersema, The Discipline of Market Leaders.

If a company wants to get ERP at a low price, they should be considering some of the open source offerings, or the low-end accounting/ERP packages. However, if a CEO wants an ERP system that he knows will work, and can work for his type of company, perhaps he should consider those vendors for whom price is not the driving value.

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One thought on “ERP pricing

  1. By that definition then we should also be prepared to still pay 10K for a 286 chip PC and $ 10 a minute for a call from S. Africa to US. Look, tech is all about productivity. There is little justification for software and services to not show productivity improvement year on year as we have seen from hardware, telecomms etc.

    SAP can be premium priced, but in no industry does a vendor which strives for 20-25% market share charge 30X the low end price. If they do they are a 1-2% player like a high end hotel or exclusive retailer…

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