ERP Pricing in 2026: Cost Breakdown & Pricing Models

How Is ERP Pricing Calculated?

It is important to understand the fundamentals before getting into the details of how much ERP costs. To begin with, there is no single fixed price for an ERP system. Instead, the total investment is best understood through the Total Cost of Ownership (TCO).

ERP total cost = software costs + implementation costs + infrastructure costs + ongoing costs

Here’s what each component includes:

Software Costs

This refers to the price of the ERP software itself. It may involve a one-time perpetual license fee or a recurring subscription fee charged per user, typically on a monthly basis.

Implementation Costs

ERP implementation costs include installing the software, configuring it to suit business requirements and integrating it with existing systems and applications.

Infrastructure Costs

ERP software runs on a database and supporting infrastructure, which adds to the overall expense. In on-premise deployments, this includes servers, databases and networking equipment. For cloud-based deployments, cloud ERP pricing in India varies based on scale and functionality. Entry-level plans for small and mid-sized businesses may start at approximately ₹20,000 per year or around ₹1,900 per user per month, while costs can rise significantly for large and complex enterprise environments.

Ongoing Costs

ERP is not a one-time purchase. Ongoing expenses include ERP maintenance cost, periodic upgrades, system support and employee training to ensure continued efficiency and adoption.

What Is the Cost of an ERP System in 2026?

The average ERP cost breakdown per user in India typically ranges between ₹2,000 and ₹10,000 per month for cloud-based and mid-range solutions. Costs may increase further for advanced enterprise-grade systems with complex requirements. An ERP implementation cost breakdown for SMBs generally falls between ₹60,000 and ₹20 lakh, while large enterprises may incur implementation costs ranging from ₹25 lakh to ₹1 crore, depending on scope, customisation and integrations.

It is estimated that the ERP market size in India is expected to reach between ₹2.7 billion and ₹5 billion by 2030, with ERP applications accounting for approximately 13 per cent of overall software market expenditure. However, the actual ERP investment and returns vary significantly based on industry, scale and specific business needs.

7 Factors Influencing ERP Pricing Structure

Here are seven key factors that influence the ERP pricing structure for any enterprise:

1. One-Time Licensing or Subscription

Enterprises can choose between a perpetual licensing model and a cloud-based subscription model. Under the licensing model, enterprises pay a one-time fee to purchase and use the ERP solution, along with ongoing maintenance charges. The subscription model is often more accessible upfront, but it requires recurring payments to continue using the system over time.

2. Number of ERP Users

ERP pricing is influenced by the number of users who need access to the system for daily operations. Costs may also vary based on user roles, such as administrative users with advanced privileges versus standard users with limited access.

3. Scope of ERP Implementation

The complexity of existing systems plays a significant role in ERP implementation costs. Additional expenses may arise if data conversion, migration or extensive system configuration is required. Enterprises may also incur higher costs if the ERP solution needs customisation to align with specific business processes.

4. Third-Party Integration

Many organisations integrate ERP systems with third-party applications such as CRM platforms and business intelligence tools. Without such integrations, data flow across systems can be limited, impacting operational efficiency and decision-making.

The complexity and number of integrations required can significantly increase overall ERP costs.

5. Number of ERP Modules

ERP pricing is affected by the number of modules an organisation selects. As more modules are added, both licensing and implementation costs increase. Some ERP vendors also charge additional fees for industry-specific modules, such as customer relationship management or advanced supply chain functionality.

6. Customer Support and Training Costs

Beyond software and implementation expenses, ERP pricing depends on the level of customer support and training provided by the vendor. Some vendors include basic support and training with their pricing, while others charge separately based on the number of users, support level or operational complexity.

7. ERP Maintenance Costs

ERP solutions involve ongoing maintenance costs, including system updates, bug fixes and technical support. These recurring expenses contribute to the long-term total cost of ownership.

In some cases, larger enterprises build in-house ERP support teams, which introduces additional costs related to hiring, training and retaining skilled personnel.

Hidden and Indirect ERP Costs

The vendor quote is not the final figure when calculating the total cost of an ERP system. Initial proposals often exclude several indirect or hidden expenses that significantly affect overall ERP implementation costs.

Data Migration

Data Migration is one of the most commonly overlooked cost areas. Most businesses store data across multiple, unstructured systems. Before migration, this data must be cleaned, validated and accurately mapped to the new ERP. If handled poorly, data migration can increase ERP implementation costs and delay go-live timelines. It often requires dedicated effort, specialised tools and skilled resources, making it important to budget for it as a standalone mini-project.

Integrations

As the central system, ERP must integrate with other business applications such as e-commerce platforms, payroll systems, banking software and logistics providers. Building and maintaining these integrations through APIs adds to ERP maintenance cost through development time, testing and, in some cases, third-party connector fees.

Hardware Upgrades

For organisations choosing on-premise ERP, hardware upgrades may be required. This can include server upgrades, store expansion or a complete infrastructure refresh. These costs should be factored into the overall ERP cost breakdown. Looking ahead, ERP rates 2026 in India are expected to vary based on business size, deployment model, software choice and implementation complexity, whether cloud-based or on-premise.

Change Management

Change management costs are rarely included in vendor quotes, yet they are critical to ERP success. This includes training employees, redesigning workflows and supporting user adoption. Without adequate investment in change management, even a well-implemented ERP system may fail to deliver value, as users may struggle to adopt and use the platform effectively.

Next, let’s explore popular ERP pricing models and how they impact overall costs.

6 Types of ERP Pricing Models

Below are six common ERP pricing models, along with their advantages and limitations.

1. Licensing Model

In this model, enterprises make a single upfront payment to purchase the ERP software.

Pros: A one-time payment can reduce long-term ERP implementation costs.

Cons: High upfront investment can make this model unsuitable for budget-conscious or smaller companies.

2. Subscription Model

The cloud-based subscription model involves recurring monthly or annual payments.

Pros: Lower initial costs make this model accessible for enterprises of different sizes and support predictable cloud ERP pricing.

Cons: Depending on the vendor, long-term subscription fees and implementation charges may increase over time.

3. Usage-Based Model

Under this model, pricing is linked to actual usage, such as features consumed or transaction values.

Pros: Cost aligns closely with usage, making it suitable for organisations with fluctuating operational needs.

Cons: Variable usage can make budgeting difficult and may lead to unexpected cost escalation over time.

4. Tier-Based Model

This model offers predefined pricing tiers based on business size, user count or feature sets.

Pros: Enterprises can select a plan that matches current requirements while keeping initial costs manageable.

Cons: Fast-growing companies may face higher costs when upgrading to advanced tiers.

5. Module-Based Pricing Model

In this approach, enterprises pay only for the ERP modules they require.

Pros: Cost-effective since enterprises avoid paying for unnecessary functionality.

Cons: Adding new modules later can increase ERP implementation costs and affect long-term budgets.

6. Hybrid Model

The hybrid model combines on-premise licensing with cloud-based subscription components.

Pros: Provides flexibility by allowing enterprises to balance control and scalability.

Cons: Managing both deployment models can be costly and complex, especially for smaller companies.

Conclusion

Understanding ERP pricing models is critical for enterprises planning a long-term ERP investment. A clear view of licensing structures, ERP implementation costs and ongoing ERP maintenance cost helps businesses avoid budget overruns and make informed decisions.

An experienced ERP implementation company like Praxis Info Solutions can guide organisations through ERP cost breakdowns and pricing models to identity the best-fit solution.

With deep ERP expertise, Praxis ensures transparency in pricing and supports businesses throughout the ERP journey. If you would like to learn more, contact us today.