Licensing Issues for ERP Products




Implementation of an ERP package makes you enter into a software license and support agreement with vendor. This involves complex legal documentation and maintenance fee and formula for escalation thereof. Before finalization of this contract, following issues should be given due consideration:

1.     If the licensing agreement covers only the core ERP products or contain additional business software like report writer, interfaces and middle ware.

2.     What are the user type definitions? User type may be a
a.     Power user with full access to development tools
b.     Informational user meant for management with access to dashboards, MIS and approving role of a workflow.
c.      Normal user with transactional roles and limited access.

3.     There are other user categorizations like named users, where a license is needed for each user of the system and concurrent users indicating maximum number of users with right to access the system simultaneously.

4.     It is, imperative that a proper assessment is made for types of licenses to be procured as license fee varies for type of users. Price should be negotiated before entering into the agreement when the vendors may be willing to offer significant discount over their list prices.

5.     It is also important to decide when to buy the licenses. Agreement may be made to procure only a few licenses at the commencement of project, for training, development and testing and rest during go live. It is also important to secure fees for additional licenses that may be procured during next couple of years.

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