However, before you decide how many users you need, it is crucial to understand how they are counted. First, you need to determine whether these users are concurrent or named. While pricing by concurrent users was once the norm, today, named users are the more likely method. If you are replacing an aging ERP solution, it is not only essential to understand what is being offered but also what you have today. If, for example, you have a concurrent user license, but your new solution only offers named users, your number of users might change dramatically.
Concurrent ERP Users
The number of concurrent users counts users that are logged into the application simultaneously. In the early days of ERP, this was often based on the honor system but was also subject to audit. Today’s solutions have this kind of policing mechanism built in. If you buy 50 concurrent users, it doesn’t matter who is using the software; when the 51st user tries to log in, he or she will be turned away. This can be an effective way of keeping the number of users in check when you have workers distributed around the world in very different time zones. The folks in North America will be sleeping when the workers in the Asia Pacific are logging in. You will have a smaller number of concurrent users than named users, but the price per user will generally be significantly higher.
Named ERP Users
If you buy 50 named users, you will identify each by separate login credentials. Theoretically, two different people cannot share a single named user, but this isn’t always the case. The “named” user might be a group of people (like material handlers or assembly workers). But two people with the same “name” can’t be logged in at the same time, even if only ten other named users are active. If the group also shares a single point of entry (perhaps a kiosk or terminal on the shop floor or warehouse), this works well. If someone else is using the login (i.e., he or she is physically standing at the terminal), the next person waits in line. If the sharing is more virtual, it is much harder to manage, and the integrity of your user count may come into question. Is this a legitimate “group,” or are you trying to cheat the system with fewer users?
Full Users or Limited Users
A concurrent or named user generally has access to a full range of functions. However, some of your users may be limited in what they can do. They might have access to selected inquiry-only functions but cannot enter transactions. Or perhaps they are limited to a select few types of transactions like moving inventory or recording hours worked and parts completed on the shop floor. They may often be restricted to “self-service” functions like requesting paid time off, filing expense reports, or inquiring about other benefits.
For access to these types of (limited) functions, you might purchase a specific number of “casual” or “limited” users. Alternatively, this component of the price might be based on your total number of employees. This is a standard methodology in pricing Human Capital Management (HCM) solutions, mainly because of the need for these “self-service” functions. While ERP is very seldom priced based on your total number of employees, if HCM is bundled with ERP, this solution segment might be priced this way.
Expect to pay far less per user for this type of access.