Hidden ERP costs: what the licence price leaves out

Why the licence is only part of the bill

A licence price tells you what the software costs per user or per month. It does not tell you what it costs to get live and keep running. The cost pages show, for each system, how much of the five-year total is licences and how much is everything else.

The figures below come from secondary sources (mainly ERP Research's pricing guides). They are industry ranges, not quotes, and they vary widely by project.

Data migration and cleansing

ERP Research puts data migration at 5–15% of the implementation budget and reports that cleansing messy legacy data often adds 20–40% to migration costs. The volume of history you bring across, and how many source systems you have, drive this more than the ERP you choose.

Training and change management

ERP Research estimates training at 5–10% of total project cost and $500–$2,000 per user for initial training. Our calculator counts end-user training time as internal hours (an editorial assumption you can change), and assumes the partner's training effort sits inside implementation.

Modules, add-ons and ISV apps

Base licences often leave out modules you may need. ERP Research notes that NetSuite modules such as WMS, manufacturing, ecommerce and advanced revenue recognition are priced separately, and that Dynamics 365 Finance & Operations ISV solutions typically cost $20–$80 per user per month. Sage Intacct advanced modules (fixed assets, project accounting, revenue recognition, consolidations) also add to the subscription, per CostBench.

Environments, storage and capacity

Cloud ERPs include a set amount of capacity. For Dynamics 365 F&O, ERP Research reports extra tier-3+ sandbox environments at $1,500–$5,000 per month each and storage overage charges. NetSuite subscriptions include service-tier limits for storage and transaction volume, beyond which an upgrade applies.

Renewal increases and productivity dips

ERP Research reports that most cloud vendors raise subscription fees by 3–8% a year at renewal, and that productivity typically drops 10–25% for 3–6 months around go-live. Neither is included in our calculator, which uses today's list prices for all five years.

Contingency

ERP Research states that 50–75% of ERP projects exceed their original budget and recommends a 25–30% contingency. Our results do not add contingency automatically; add it to the implementation line when budgeting.

FAQ

What is the biggest hidden ERP cost?

Usually implementation and the work around it (data migration, testing, training). Secondary sources put implementation at 1–3 times the annual licence for mid-market systems.

Does the calculator include contingency?

No. Secondary sources recommend 25–30%; add it yourself.