ERP Implementation Costs: All Cost Components and What Drives Them

“How much does an ERP implementation cost?” It is the question every CFO asks. And the honest answer is: it depends.

Not because we want to dodge the question. But because any figure someone gives you without knowing your situation is, by definition, unreliable. The cost of an ERP implementation is determined by your scope, your organisation and the choices you make during the project. Not by a market average that does not apply to half of all businesses.

What we can give you, based on over 250 projects: a clear overview of every cost component, how they relate to each other, and which factors cause them to be higher or lower. That is the information you need to build a realistic business case before you sign on the dotted line.

The total cost of an ERP implementation consists of eight concrete components. Licences account for only 20 to 30 percent of the total budget. The remaining 70 to 80 percent goes towards implementation, data migration, training, change management and unforeseen items. If you only look at the licence fee, you are missing the bulk of the investment.

The 8 cost components of an ERP implementation

Below you will find every cost component that belongs in your budget. Not with specific amounts, because those are meaningless without knowing your scope, but with the relative weight and the factors that determine the total.

Licence costs (20-30%)

The line item everyone knows, and everyone overestimates in relative importance. Licence costs depend on the number of users, the licence type (full user vs. limited access) and the modules you subscribe to. With cloud solutions, you pay monthly per user; with on-premise, you pay a one-off fee plus an annual maintenance contract.

The pitfall: organisations choose a package based on the per-user licence price, while implementation costs can be three to five times higher. A cheaper licence that requires more customisation ends up costing more than a pricier licence that fits your needs out of the box.

Implementation and consultancy (30-40%)

This is almost always the largest cost component. It covers the hours of external consultants: functional design, configuration, testing, project management. For a typical SME project, you are looking at 500 to 2,000 consultancy hours spread over 4 to 12 months.

The main cost driver is customisation versus configuration. Every piece of customisation costs three to five times more than standard configuration, and it also needs to be maintained after go-live. We see this as the area where most budget overruns originate.

Data migration (8-12%)

Transferring data from your current system to the new one. Sounds straightforward. It is not. Your data is likely polluted, incomplete, or stored in formats that are not directly compatible. Plan for 4 to 8 weeks, depending on the number of source files and the quality of your master data.

The cost driver: data quality. Organisations that clean up their data in advance cut the duration of this phase in half.

Integrations (5-15%)

Connecting your ERP system to other applications: your webshop, warehouse management system, CRM or financial software. Per integration, plan for 2 to 8 weeks, depending on complexity.

This is the component with the widest range. Do you have two standard cloud integrations? Then you are at the lower end. Do you have five legacy systems with custom connections and real-time data exchange? Then this adds up quickly.

Training (5-8%)

Training your employees on the new system. Often underestimated, always essential. Key users need 3 to 5 days of intensive training; end users need 1 to 2 days per role. The cost driver is the number of unique roles in your organisation: the more different work processes, the more training material required.

Change management (5-8%)

The component most often forgotten during budgeting. Change management runs throughout the entire project: from the first communication about the initiative to months after go-live. It covers buy-in, communication and guiding employees through the transition.

Organisations that do not invest here pay for it later in the form of resistance, low adoption and employees falling back on Excel.

Infrastructure (3-5%)

With cloud solutions (the majority in 2026), infrastructure costs are relatively limited: hosting, storage, possibly a test environment. With on-premise, you can add server costs, backups and IT management on top.

Contingency (15-20%)

This is not a dormant line item. It is a necessity. In our experience, contingency is tapped into on every project. Not because something always goes wrong, but because something always changes. Your processes turn out to be more complex than expected. Additional users come on board. Or halfway through the project, management decides that one particular report is absolutely needed after all.

A contingency of 15 to 20 percent is not pessimism. It is realism.

Hidden costs that are not in the proposal

The eight components above make up the official budget. But there are costs that rarely appear in a project proposal and that significantly increase your total cost of ownership.

Productivity dip among your key users. Your key users spend 20 to 40 percent of their working time on the ERP project during the implementation. For a 9-month project, that means 3 to 4 months of reduced productivity from your best people. Their regular work either piles up or needs to be handed over.

Running dual systems. Around go-live, you run two systems in parallel for two to four weeks: the old and the new side by side. Double entry, double checking. Most project plans do not account for this.

Internal hours. Most proposals only calculate external consultancy hours. But your own people spend hundreds of hours on workshops, testing, data cleansing and user training. Those hours are not free, even if they do not appear on your implementation partner’s invoice.

Licence expansion after go-live. After six months, it turns out you need that extra module after all. Or that ten employees who were supposed to have read-only access now also need to enter data. Those are additional licence costs that were not anticipated at the start.

Scope creep. This deserves separate attention, and we have covered it in detail: read all about scope creep in ERP implementations. In short: every additional wish added during the project costs time and budget. Usually more than you expect.

Hidden costs in an ERP implementation typically amount to 30 to 50 percent on top of the planned project budget. Not because projects are poorly managed, but because organisations fail to include internal time investment, productivity loss and post-go-live adjustments in their original business case.

ERP packages: three price segments

The choice of ERP package is one of the biggest cost drivers. Not just because of the licence, but primarily because of what the package can do out of the box and where customisation is needed. We support projects on all major platforms and see them fall into three segments:

Accessible segment: AFAS, Exact Online. Lower entry threshold, faster implementation, fewer configuration options. Suited to organisations with relatively standard processes. Implementation timelines are shorter (3 to 6 months), but depth in production and supply chain processes is more limited. Want to understand the nuances? Read our comparison AFAS versus Exact.

Midrange: Microsoft Dynamics 365 Business Central, SAP Business One. The most popular segment among Dutch SMEs. More configuration options, a larger ecosystem of integrations and partners, but also a higher implementation investment. Typical timeline: 6 to 12 months.

Enterprise: Microsoft Dynamics 365 Finance & Supply Chain Management, SAP S/4HANA. For complex, multi-entity organisations with advanced production, logistics or financial processes. The highest investment in both licences and implementation, but also the most flexibility. Timeline: 9 to 18 months or longer. The differences between Business Central and Finance & SCM are substantial.

The key insight: the cheapest package is not always the cheapest total solution. A system that fits your processes well requires less customisation. And customisation is, as you now know, the biggest cost driver in any ERP implementation.

How do you keep costs under control?

Now that the overview is complete: you can control the costs. Not by cutting corners in the wrong places, but by approaching the project smartly.

Start with a solid selection process. Choosing the right package is the single biggest cost reduction you can achieve. A system that does not fit your processes generates customisation. Invest in a thorough selection process; it pays for itself.

Choose the right implementation partner. Your partner determines whether your budget holds. We have outlined seven criteria to sharpen that choice: read our article on choosing the right ERP implementation partner.

Define the scope upfront and protect it. Document what is and is not in scope. Set up a change request procedure. Park new wishes on a list for phase 2. Every scope change during the project costs more than the same change would have cost upfront.

Plan realistically. A timeline that is too tight leads to overtime, errors and higher costs. For a typical SME project, plan for 6 to 12 months of implementation time. Anything shorter should be questioned critically.

Include a contingency of at least 15 percent. This is not a sign of weakness in your business case. It is a sign of realism. Every experienced CFO knows that projects deviate from the plan. The question is not whether, but by how much.

Seek independent advice. An advisor who also sells licences has a vested interest in steering you towards a particular package. An independent party looks at what fits your organisation, not at what yields the highest margin. In our experience, that difference saves a significant amount on the total ERP implementation costs.

Frequently asked questions

What costs are involved in an ERP implementation?

An ERP implementation consists of eight cost components: licences (20-30% of the total), implementation and consultancy (30-40%), data migration (8-12%), integrations (5-15%), training (5-8%), change management (5-8%), infrastructure (3-5%) and contingency (15-20%). Licence costs are merely the visible part; implementation and consultancy almost always represent the largest investment.

What are hidden costs in ERP?

The main hidden costs are: productivity loss because key users spend 20 to 40 percent of their time on the project, running old and new systems in parallel (2 to 4 weeks), internal hours for workshops and testing, unforeseen licence expansions after go-live and scope creep. These items typically add 30 to 50 percent on top of the planned budget.

How do I keep my ERP implementation within budget?

The five most important measures: choose the right package through a thorough selection process (prevents customisation), protect the scope (change request procedure), plan realistically (6 to 12 months for SMEs), include at least 15 percent contingency and choose an implementation partner based on quality, not the lowest price.

What determines whether an ERP package ends up being expensive or affordable?

Not the licence price, but the extent to which the package fits your processes out of the box. A cheaper package that requires extensive customisation is more expensive than a pricier licence that aligns better by default. Customisation costs three to five times more than configuration, and it needs to be maintained after go-live as well. The fit between package and processes is the single biggest cost factor.

What is your next step?

An ERP implementation is a significant investment. That is beyond question. But it is an investment you can control, provided you know where the costs are and which choices influence them.

Curious what this looks like for your specific situation? Get in touch for a no-obligation conversation. No sales pitches; an honest discussion about your situation, your processes and the choices available to you.

Or read more about our approach to ERP implementation projects: from business case to go-live and beyond.