A “rule-of-thumb” to find the ERP-project cost

A rule of thumb is that you should expect to use about 4-7% of the organization’s yearly revenue on external cost on an ERP-implementation project.

This means that if a company has a yearly revenue of 100 million, they should expect to get offers from ERP-vendors on projects costing around 4 to 7 million.

However, this is a very rough number and can vary a lot. Below I have listed some important factors that may affect these numbers:

  • The scope of the project and how much of the ERP-system should be implemented.
  • What industry the company operates (some industries has more comprehensive requirements to their ERP-solution than others – like e.g. an ERP project in manufacturing vs. financial services)
  • The type and complexity of the ERP-software package that is about to be implemented
  • The degree of organizational change that is involved in the project
  • The implementation method of the project

I have experienced quite extensive projects on complex ERP-packages that have been performed for way lower than 4% and much over 7%, but we can often use this rule as a quick starting point for diving deeper into the actual cost of the project.

Contact me through my contact pages if you are considering implementing an ERP-system and want help with estimating the cost of your ERP-project.