ERP Implementation Cost – What Manufacturers Need to Know

If you’re a small to mid-sized manufacturer, enterprise resource planning (ERP) software can greatly improve your day-to-day operations. However, it’s important to know that the total investment for such systems goes beyond the software license. A clear picture of all costs helps you budget accurately, avoid hidden costs, and ensure your ERP delivers real value over time.

What are ERP implementation costs?

ERP implementation costs are the total investment required to deploy and configure an ERP system. 

The actual cost of an ERP (Enterprise Resource Planning) often extends well beyond the software license itself. Hardware, consulting, training, and ongoing customer support can all add up, which is one reason more than 30% of ERP projects exceed their initial budget. For small to mid-sized manufacturers, particularly, understanding these costs upfront is crucial to effective budgeting and avoiding surprises during the rollout of a new ERP system.

In this article, we’ll break down the total cost of ERP implementation, helping improve your decision-making process in choosing a solution that fits your business needs, without running into hidden costs and drawn-out implementation times.

Different types of ERPs

Before looking at the costs of ERP implementation, it’s important to understand the different types of ERP systems available. This is because the type of ERP you choose has a big impact on the overall cost, timeline, and complexity of your implementation. 

For example, some systems require extensive customization and technical expertise, which can drive up both initial and ongoing costs. Others are ready to use out of the box, which reduces setup time but comes with less flexibility.

On-premise custom ERP systems

Custom ERP systems are designed to run on a company’s internal infrastructure (eg, servers, hardware) and are tailored to each business’s specific operations. These systems require extensive customization. This can include custom production sequencing rules, unique quality control workflows, or customer integrations with shop-floor equipment. Due to this level of customization, implementing a custom on-premise ERP requires particularly close involvement from internal stakeholders as well as dedicated external implementation teams, often brought in by the service provider. 

This customization comes with many benefits, but it also makes implementation expensive and time-consuming. For example, it’s not unusual for ERP implementation to take 6 to 18 months, or longer, and go into seven figures in implementation costs.

Today, custom on-premise ERPs are still a common sight, but they’re almost exclusively reserved for large multinational companies. 

On-premise out-of-the-box ERP platforms

Out-of-the-box (but on-premise) ERPs are ready-made systems that include preconfigured modules and workflows. This allows businesses to deploy them relatively quickly with little to no customization. Compared to custom on-premise systems, out-of-the-box software offers faster deployment and lower upfront costs, making it more appealing to small and medium-sized businesses. 

However, because this type of software is less flexible than custom ERPs, businesses that choose out-of-the-box software sometimes need to adjust their processes to fit the software (not the other way around). And, since it’s still installed in local servers on-premise, implementation still entails building an IT infrastructure to run on. 

Cloud-based ERP software

Most ERP software today is delivered as SaaS (software-as-a-service). These systems operate on a subscription-based pricing model and are predominantly cloud-based. In this kind of setup, the ERP vendor manages everything from software updates to hardware maintenance. The customer pays a monthly or yearly subscription, and only needs internet-connected devices to access the system. 

Cloud-based ERP software commonly includes modules for inventory management, production planning, shop floor management, and even CRM tools. This gives small to medium-sized manufacturers an all-in-one ERP platform, without the complexity of on-premise systems.

These ERP systems have become increasingly popular in recent years, with 72% of organizations opting for SaaS ERP solutions in 2025. This strong demand for SaaS ERP systems is due to their minimal maintenance, low upfront costs, and scalability.  

ERP costs explained

When evaluating the cost of ERP software, it’s essential to recognize that initial costs often account for only a small portion of the total cost. To get a better idea of the true cost of ERP implementation, it’s crucial to understand the total cost of ownership (TCO) of ERPs. 

TCO measures all of the costs associated with acquiring, deploying, and running an ERP system over its entire lifecycle. This means looking beyond the software price itself to include expenses such as hardware (e.g., servers, devices), running costs (e.g., maintenance and training costs), implementation services, etc. You should try to get a good understanding of the total yearly ownership cost when evaluating ERP solutions, to manage budgets and effectively calculate return on investment (ROI). 

The cost of an ERP implementation can vary widely between businesses, but several core factors tend to have the biggest influence:

• Company complexity: More product lines, sites, or regulatory requirements mean more configuration and training, driving up implementation costs.
• Number of users: Most ERP pricing models operate on a per-user basis. Therefore, a higher number of users usually increases software license fees. 
• In-house expertise: Consulting services can be a high cost, especially for custom or out-of-the-box systems. If internal staff have the time and skills to support setup and training, then consulting costs will be lower.
• Data quality: If BOMs, routings, and inventory records need cleaning or standardization, implementation takes longer and becomes more expensive.
• Integrations: Connecting the ERP with other business software or shop-floor equipment adds technical complexity and increases cost.

In general, the more complex the business and the more integration required, the higher the implementation cost will be. At the same time, clear data, well-aligned processes, and internal expertise can help keep both time and cost under control.

Next, let’s break down the major ERP implementation cost articles, starting with licensing fees.

1. Software license fees

Software license fees are the price a business pays to access and use an ERP system. Depending on the provider, this can be a one-time purchase, an annual contract, or a monthly subscription. The cost of a software license can also vary significantly based on the type of ERP system, the number of users, and the modules or add-ons included. Here’s an overview of the average license costs for each type of ERP system:

• On-premise custom systems: On‑premise custom systems typically use a perpetual licensing model, where customers pay a single upfront fee for each user license. For example, with SAP Business One, there’s a one‑time cost of around $3,200 per user. These license costs can increase quickly, as each additional user requires their own full license.
• On-premise out-of-the-box systems: For an out-of-the-box ERP, the ballpark figures range between a few thousand dollars for small to mid-sized businesses, all the way up to half a million for large-scale ERP projects.
• Cloud-based ERP systems: SaaS ERP systems are the least expensive when it comes to software license fees, and have become much more affordable in recent years. As of 2025, a typical monthly subscription fee for SaaS ERPs ranges from $40 to $600 per user.

2. Hardware and infrastructure costs

Hardware costs can vary widely depending on the business size and its operations. However, a rule of thumb is that hardware costs for implementing ERP systems should account for 20 to 30% of your total ERP budget. The type of software used also plays a big role in determining hardware costs. 

For example, with on-premise systems, infrastructure costs can make up a substantial portion of ERP implementation expenses. Because these systems are hosted and managed internally, the company must invest in (and maintain) all the hardware and IT resources required to keep the ERP running smoothly. Internal IT staff are also responsible for monitoring the system, troubleshooting, maintenance, and backups. 

SaaS ERP systems, on the other hand, are hosted in the cloud and maintained by the vendor. These systems still come with hardware and infrastructure costs, but they are significantly lower. Usually, the only requirements are internet access and devices such as computers or tablets to use the system. With SaaS ERP systems, there are no separate maintenance fees, as support and updates are included in the subscription. This lightweight infrastructure makes cloud-based ERP solutions more accessible for small and medium-sized manufacturers.

3. Implementation costs

Implementation is what’s needed to set up an ERP system and configure it according to existing processes. Depending on the organization, these services can be handled by the vendor’s onboarding team, in-house expertise, external consultants, or a combination of all three.

Implementation services can make up a significant portion of an ERP implementation budget, sometimes between 30 to 50% of the total cost of the ERP software. Depending on the type of system you choose, you can expect the following implementation service costs:

• On-premise custom ERPs: Implementation is usually about 2 to 3 times the software cost and includes heavy customization, long timelines, and frequent budget overruns. These projects require extensive vendor-led setup and onboarding.
• On-premise out-of-the-box ERPs: Implementation typically costs about the same as the software itself. While these are “ready-made” systems, they can be complex and still require configuration and some customization.
• Cloud-based ERPs (SaaS): Implementation costs are the lowest because there’s no installation, less technical setup, and more intuitive workflows. Many small businesses can implement cloud-based ERP systems with minimal implementation support.

For on-premise ERP systems, implementation is more resource-intensive. To align these ERP systems with existing workflows, businesses need to set up hardware, install the system, configure databases, and customize the software. Internal IT staff and external consultants must be heavily involved to manage integrations, test the system, and ensure everything is working as it should. 

Cloud-based ERP systems take significantly less time and resources to deploy. This kind of software is hosted and managed by the vendor, so implementation is limited to tasks like account setup, data migration, user configuration, and process mapping rather than technical installation. This requires significantly less effort on the part of the business. Many cloud ERP providers also offer detailed documentation to streamline the process and facilitate self-implementation.

4. Onboarding/training costs

The cost of training depends largely on the type and complexity of the ERP system. For example, custom ERPs often require extensive, hands-on training because they’re built around each business’s specific needs and processes. 

Employees have to learn both the technical aspects of the software and the unique workflows configured for their organization. Training often includes extensive workshops, documentation, and external technical support, all of which add to the TCO.

On the other hand, cloud-based ERPs are standardized systems that are more user-friendly. Training and onboarding typically require fewer resources and can often be done independently, with the help of built-in user manuals and demo videos.

On average, initial training costs $1,000 to $2,500 per user. Additional annual training typically costs 10 to 15% of the initial ERP investment. However, these additional costs also depend on the ERP platform being used. 

5. Maintenance costs

Maintenance is the work required to keep the software secure, stable, and up to date after implementation. Maintenance costs are typically 15% to 22% of the software license fees, but this also depends on the type of software being used. 

Organizations that implement on-premise ERP systems are responsible for maintenance. This includes everything from installing software updates and managing databases to monitoring server performance and ensuring backups are in place. Some companies also require additional IT personnel to perform regular monitoring, troubleshooting, and version upgrades. 

With cloud-based ERP systems, all maintenance is included. The user pays the subscription fee, and the vendor handles all updates, security, and infrastructure management. This means users automatically receive new features, bug fixes, and compliance updates at no added cost.

6. Consulting costs

A key step of any ERP implementation project is aligning the software with existing business processes. Consultants can help with this, typically helping businesses with critical aspects of implementation, such as:

• Mapping processes
• System configuration (BOMs, inventory, production, purchasing, costing)
• Test environments and trial runs
• Team training and onboarding
• Go-live support
• Post-launch optimization

Additional costs for consulting can vary widely depending on the organization, its processes, and the ERP software being implemented. For large enterprises implementing a custom ERP, consulting costs can go into the hundreds of thousands. For small companies using a SaaS ERP, sometimes no consultation is needed, or it can be comparatively lightweight. Therefore, it’s difficult to give a cost for ERP consultation services. 

Here are some real-world examples from consultants who help SMEs implement MRPeasy manufacturing ERP:

• Altemir Consulting, founded by former NASA engineer David Altemir, helps manufacturers across North America implement and optimize ERP systems. Altemir Consulting typically manages the full ERP adoption process, from discovery and setup to post-launch support. Their ERP projects usually take around three months, with costs ranging from $12,000 to $25,000.
• Move 2 Cloud is an MRPeasy partner consultant from Australia. Consultations usually take about a month and cost anywhere from AU$2,500 to AU$30,000 (~$1600 to $19,500).
• Cohesis is another Australian ERP consultancy firm. Cohesis offers structured implementation and hands-on training, which typically takes 3 to 4 months. The cost of their services usually ranges from AU$15,000 to AU$20,000 (~$9,750 to $13,000).

Example of ERP implementation costs

To illustrate what ERP implementation can cost, let’s look at a real-world example. Imagine a 50-person sparkling beverage manufacturer struggling with traceability issues, manual inventory counts, and unreliable planning tools. They’ve decided it’s time to adopt a proper ERP system. 

Around ten people (from production and purchasing to warehouse supervisors and management) will need access to the new system. The company compares the two most realistic options: an on-premise out-of-the-box system and a more modern cloud-based ERP. 

Here’s a breakdown of the costs for each:

Scenario 1: An out-of-the-box, on-premise ERP 

This type of ERP system provides standard modules for production, inventory, and batch control, but requires local installation, hardware, and a heavier consulting footprint. The rollout requires more time and hands-on work, and the IT support performed is in-house.

Estimated costs:

• Software license: ~$50,000 to $75,000 in perpetual licenses
• Consultant and implementation services: ~$50,000 to $100,000
• Hardware & infrastructure: ~$8,000 to $12,000
• Maintenance (support from vendor, server upkeep, electricity, etc): ~$13,000 to $20,000 per year
• Training (vendor-led sessions and internal onboarding): ~$3,000
• Total estimated first-year cost: ~$124,000 to $210,000
• Annual cost after the first year (ongoing maintenance): ~$13,000 to $20,000 per year

This setup can handle the manufacturer’s requirements well, but the cost of ownership is high, particularly in the first year. While the license fee is a one-time payment, hardware has to be maintained, IT staff stay heavily involved, and any workflow changes typically require additional paid consulting. What’s more, when a new version of the ERP system becomes available, there’s no guarantee that the software vendor won’t post a new software license.

Scenario 2: Cloud-based ERP (SaaS)

Going with a cloud-based ERP removes the need for servers and installation altogether. The software offers full functionality when it comes to production planning and inventory management. But the team still needs guidance on things like standardizing recipes, adapting workflows, and configuring order management.

Estimated costs:

• Subscription fees (~$500 to $1,000 per month for 10 users, depending on plan): $6,000 to $12,000 per year
• Consultant and implementation services (data migration, recipe setup, workflow adaptation, trial runs, go-live): $0 to $15,000
• User training: $0 to $2,000
• Hardware (3 laptops and large montitors for workstations and 2 shop-floor tablets): ~$6,000
• Total estimated first-year cost: ~$12,000 to $35,000
• Annual cost after the first year (subscription fees): $6,000 to $12,000

With a SaaS ERP, the manufacturer avoids most hardware purchases, reduces long-term IT overhead, and receives automatic updates and maintenance as part of the subscription. The upfront investment is around 75-90% smaller, and the ongoing costs are more predictable.

Which ERP is the better fit?

After comparing the two options, the manufacturer sees that the cloud-based ERP delivers a much stronger return on investment. The on-premise system can do the job well, but the heavier infrastructure costs and maintenance burden make it a more expensive and risky option over time. The cloud solution offers a faster, cleaner rollout and controlled costs that work within the budget of a 50-person operation.

Choosing the right ERP for your business

Overall, when trying to decide on the  ERP system with the right price, the key is to evaluate not just the license, but the total cost of ownership. Implementation services, hardware, training, and maintenance all contribute significantly to the total cost of the project.

Consultant costs can also add up quickly, making the cost of ERP implementation much higher than the initial software purchase price. For this reason, always consider whether external consultants will be required to help you implement the software, and factor these costs into your budget. 

When looking for the right ERP for your business, ask yourself:

• How time-consuming and costly is the implementation process?
• What investment is needed for onboarding and training?
• Does the software meet my current system requirements?
• Does the software align with the long-term goals of the company?
• How willing are our employees to learn how to use it?
• What level of support is needed from the vendor?
• What other systems should the ERP integrate with?

Key takeaways

• ERP implementation cost is the total investment required to deploy an ERP system, including software, consulting, hardware, training, and ongoing maintenance. These costs vary significantly depending on the size and complexity of an organization, and whether the ERP solution is on-premise or cloud-based.
• The time and internal effort invested in implementation matter as much as the price. Some systems require months of configuration, custom development, and IT work, while others can be deployed in weeks. Longer, more complex rollouts often mean higher consulting fees, heavier internal involvement, and slower ROI.
• More companies are moving toward cloud-based SaaS ERP systems. These modern platforms can offer capabilities that previously required large on-premise setups, while also delivering more predictable costs and easier scalability. 
• Consulting needs vary widely. Custom systems often require extensive consulting and long implementation timelines. Implementing SaaS systems usually requires lighter support, and consultants help mainly with things like process mapping, data migration, and initial configuration.
• Understanding the total cost of ownership prevents budget surprises: Looking beyond the license fee (factoring in hardware, maintenance, upgrades, and the cost of internal time) will help you choose a solution that’s affordable at launch, but also for years to come.

Frequently asked questions (FAQ)

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