ERP implementation seems to be a well-calculated process: there is a platform, there are requirements, there are contractors. But in practice, the cost of the same technical task can differ by 2-3 times. Why do tenders often show such a gap? And what factors actually shape the cost of ERP implementation?
In this article, we consider what is behind the polar numbers in integrators' offers and how to avoid making a wrong choice.
7 reasons to reduce the cost of ERP implementation
1. Contractor's expertise: the narrower the specialization, the more accurate the estimate of ERP implementation costs
Integrators with experience in your industry can offer a more accurate implementation model. That's why they:
- are quicker to assess the scale and complexity;
- often have ready-made modules or developments;
- can adapt a standard solution to the specifics of the business.
This reduces overall costs and shortens the implementation time. Therefore, such an offer can be cheaper - without losing quality.
2. Incomplete scope in the commercial offer
One of the most common reasons for "cheap" estimates is limited scope. For example:
- ERP system licenses are not included;
- customization or training is outside the scope of the project;
- a significant part of the work is estimated on an hourly basis without a final budget.
Such offers seem favorable, but later turn out to be more expensive due to unexpected additional costs. Always check what is included in the price.
3. Dumping or temporary reduction of margin
Sometimes companies deliberately lower the price to win a tender:
- It may be an attempt to keep the team busy during the downtime;
- or a desire to enter a new niche, reducing profits at the start.
This is not always a bad thing, but it carries risks: the team can be transferred to another project as soon as a more profitable contract appears.
4. Small team without administrative costs
Three experienced specialists can offer a favorable price - they have fewer expenses, no office and no extra staff. But it's worth considering:
- lack of reserves in case of force majeure;
- dependence on each team member;
- limited scope of parallel tasks.
If the project is small, this format can be effective. But for large-scale automation, it's better to have a stable partner.
5. Involvement of juniors under the leadership of a team leader
Sometimes a contractor reduces the price by forming a team of less experienced professionals. If the project is simple, this can work. But the risks increase if:
- Timlid can't pay enough attention;
- the project turns out to be more complicated than expected.
For an ERP implementation, even a basic one, it is critical to have a stable and experienced team.
6. The "name" of the company - and its price
Famous brands often put their reputation in the price. This is often justified - you get high quality standards, proven processes, SLAs, and backups. But it should be understood that part of the cost is the "name premium".
7. Additional risks due to unfamiliar industry
If the contractor has not worked in your industry before, they may include an additional margin for risks. For example:
- complex government reporting;
- non-standard logistics scenarios;
- integration with industry-specific software.
This increases the cost, but may be justified if others have not taken these features into account in their calculations.
How not to make the wrong choice?
- Compare not only the numbers, but also the content of commercial offers.
- Check the integrator's experience in your industry.
- Clarify everything that is unclear - from the team structure to the method of support after the launch.
- Request a turnkey price or a fixed price within the terms of reference.
Conclusion.
The cost of ERP implementation is formed not only by the price of the system. It is much more determined by the team's experience, project scope, depth of analytics, and risk tolerance. Cheap offers do not always mean savings - sometimes they are just deferred costs. As an integrator Odoo, we are in To-Do We always explain to our clients what the cost is based on, what is included in the project, and what results they will get at the end.
