Häufig gestellte Fragen
What time horizon makes sense for a TCO calculation?
In practice, five to ten years is common, as this span corresponds to the typical service life of an ERP system and covers both the implementation and several update cycles; seven to ten years is frequently used. Shorter horizons tend to favour cloud or SaaS models because high upfront investments are avoided, while longer periods make the cumulative effect of recurring subscription or maintenance costs more clearly visible. The key point is to apply the same horizon to all offers being compared so that the results remain comparable. The exact design depends on the industry, size class and customising depth of the specific ERP setup.
What share of total ERP costs typically goes to licences?
Pure licence or subscription costs usually account for only a smaller portion of the TCO over the entire lifecycle; various market analyses frequently place them in a range of about 15 to 35 percent. The largest single block is generally implementation services such as consulting, customisation, data migration and testing, which depending on the source can reach around 30 to 45 percent. Added to this are ongoing operations, support, training and change management. Anyone basing an ERP decision solely on the list price therefore overlooks the majority of the actual costs.
Are training and change management costs part of the TCO?
Yes, training, onboarding and change management costs are firmly part of the TCO and are among the most frequently underestimated items. They include not only the initial user training before go-live but also recurring training after major updates and when staff changes occur. Added to this are indirect effects such as the temporary loss of productivity while employees familiarise themselves with the new system or are tied up in the project. These so-called soft costs appear in no quotation and must be estimated in the calculation; their exact level varies with the number of users and the complexity of the setup.
How does the TCO differ from the ROI?
The TCO looks exclusively at the cost side of an ERP investment, while the return on investment (ROI) puts these costs in relation to the economic benefit achieved. The two metrics complement each other but do not replace one another: a low TCO says nothing about profitability on its own if the benefit also remains low. Rather, the TCO provides the solid cost basis on which ROI or payback calculations can build in the first place. A complete picture of the investment decision therefore only emerges from the interplay of TCO and expected benefit.
Is a cloud ERP cheaper than on-premises when viewed through the TCO?
There is no blanket answer, as it depends heavily on the number of users, the depth of customisation and the in-house IT expertise available. Cloud or SaaS models shift hardware, infrastructure operations and update projects into the recurring subscription fee and thereby relieve internal IT, which can lower total costs over long horizons. On-premises solutions incur, in addition to the one-off licence, recurring maintenance fees — frequently in the order of about 15 to 22 percent of the licence price per year — as well as expenses for servers, operations and in-house staff. A TCO calculation over several years makes this shift transparent and shows under which assumptions which operating model is advantageous.
How are costs from different years made comparable in the TCO?
Since TCO items are spread over several years, future payments are frequently discounted to their present value for a clean comparison, for instance by calculating a net present value with a defined discount rate. This makes it possible to compare high upfront investments for on-premises and evenly distributed subscription costs for cloud models on a common basis. In addition, assumptions about inflation, service life and volume structure are often disclosed to keep the calculation traceable. For a robust analysis, it is advisable to run several scenarios with different user numbers and customisation depths.