Vendor pricing is the most visible cost of an EPM platform — and often the smallest portion. Implementation services, internal team time, data migration, training, ongoing administration and future customization typically exceed the software subscription over a 5-year period.
This guide covers how to calculate total cost of ownership, the cost categories most teams miss, how cloud and on-premise differ and how to build a TCO model for vendor comparison. Our Implementation Calculator can help estimate total project cost.
TCO Cost Categories
Software subscription
Annual platform fees. Cloud is subscription; on-premise is license plus maintenance. Expect 3-5% annual increases.
Implementation services
Professional services for design, configuration, integration, testing and go-live. Typically 1-2x first-year subscription for mid-market, 2-4x for enterprise.
Internal team time
Your team's time for requirements, testing, training and administration. Often the largest hidden cost — 0.5-1.5 FTEs during implementation.
Data migration and integration
Building connections to ERPs, HRIS and other sources. Complex integrations can equal the cost of the software itself.
Training and change management
User training, documentation and ongoing enablement. Under-investment here is the leading cause of low adoption.
Ongoing administration
Model maintenance, user management, report development. Plan for 0.25-0.5 FTEs ongoing for mid-market.
Building a 5-Year TCO Model
Capture year-zero implementation costs and annual run-rate for years 1-5. Compare vendors on total 5-year cost, not year-one subscription. Account for user growth, module expansion and escalation clauses. Include internal FTE costs at fully loaded rates.
The organization that builds the most honest TCO model makes the best vendor decision.