ERP replacement cost: what to budget and a worked example
No public average for an ERP replacement survives scrutiny. What does exist is a set of published prices, a few reported ratios and consistent evidence of overrun, which together are enough to build a budget that holds.
Contents
The budget for an ERP replacement is usually written from a vendor’s quote, and the quote covers the part the vendor sells. The projects that overrun do so on the parts it does not. ISG found nearly 60% of SAP migrations at large companies delayed and over budget, and 49% carrying out little or no process re-engineering1.
The cost of standing still
Staying has a price too, and it rises. In Vendr’s marketplace data, on-premises SAP maintenance runs at 17 to 22% of licence cost a year2. Extended maintenance for ECC from 2028 to 2030 adds two percentage points to the maintenance basis3. Since 2023 SAP has adjusted maintenance fees on existing contracts in line with local price indices, capped at 5.0% by its own account, and it has announced a further adjustment from 1 January 2027, again capped at 5%45.
In aggregate the sums are large. SAP’s on-premises software support revenue was €10.5 billion in 20256. For a single company the test is simpler: the yearly support fee, multiplied by the years until the replacement is live, is the first line of the budget.
What each route publishes
| Route | Published price | What is not included |
|---|---|---|
| S/4HANA Cloud (upgrade) | No list price we could open. Marketplace estimate: $200 to $300 per user a month for the public edition2 | Implementation, at one to three times the annual subscription by the same estimate |
| Dynamics 365 (switch) | $210 per user a month for Finance and for Supply Chain Management; Premium $300; paid yearly78 | Partner implementation; Copilot Credits |
| Odoo (switch) | Standard €19.90, Custom €35.90 per user a month in the first year, billed yearly9 | Implementation, Odoo.sh hosting, maintenance of custom code |
| OpenLazarus (build) | Hosting from $150 a month; developer support from $4,500 a month; 5.5% fee on AI credits10 | AI credits consumed; consulting, priced per engagement |
| Third-party support (defer) | Not published; "up to 50%" lower annual support fees, per Rimini Street11 | The replacement itself |
Vendr’s figures come from anonymised transactions of undisclosed number and should be read as estimates. They are used here because we could open no list price on SAP’s own site.
A worked example for 100 users
The arithmetic below uses only the published or reported figures above, for one year of software. It excludes implementation.
| Route | Calculation | Per year |
|---|---|---|
| S/4HANA Cloud, public edition | 100 users × $220 to $280 × 12 (Vendr’s median band for 100 to 500 users)2 | $264,000 to $336,000 |
| Dynamics 365, both applications for every user | 100 × ($210 + $210) × 1278 | $504,000 |
| Dynamics 365, Finance only | 100 × $210 × 12 | $252,000 |
| Odoo Custom, first year | 100 × €35.90 × 129 | €43,080 |
| OpenLazarus, starting prices | ($150 + $4,500) × 12, not priced per user10 | $55,800, plus AI credits and any consulting |
Two cautions. The Dynamics figure with both applications is an upper bound, because few companies license every user for both. The OpenLazarus figure is a floor: it covers hosting and developer support at the published starting prices, and a company replacing an ERP will also pay for AI usage and, in most cases, a consulting engagement that is quoted individually.
What the table does show is the shape of each cost. Three of the routes charge per user for as long as the system runs. One charges for hosting and engineering, and the system belongs to the company. OpenLazarus says a single owned AI layer cuts IT costs by 80 to 90%; that is the company’s own claim, and a buyer should test it against the lines below.
The lines every budget needs
Put each route in the same table, over five years
- Support until cut-over. The current maintenance fee, with any extended-maintenance premium and yearly adjustment, for every year the old system stays live.
- Software. Subscription or hosting at list price, then at the quoted price, with the renewal terms written in. Without a negotiated cap, Gartner reports renewal increases of 10% or more on SAP private-cloud contracts; SAP calls the analysis factually incorrect4.
- Implementation or build. Vendr’s ratio for S/4HANA is one to three times the annual subscription, and a three-year total cost of two and a half to four times the first-year subscription2.
- Process re-engineering. Its own line, because it is the one most often left out1.
- Data migration and interfaces. Master data, open items, and the history that auditors need.
- Internal time. Key users in design and testing, at loaded cost.
- Running two systems. The parallel period, including the old system’s support.
- Contingency. Sized to the evidence: most projects overrun.
How to use the numbers
- Fill the table for the two routes that survived the upgrade-or-replace tests.
- Ask each vendor to confirm in writing what the price will be in year four, and what triggers an increase.
- For a build route, ask for the engagement quote and a ceiling on AI usage for the first process.
- Compare totals over five years, then compare what the company owns at the end of them.
The budget that holds is the one that names every line, including the ones no vendor will quote. The sequence that keeps spending in step with results is in the migration plan.
Questions buyers ask
How much does it cost to replace an ERP system?
It depends on the route more than on the size of the company. Renting a suite costs a published $210 per user a month for each Dynamics 365 application or from €19.90 for Odoo, plus implementation. Vendr’s marketplace data puts an S/4HANA implementation at one to three times the annual subscription. An owned system at OpenLazarus’ published starting prices costs $55,800 a year for hosting and developer support before AI credits and any consulting engagement.
Is there an ERP replacement cost calculator?
The table in this guide works as one. Multiply users by the published monthly price and by twelve for the subscription, add implementation at the reported ratio, add internal time and a contingency, and run the result over five years for each route.
What are the hidden costs of an ERP replacement?
The lines that are not on the vendor’s quote. Process re-engineering, custom code and interfaces, data migration, key users’ time, a period of running two systems, and renewal increases after the first term. Gartner reports private-cloud renewal increases of 10% or more at SAP where no cap was negotiated, an analysis SAP disputes.
Does replacing an ERP save money?
It can, when the replacement removes a recurring fee instead of renaming it. On-premises maintenance runs at 17 to 22% of licence cost a year in Vendr’s data. A route that ends that fee and does not replace it with a per-user subscription changes the cost base; one that swaps it for another subscription mostly changes the vendor.
Sources
- Most SAP migrations bust budgets and deadlines, study finds. The Register, 5 Feb 2026. Accessed 11 Nov 2026.
- SAP software pricing and plans 2026. Vendr. Accessed 11 Nov 2026.
- SAP S/4HANA: commitment to innovation and maintenance until 2040. SAP News Center, 4 Feb 2020. Accessed 11 Nov 2026.
- Unwary SAP private cloud users face 10% renewal hikes, warns Gartner. The Register, 14 Oct 2025. Accessed 11 Nov 2026.
- SAP passt Wartungsgebühren 2027 an. Complion. Accessed 11 Nov 2026.
- SAP’s grand cloud escape plan €2B short of the runway. The Register, 19 Mar 2026. Accessed 11 Nov 2026.
- Finance management software pricing. Microsoft. Accessed 11 Nov 2026.
- Supply Chain Management pricing. Microsoft. Accessed 11 Nov 2026.
- Pricing. Odoo. Accessed 11 Nov 2026.
- Pricing. OpenLazarus. Accessed 11 Nov 2026.
- Third-party support for SAP. Rimini Street. Accessed 11 Nov 2026.
Updated 11 Nov 2026: First published. Prices read on vendor pages on this date.