It is the first question most businesses want answered and the one most suppliers avoid. The honest answer is that it depends — but that is not useful on its own, so this article sets out what it depends on, so you can work out roughly where your own project would sit before you speak to anyone.
Cost is made up of five parts, not one
People often think of ERP cost as a single number. It is really five, and they behave quite differently.
1. Licensing
What you pay Microsoft, usually per user per month. It varies by which application you need — Business Central, Finance, Supply Chain Management, Sales — and by whether a given user needs full access or only to read and approve. Most organisations need fewer full licences than they first assume.
This is the most predictable part of the cost, and the part you will continue paying for as long as you use the system.
2. Implementation
The work of configuring the system to how your business actually operates: chart of accounts, approval workflows, document layouts, user roles, and whatever is specific to your industry. This is usually the largest single cost in year one.
It is also the part that varies most between businesses. An organisation with straightforward processes and clean data can be live in weeks. One with unusual workflows, multiple entities or heavy customisation requirements takes considerably longer.
3. Data migration
Moving your existing customers, suppliers, items, balances and history into the new system. The cost here depends almost entirely on the state of your current data, and this is where projects most often overrun.
If your existing records are consistent and well structured, migration is straightforward. If the same customer appears four times under slightly different names, somebody has to resolve that before anything can move — and that work has to happen whether you budget for it or not.
4. Training
Often underestimated, and the most common reason implementations disappoint. A well-configured system that nobody knows how to use delivers nothing. Budget for role-based training rather than a single session for everyone, and expect to need refresher sessions some weeks after go-live, once people have hit real situations.
5. Ongoing support
After go-live you will need someone to answer questions, apply updates, and make the small changes that always follow. This can be an internal capability or an arrangement with your implementation partner, but it is a real ongoing cost either way.
What pushes the cost up
- Multiple legal entities or currencies.
- Integration with other systems — payroll, a bank, a point-of-sale system, URA EFRIS.
- Customisation beyond what the standard product does. Each customisation also has to be maintained through future updates.
- Poor existing data, which lengthens migration considerably.
- Unclear internal decision-making. Projects stall, and stalled projects cost money.
What keeps the cost down
- Adopting standard processes where your current way of working is not actually a competitive advantage.
- Phasing. Implementing finance first and adding supply chain later spreads cost and reduces risk.
- Cleaning your data before migration begins rather than paying someone else to do it during the project.
- Naming one internal decision-maker with the authority to settle questions quickly.
A reasonable way to think about budget
As a rough rule of thumb, first-year implementation cost for a mid-sized organisation typically exceeds the first year of licensing, often substantially. Businesses that budget only for licences are usually surprised.
From year two onward the position reverses: licensing and support continue, while implementation cost falls away.
Questions to ask any supplier
- What is included in the quoted figure, and what is specifically excluded?
- How many days of training are included, and for how many people?
- What happens if data migration takes longer than estimated — who bears that?
- What does support cost after go-live, and what response time does it commit to?
- Which parts of the quote are fixed, and which are estimates?
A supplier who answers these plainly is giving you a better signal about how the project will run than any figure on the front page of a proposal.
Getting a figure for your own business
There is no substitute for a proper scoping conversation, because the answer genuinely does depend on your transaction volumes, how many people will use the system, and the state of your existing data.
HRP Solutions implements Microsoft Dynamics 365 for organisations across Uganda. If you would like an indicative figure for your own situation, get in touch and we will talk through what your project would involve.