Alas. Hidden costs—they’re everywhere.
Imagine this: You get a call from a friend. $30. That’s all it takes to see 80’s hair rock sensation Winger live in the flesh on-stage at the local casino theatre. Whether its the flood of hairspray-scented memories or a sparser than normal social calendar, you figure, “Why not?” Time to tight-roll the jeans and pencil in an ill-conceived night of pop metal and power ballad nostalgia!
Hold the phone, though. $7.25 in “service fees.” $4.25 in “order processing” costs. $2.50 for the privilege to print the tickets at home. What the heck? Almost 50% in hidden ticket surcharges to see Winger? The price of ironic enjoyment just got too damn high!
While you’ll probably recover from the disappointment of passing on the Winger show, the fallout from hidden ERP costs can be tougher to manage.
ERP pricing—like, ahem, Winger concerts—can be divided into sub-costs. Winger shows are subject to a few particularly annoying hidden costs. But ERP projects can be broken down into a wide number of individual line items, each representing an element of purchasing and implementing the software. In part, it’s the sheer volume of discrete ERP cost factors which makes it likely that some will sneak up on you.
Additionally, only a handful of ERP line items are actually predictable and stable from one ERP project to another. Most cost factors are highly variable and dependent on your specific needs. This volatility often leads to a delayed presentation of some price-contributors and an ERP hidden cost rude awakening.
Whether you are just working up initial budgetary numbers or you are comparing final proposals, consult this checklist for a comprehensive run-down of the ERP costs to keep an eye on:
One last thing to remember: Don’t forget the soft costs! While there’s no shortage of vendor costs you’ll want to pin down to the exact dollar when evaluating ERP project pricing, there are also internal soft costs to consider. Forgoing vendor sponsored services like data conversion or training is an option, but consider it carefully. Tasking employees with unfamiliar ERP implementation tasks can take them away from primary job responsibilities and extend your rollout timeframe—outcomes unlikely to be net positives for your company’s bottomline.