The proposal said $180,000. Sixteen months later, the controller of a 95-person specialty food distributor had spent $340,000. Nothing shady happened. Nobody was oversold. The gap was made of line items that were never in the quote because nobody thought to write them down.
Here is where the extra $160,000 went.
The costs that never make the proposal
- Data cleanup, $38,000: 14,000 item records with duplicated units of measure, plus vendor and customer cleanup. Nobody budgets for cleaning what you already own.
- Your own people’s time, $96,000: a project manager at 60%, an AP clerk at 40%, a sales admin at 30%, over ten months. This is real money even though no invoice arrives.
- Temporary help, $21,000: six weeks of extra hands after go-live, when everyone is slower than usual and orders still have to ship.
- Extra training, $18,000: the vendor included two days. Two days covered the menus, not the jobs.
- Reports built after go-live, $27,000: every manager wanted “the report we used to have” in the first 90 days.
The one line item nobody forecasts
The subscription went up at renewal — $10,000 more in year two — because headcount and transaction volume had grown. It was in the contract. Nobody had read that clause closely.
Add it up: $60,000 software, $70,000 implementation services, and $210,000 of everything else. Your vendor quote is roughly a third of the real number.
How to get a number you can actually defend
- Ask each department head for hours per week they will spend on this, multiply by a loaded hourly rate, and put it in the budget as a line.
- Add 25% of the software cost for data cleanup. If your data is older than eight years, add 35%.
- Budget for one temporary person for the first six weeks after go-live.
- Set aside 15% of the total for reports and small fixes in the first 90 days.
- Read the renewal clause and write the year-three number into the business case.
This is where ERP Consulting earns its fee, and it is not the configuration. A good advisor tells you the $340,000 number before you sign, so the board approves the real figure instead of discovering it in month eleven.
Before your next steering meeting, take 30 minutes and multiply your team’s weekly hours by a loaded rate. You will probably find six figures of cost that has never appeared on a single page of your project plan.