ERP Costs

We’re excited to announce a new educational video, Pay for ERP at Go-Live—When It Delivers Value, now available for IT personnel and executives involved in ERP projects. This concise video, led by industry expert Mark Engleman, challenges the conventional ERP payment model and offers practical strategies for aligning costs with value delivery.
Drawing on insights from over 1,000 ERP projects since 1996, the video examines why vendors typically require substantial license fees at the purchase decision, often a year or more before the system goes live. Unlike physical products with high production costs, ERP software incurs minimal vendor costs per instance, yet buyers bear significant upfront expenses for a system that delivers no value until implementation is complete.

The video highlights two primary reasons for this “pay-up-front” model—vendor cash flow and buyer lock-in—neither of which prioritizes the buyer’s interests. It then proposes actionable alternatives:

• Conducting preparatory implementation work without requiring the ERP system.
• Negotiating deferred payment terms, allowing buyers to halt projects without further license costs.
• Starting with limited ERP access and scaling closer to go-live.

These approaches reduce upfront costs, keep vendors engaged throughout implementation, and preserve flexibility for unexpected changes, such as a company sale.

This buyer-centric payment model offers a logical path forward and could reshape industry standards. Watch the video to learn more.