# ERP Selection Delay Cost Calculator

> Source: https://netray.co/tools/erp-selection-delay-cost-calculator
> Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems.
> Section: Free Tools

## Short answer

Put a monthly price on stalling an ERP selection: benefits you do not capture, the legacy system you keep paying for, and price drift on the quote.

## Category

erp-migration

## Audience

- CIO
- CFO
- ERP project lead

## Tool

**Kind:** calculator

**Currency:** $

**Inputs:**

#### Annual steady state benefit of the new ERP

**Key:** benefit

**Type:** number

**Default:** 900000

**Min:** 0

**Step:** 25000

**Unit:** per year

**Help:** From your business case: labor savings, inventory reduction, fewer write-offs and similar. Use a conservative figure.

#### Extra monthly cost of keeping the legacy system

**Key:** legacy_extra

**Type:** number

**Default:** 12000

**Min:** 0

**Step:** 500

**Unit:** per month

**Help:** Workarounds, extended support, manual reconciliation and spreadsheet effort that go away after cutover.

#### Total price of the preferred proposal

**Key:** quote

**Type:** number

**Default:** 1500000

**Min:** 0

**Step:** 25000

**Unit:** one time

**Help:** Subscription for year one plus services and other first-year costs.

#### Expected annual price drift

**Key:** infl

**Type:** number

**Default:** 4

**Min:** 0

**Max:** 20

**Step:** 0.5

**Unit:** % per year

**Help:** Quote expiry, rate card increases or quarter end discounts you will lose.

#### Delay in decision

**Key:** delay

**Type:** slider

**Default:** 6

**Min:** 0

**Max:** 24

**Step:** 1

**Unit:** months

**Outputs:**

#### Benefit per month

**Key:** monthly_benefit

**Expr:** benefit / 12

**Format:** currency

#### Deferred benefit

**Key:** lost_benefit

**Expr:** monthly_benefit * delay

**Format:** currency

**Description:** Benefit you would have captured earlier if the project had started sooner. It is deferred rather than destroyed.

#### Extra legacy cost during the delay

**Key:** extra_legacy

**Expr:** legacy_extra * delay

**Format:** currency

#### Price drift on the quote

**Key:** drift

**Expr:** quote * infl / 100 * delay / 12

**Format:** currency

#### Total cost of the delay

**Key:** total

**Expr:** lost_benefit + extra_legacy + drift

**Format:** currency

**Primary:** true

#### Cost per month of delay

**Key:** per_month

**Expr:** if(gt(delay, 0), total / delay, monthly_benefit + legacy_extra + quote * infl / 100 / 12)

**Format:** currency

**Primary:** true

**Chart:**

#### Cumulative cost of delay

**Type:** line

**X:** delay

**From:** 0

**To:** 24

**Steps:** 25

**Series:**

- total
- lost_benefit

**Disclaimer:** A planning view only. Benefits are shifted in time rather than fully lost, and a rushed selection can cost more than a delay. Use it to frame the trade-off, not to justify skipping due diligence.

## Content

**Intro:** Selection projects tend to drift: another demo round, another reference call, another committee. Each month has a cost, and it is rarely discussed. This calculator turns the delay into three concrete numbers so the steering committee can weigh the value of more diligence against the price of waiting.

**Sections:**

#### How to use it

**Body:** Take the steady state annual benefit from your business case and enter a conservative number. Add the extra monthly cost of running the legacy system, such as manual reconciliation or extended support, and the price of the proposal you prefer. Set the expected price drift and the delay you are considering. The result shows the total cost of the delay and the cost for each month, which you can compare against the value of the extra diligence.

#### What the numbers mean

**Body:** Deferred benefit is annual benefit divided by twelve, times the delay. It is a timing cost, because the benefit starts later, not never. Extra legacy cost is a real cash cost that continues until cutover. Price drift is an estimate of how much the proposal may rise if the quote expires or the vendor reprices. The total is the sum of the three. Treat it as an order of magnitude, not a forecast.

#### Worked example

**Body:** With a 900,000 annual benefit, 12,000 a month in extra legacy cost, a 1.5 million proposal and 4 percent drift, a six month delay costs 450,000 in deferred benefit, 72,000 in legacy cost and 30,000 in drift. The total is 552,000, or 92,000 per month. If another demo round adds a month but meaningfully lowers risk, it may be worth it. Three more rounds probably are not.

#### Common mistakes

**Body:** Do not use the benefit figure from the vendor's slide deck without haircutting it. Do not count the whole deferred benefit as a loss if the project would also have been slower to ramp up. And do not treat delay as always bad: a rushed selection with weak requirements is a larger risk. Use the output to set a decision deadline and a clear list of what must be answered before it.

**Bullets:**

- Use a conservative benefit
- Separate cash cost from timing cost
- Set a dated decision gate

**Cta:** If your selection is stuck and you want an outside view of what is still open, we can help structure the remaining questions. The calculator works fine on its own.

**Faq:**

#### Is deferred benefit a real loss?

**Answer:** It is a timing loss. The benefit starts later, so you give up the months of savings you would have had. It matters for payback and cash flow even though the annual run rate at steady state is unchanged.

#### How do I estimate the legacy extra cost?

**Answer:** Look at workarounds, spreadsheet time, extended vendor support, custom patches and paid contractors who keep the old system running. Ask finance and IT for the last twelve months and take the portion that stops at cutover.

#### Should I always avoid delay?

**Answer:** No. If open questions could change the decision, resolving them is worth the delay. This tool helps judge whether the cost of waiting exceeds the value of the answers.

#### Does the vendor quote really drift?

**Answer:** Often quotes carry an expiry date, and discounts tied to quarter end disappear. Rate cards also change. The percent is your own estimate, so set it to zero if your quote is firm.

## Search terms

cost of delaying erp implementation, erp delay cost calculator, erp decision delay, legacy erp cost of waiting, erp business case delay, erp selection taking too long

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