# ERP Total Cost of Ownership (TCO) Calculator

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

## Short answer

Estimate multi-year ERP cost including licences, services, maintenance, hosting and internal staff, and compare cost per user per year.

## Category

cost-finance

## Region

Europe

## Industry

Discrete Manufacturing

## Audience

- CFO
- CIO
- ERP selection lead

## Tool

**Kind:** calculator

**Currency:** EUR 

**Inputs:**

#### Named users

**Key:** users

**Type:** number

**Default:** 60

**Min:** 1

**Step:** 5

**Unit:** users

#### Licence per user (one-off)

**Key:** lic_user

**Type:** number

**Default:** 3200

**Min:** 0

**Step:** 100

**Unit:** EUR

**Help:** Use 0 if you are comparing subscription pricing and enter the annual fee below.

#### Subscription per user per year

**Key:** sub_user

**Type:** number

**Default:** 0

**Min:** 0

**Step:** 50

**Unit:** EUR

#### Implementation services

**Key:** impl

**Type:** number

**Default:** 380000

**Min:** 0

**Step:** 10000

**Unit:** EUR

#### Annual maintenance on licence

**Key:** maint

**Type:** slider

**Default:** 20

**Min:** 0

**Max:** 30

**Step:** 1

**Unit:** %

#### Hosting and infrastructure per year

**Key:** hosting

**Type:** number

**Default:** 24000

**Min:** 0

**Step:** 1000

**Unit:** EUR

#### Internal FTE to run the system

**Key:** fte

**Type:** number

**Default:** 1.5

**Min:** 0

**Step:** 0.5

**Unit:** FTE

#### Loaded cost per FTE per year

**Key:** fte_cost

**Type:** number

**Default:** 75000

**Min:** 0

**Step:** 1000

**Unit:** EUR

#### Evaluation period

**Key:** years

**Type:** slider

**Default:** 5

**Min:** 1

**Max:** 10

**Step:** 1

**Unit:** years

**Outputs:**

#### Licences (one-off)

**Key:** licence_total

**Expr:** users * lic_user

**Format:** currency

#### Subscriptions over period

**Key:** sub_total

**Expr:** users * sub_user * years

**Format:** currency

#### Maintenance over period

**Key:** maint_total

**Expr:** users * lic_user * maint / 100 * years

**Format:** currency

#### Hosting over period

**Key:** host_total

**Expr:** hosting * years

**Format:** currency

#### Internal staff over period

**Key:** staff_total

**Expr:** fte * fte_cost * years

**Format:** currency

#### Total cost of ownership

**Key:** total

**Expr:** licence_total + sub_total + maint_total + host_total + staff_total + impl

**Format:** currency

**Primary:** true

**Description:** All costs over the evaluation period, undiscounted.

#### Cost per user per year

**Key:** per_user_year

**Expr:** total / (users * years)

**Format:** currency

**Primary:** true

**Chart:**

#### Cumulative cost by evaluation period

**Type:** line

**X:** years

**From:** 1

**To:** 10

**Steps:** 10

**Series:**

- total

**Disclaimer:** Undiscounted, excludes VAT, price inflation, upgrade projects and business benefits. Use vendor quotes for real figures.

## Content

**Intro:** Licence price is rarely the biggest number in an ERP business case. Services, internal time, hosting and maintenance often exceed it over five years. This calculator puts those lines side by side so you can compare perpetual and subscription offers fairly.

**Sections:**

#### How to use it

**Body:** Enter the number of named users, then either a one-off licence per user with a maintenance percentage, or a subscription per user per year, or both if the vendor splits them. Add the implementation estimate from the vendor and partner, annual hosting cost and the internal staff you will need to administer the system. Move the evaluation slider to see how the picture changes between three, five and ten years.

**Bullets:**

- Count named users, not concurrent users, unless the vendor sells concurrent
- Use the quote for implementation, then add a contingency
- Include internal staff time, which is often missing from vendor numbers
- Compare vendors over the same period

#### The formulas

**Body:** Licences equal users multiplied by licence per user. Maintenance is that licence value times the maintenance percentage times the number of years, commonly 18 to 22 percent in the on-premise world. Subscriptions are users times annual fee times years. Hosting and internal staff are annual costs multiplied by years. The total adds implementation, and the cost per user per year divides the total by users and years.

#### Reading the result

**Body:** Perpetual licences look cheaper in year one and subscriptions look cheaper if the implementation is lean. The crossover usually sits between years four and seven, depending on maintenance rate. Look at the chart: a steep slope means recurring cost dominates, which suggests negotiating the annual fees, not the licence discount.

#### What this does not include

**Body:** Business benefits, discounting of future cash flows, inflation clauses in maintenance contracts, user growth, additional modules, customisation upkeep and upgrade projects are not included. For a full business case, add those lines in a spreadsheet and keep this as the cost baseline.

**Cta:** If you want help pressure-testing a vendor quote or sizing the hidden internal costs, we can review it with you. Optional.

**Faq:**

#### What maintenance percentage is typical?

**Answer:** On-premise ERP vendors commonly charge around 18 to 22 percent of the net licence price per year, often with annual indexation. Check the contract for how the increase is calculated, because it compounds over a ten-year horizon.

#### How do I compare SaaS and perpetual fairly?

**Answer:** Set the licence per user to zero for the SaaS case and enter the subscription fee, then use the same implementation, staffing and period for both. Include hosting for the on-premise case. Look at the total and at year-by-year cash flow.

#### Should I include internal staff?

**Answer:** Yes. The cost of key users, administrators and support people is real, even if it is not on an invoice. Cloud solutions may reduce infrastructure staffing but still need functional administrators and integration support.

#### How accurate is this?

**Answer:** It is as accurate as your inputs. It is useful for comparing alternatives on a like-for-like basis and for exposing cost lines that are missing from a quote, not for forecasting the exact amount you will pay.

## Search terms

erp tco calculator, erp total cost of ownership, erp cost calculator europe, erp licence cost comparison, erp business case calculator, erp cost per user

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