TCO of SAP IBP vs Lokad, November 2025

By Léon Levinas-Ménard
Last modified: November 18th, 2025

Legal & methodological disclaimers (read first)

This page is an illustrative modeling exercise for a hypothetical company (“Fabrikam”). It is not a quote, offer, guarantee, or statement about any vendor’s actual pricing, licensing, or performance. All dollar figures are assumptions used to build scenarios. SAP, SAP IBP, SAP Integration Suite, and SAP Analytics Cloud are trademarks of SAP SE. Use here is nominative and for comparison/analysis only. Where public pages are cited, they support factual context only (e.g., licensing metrics, product scope). Eligibility, inclusion, and prices vary by contract, region, and time—obtain current quotes from SAP and partners. Similarly, Lokad amounts used here are inputs for modeling, not commitments.

Context. Fabrikam is a hypothetical light-manufacturing firm headquartered in Texas with ~$1.0B revenue. This study estimates the all-in total cost of ownership (TCO) for two planning approaches—SAP IBP and Lokad—under optimistic, typical, and pessimistic scenarios. The analysis emphasizes that non-license overhead (integration, services, internal labor, change-management, and ongoing run-rate) can dominate the true TCO and must be assessed as carefully as vendor list prices. Evidence is provided in the footnotes.

At-a-Glance: Side-by-Side TCO for Fabrikam (USD)

Scenario Metric SAP IBP Lokad
Optimistic Year-1 TCO (implementation year) $3.12M $1.3736M
Run-rate TCO (Yr2+) per year $1.64M/yr $0.6477M/yr
5-year nominal TCO $9.68M $3.9645M
Typical Year-1 TCO (implementation year) $4.02M $1.6418M
Run-rate TCO (Yr2+) per year $1.89M/yr $1.0641M/yr
5-year nominal TCO $11.59M $5.8983M
Pessimistic Year-1 TCO (implementation year) $5.01M $1.9100M
Run-rate TCO (Yr2+) per year $2.20M/yr $1.4805M/yr
5-year nominal TCO $13.82M $7.8321M

What drives the gap? Under SAP IBP, external services, integration tooling, optional analytics, training, and AMS may stack onto the subscription and remain material over time; internal labor (planning, integration, and executive cycles) can persist. With Lokad, a flat subscription (no per-user metering) bundles hosting and specialist services, reducing the need for SIs/AMS and enabling planning FTE reductions via decision automation; the remaining overhead is mostly internal oversight, data feeds, and governance. 1

Key takeaway: For Fabrikam, overhead beyond the vendor’s fees often drives the real TCO—the winning approach is the one that minimizes external services and internal effort per unit of supply-chain value delivered. 1

Assumptions About Fabrikam

  • Business & footprint. $1.0B revenue; 3 plants, 2 DCs; ~7k SKUs; single SAP ERP core (ECC or S/4HANA).
  • Planning scope. Demand, S&OP, Response & Supply, Inventory; no order-based ATP.
  • Timeline. Narrow “accelerator” scopes can target ~90 days to go-live; broader multi-module programs typically span several months, followed by weeks to a few months of hypercare. 23
  • Users & tooling (SAP IBP). Planners commonly use the Microsoft Excel add-in, with a web UI also available. IBP landscapes typically include Test + Production tenants; additional tenants are optional. 45
  • Licensing metric (SAP IBP). SAP IBP is billed by cost of goods per year in defined blocks of 350,000,000 COGS/yr on SAP regional pricing pages (actual prices are via quote). 6
  • Integration (SAP IBP). SAP Cloud Integration for data services (CI-DS) is widely used for periodic/time-series data exchange with IBP; event/API patterns often use SAP Integration Suite. Entitlements and eligibility vary by contract. 78
  • Optional analytics (SAP). Some programs add SAP Analytics Cloud (BI) for dashboards; public trackers list starting around ~$36/user/month for BI/Business plans (indicative; verify with SAP). 9
  • Comp & benefits. Internal labor uses Texas salary anchors with BLS ECEC for benefits (private-industry benefits ≈ ~29.7% of total compensation). 10
  • Lokad operating model. Flat subscription with unlimited users; hosting & updates included; Supply Chain Scientists deliver implementation and steady-state run-ops; integration is file-based (SFTP/FTPS CSV/TSV/Excel extracts from ERP). 11121314

Methodology Overview

  • External spend: vendor subscriptions + paid platform components + systems integrator (SI) / consulting + enablement/training + hypercare/AMS.
  • Internal spend: planners, admin/integration roles, data engineering, S&OP lead, and executive time for governance.
  • Time buckets: Year-1 implementation (including partial year of AMS and internal involvement) and run-rate Years 2+; roll-up to a 5-year nominal TCO.
  • Numbers below follow the two solution-specific cost stacks and a shared staffing baseline.

Detailed Build-Up — SAP IBP

1) What SAP may bill directly

  • IBP subscription (SaaS on HANA). Licensing is measured by COGS blocks (e.g., “350,000,000 cost of goods per year” on SAP regional pages). List prices are not posted; customers obtain quotes via SAP/partners. 6
  • Excel add-in is a common planner UI; installation is documented by SAP. 4
  • Landscape & identity. Standard landscapes commonly include one Test + one Production tenant; extra test tenants are optional. 5
  • Integration Suite (BTP). For APIs/real-time and non-IBP integrations, programs often license SAP Integration Suite. Actual contracts may differ. 8
  • SAP Analytics Cloud (BI). Public trackers indicate ~$36/user/month starting points for BI/Business plans; verify with SAP. 9

2) Outside-of-SAP services and enablement

  • System integrator/consulting. Enterprise application programs typically rely on partner consulting; U.S. enterprise application projects commonly staff senior consultants near $175–$225/hr, with higher rates for elite roles. 15
  • Implementation cadence & hypercare. Partners describe accelerators targeting ~90 days for focused scopes; multi-module deployments often take months and are followed by hypercare. 23
  • Training. Teams frequently purchase SAP Learning Hub seats (pricing is published “upon request” by SAP; historically offered as per-user annual subscriptions). 16

3) Internal operating costs

  • Planners & managers. Baseline planner staffing with benefits loaded per BLS ECEC. Texas planner salaries vary across sources and seniority. 1017
  • Admin/integration & data engineering. Partial/dedicated FTEs support IBP data flows and housekeeping.
  • Executive bandwidth. CFO/COO participation in S&OP (meetings + prep) is valued using Texas benchmarks. 18

4) Results used in this study (SAP IBP)

  • Optimistic: Year-1 $3.12M, Run-rate $1.64M/yr, 5-yr $9.68M
  • Typical: Year-1 $4.02M, Run-rate $1.89M/yr, 5-yr $11.59M
  • Pessimistic: Year-1 $5.01M, Run-rate $2.20M/yr, 5-yr $13.82M

Notes. In all scenarios, the external stack (IBP + Integration Suite + SAC + SI + enablement + hypercare/AMS) is substantial relative to the subscription, and the internal stack (planners, admin/integration, S&OP lead, executives) remains meaningful in steady state. Market data broadly supports that services and software together dominate enterprise IT spend. 1

Detailed Build-Up — Lokad

1) What Lokad bills directly

  • Flat monthly subscription (no per-user metering) that bundles platform + hosting + updates + expert services (Lokad’s Supply Chain Scientists). Lokad accounts have no limit on users. 11121319
  • Integration approach. File-based ingestion (CSV/TSV/Excel) over SFTP/FTPS with ERP-side extracts. 1114
  • Operating model. Lokad’s SCS team runs the initiative end-to-end and maintains a Joint Procedure Manual (JPM) for continuity and governance. 1220
  • Decision automation. Emphasis on automating routine planning decisions (e.g., replenishment, production orders, allocations). 21

Subscription levels used for Fabrikam modeling: $30k / $40k / $50k per month [†] paired respectively with 90% / 70% / 50% planning-FTE reductions in steady state.

2) Internal operating costs under Lokad

  • Planning FTE reduction applies to the same baseline planner payroll used for IBP.
  • Admin/integration & data engineering remain as partial FTEs to run file pushes and housekeeping.
  • S&OP lead & executive time retained for governance and decision rights.
  • Training/change management load is modest due to SCS ownership and the JPM. 1220

3) Results used in this study (Lokad)

  • Optimistic (90% FTE reduction; $30k/mo): Year-1 $1.3736M, Run-rate $0.6477M/yr, 5-yr $3.9645M
  • Typical (70% FTE reduction; $40k/mo): Year-1 $1.6418M, Run-rate $1.0641M/yr, 5-yr $5.8983M
  • Pessimistic (50% FTE reduction; $50k/mo): Year-1 $1.9100M, Run-rate $1.4805M/yr, 5-yr $7.8321M

Notes. The amplification from vendor fee to all-in TCO is lower than with IBP because the subscription already includes hosting, updates, implementation, and ongoing expert support, and because user counts do not drive cost. The remaining overhead centers on internal oversight and data plumbing. 11121314

Why Overhead Often Dominates TCO (What to Inspect)

  1. Integration choices drive services. IBP programs that rely on Integration Suite for non-IBP/API patterns incur a recurring platform charge; Lokad’s SFTP/FTPS flat-file approach typically avoids third-party integration tooling. 814
  2. Analytics add-ons can multiply seats. IBP programs that add SAC BI face per-user costs; Lokad dashboards are included in the subscription. 91119
  3. Consulting scales with scope. Implementation, hypercare, AMS, and enhancements consume ongoing services; public benchmarks show enterprise application consulting frequently >$175/hr for experienced roles. 15
  4. People matter more than software. Even with SaaS, internal planner time + leadership time are persistent cost centers. Benefits are a material share of compensation in U.S. private industry and should be loaded accordingly. 10

Sensitivities & What-Ifs

  • If Fabrikam skips SAC under IBP, subtract the assumed viewer seats (e.g., ~50 × $36 × 12 ≈ $21.6k/yr, if applicable to your plan). 9
  • If Integration Suite is already licensed enterprise-wide, the IBP-specific increment may decline; if real-time/API patterns expand, it can grow. 8
  • If Lokad’s automation target is lower/higher than the 50–90% band, adjust steady-state planner payroll proportionally; the subscription is not user-metered. 1319
  • Timelines and scope. Narrower initial scope can shorten the Year-1 services spike for IBP; Lokad time-to-first-production also compresses with narrower deliverables. 2

Decision Checklist for Fabrikam’s Leadership

  • Quantify internal labor, not just licenses. Load benefits (~30%) on Texas salaries and allocate planner/S&OP/admin time realistically over Year-1 and steady state. 10
  • Pin down integration patterns early. For IBP, confirm whether CI-DS suffices for periodic loads or whether Integration Suite is required for APIs/real-time and non-IBP workloads. For Lokad, confirm SFTP/FTPS availability and ERP extract cadence. 7814
  • Avoid per-seat surprises. If IBP adds SAC, estimate viewer seats; Lokad has no per-user fees. 91319
  • Demand ownership clarity. Who implements, who runs, who documents? IBP paths usually involve an SI + AMS; Lokad centralizes through Supply Chain Scientists and the JPM. 1220

Limitations

  • SAP list prices for IBP modules are not publicly posted; this study models plausible bands informed by public documentation and common practice. 689
  • Lokad subscription dollars used here are scenario inputs (see [†]) reflecting one realistic size/complexity profile.
  • Salary and services rates vary; Fabrikam should use its own payroll and vendor quotes for budgeting.

Footnotes

[†] Modeling inputs only. The $30k/$40k/$50k per-month figures are illustrative subscription levels chosen to size scenarios for a $1B manufacturer; they are not a quote or commitment from Lokad. Actual subscriptions depend on scope/complexity and are contracted separately.

  1. SAP Analytics Cloud Pricing ↩︎ ↩︎ ↩︎

  2. Mastering SAP — How to Implement SAP IBP (90-day accelerators; best practices). ↩︎ ↩︎ ↩︎

  3. Innovyne — Post-implementation activities / Hypercare (typical duration). ↩︎ ↩︎

  4. SAP Help — Installing the SAP IBP add-in for Microsoft Excel. ↩︎ ↩︎

  5. SAP Community — IBP landscape options; transports and tenant copy. ↩︎ ↩︎

  6. SAP — Integrated Business Planning pricing metric (COGS blocks) (example regional page). ↩︎ ↩︎ ↩︎

  7. SAP Community — CI-DS usage with IBP; inclusion with IBP scenarios. ↩︎ ↩︎

  8. NoelDCosta — SAP Implementation Cost Breakdown (Integration Suite context). ↩︎ ↩︎ ↩︎ ↩︎ ↩︎ ↩︎

  9. TrustRadius — SAP Analytics Cloud Pricing (~$36/user/month for BI; indicative). ↩︎ ↩︎ ↩︎ ↩︎ ↩︎ ↩︎

  10. U.S. BLS — Employer Costs for Employee Compensation (ECEC). ↩︎ ↩︎ ↩︎ ↩︎

  11. Lokad FAQ — Information Technology (IT) (flat monthly subscription bundling platform and services; SFTP/FTPS). ↩︎ ↩︎ ↩︎ ↩︎ ↩︎

  12. Lokad FAQ — Support Services (Supply Chain Scientists; Joint Procedure Manual). ↩︎ ↩︎ ↩︎ ↩︎ ↩︎ ↩︎

  13. Lokad Docs — User roles & permissions (no limit on users). ↩︎ ↩︎ ↩︎ ↩︎ ↩︎

  14. Lokad Docs — Files & connectivity (SFTP/FTPS; file-centric platform). ↩︎ ↩︎ ↩︎ ↩︎ ↩︎

  15. Spiceworks Community — Cost range SAP implementation consultants (market anecdote; $175–$225/hr baseline). ↩︎ ↩︎

  16. SAP — Learning Hub (subscription, price on request). ↩︎

  17. Salary.com — Supply Chain Planner Salary in Texas. ↩︎

  18. Salary.com — CFO salary in Texas (range/average). ↩︎

  19. Lokad TV — Pricing Practices for Supply Chain Software (flat-fee rationale; qualitative). ↩︎ ↩︎ ↩︎ ↩︎

  20. Lokad FAQ — Change Management. ↩︎ ↩︎ ↩︎

  21. Lokad — AI Pilot for your Supply Chain (automation emphasis). ↩︎