How to size a Funding Envelope at Stage 6 — before you have an SI.

The method

Three inputs, one multiplication

The Funding Envelope at Stage 6 is constructed from three inputs, all of which can be estimated without an SI on board:

• Total programme effort in days. Derived from programme size — small (<100 users, ~2,000 days), medium (100–1,000 users, ~4,500 days), large (1,000+ users, ~8,000 days). These are mid-points from comparable-programme reference data, not precision forecasts. If you're running ERP and CRM in parallel, add 25% to the base effort.
• Role-mix percentages. How the total effort distributes across the programme roles. This is the part most organisations skip — they estimate a total and divide it by a blended rate, producing a single number with no structural defence. Keystone's role-mix percentages are drawn from the canonical role catalogue and refined across thirty-plus programmes.
• Blended day-rates per tier. Three tiers — Senior (£1,100/day), Lead (£800/day), Specialist (£650/day) — reflecting current UK contract market rates for D365 programme delivery. Not bands; single numbers per tier, reviewed periodically.

The multiplication is straightforward. Total effort × role percentage = effort per role group. Effort per role group × day rate for that tier = cost per role group. Sum all role groups + 10% contingency = mid-point. Apply ±30–40% variance = Funding Envelope range for Board Gate 1.

Role-mix percentages

Where the effort goes

The role-mix percentages below map directly to the role catalogue on the Roles & governance page and the Command Centre Roles tab. Same role names everywhere — the groupings are the methodology's, not the calculator's invention.

Three things to note. First, Functional Consultants at 30% is the largest group by effort — and in practice it's the group that overruns most reliably, because scope complexity surfaces during build, not during estimation. Second, the Test team at 18% looks high to boards who haven't run an eight-level testing framework before; it's not high, it's realistic. Third, Change & Training at 5% looks low to change practitioners and high to delivery-focused programme managers — it's a compromise that reflects the typical allocation, not the ideal one.

Blended day-rates

Three tiers, not bands

Single numbers per tier, not ranges. The calculator offers a rate posture selector (Conservative −15%, Market, Premium +15%) for organisations whose procurement experience suggests the market sits above or below these mid-points. The rates are UK-specific, D365-weighted, and intended for senior programme delivery context — not junior resourcing, not offshore, not managed-service pricing.

Worked example

AcmeWidget Ltd — medium ERP programme

AcmeWidget Ltd is a fictional mid-market manufacturer with 600 users, running a single-pillar D365 Finance & Operations implementation. The Board has approved the Case for Change at Value Definition (S2) and is now at Funding Envelope & Benchmark Costs (S6), asking: "How much should we set aside?"

Parameters

• Programme size: Medium — 4,500 effort days (600 users, four functional workstreams: Finance, Procurement, Warehousing, Manufacturing)
• Pillars: ERP only
• Duration: 16 months
• Rate posture: Market
• Customisation: Moderate

Calculation

Apply ±30–40% variance:

• Low estimate: £4,019,400 × 0.625 = £2,512,125
• High estimate: £4,019,400 × 1.375 = £5,526,675

What AcmeWidget's Board hears

"We estimate £2.5m–£5.5m at ±30–40% variance, based on comparable-programme benchmarks and current market day-rates. This will be refined through SI ROM at Stage 9 and firmed at Full Business Case at Stage 12, where variance narrows to ±10–15%. The envelope is wide on purpose — we haven't selected an SI yet and the solution design hasn't started. What the Board is approving today is the envelope to proceed into market, not a final commitment."

That's a defensible position. The Board knows the number is wide, knows why, knows when it narrows, and knows what it's approving. The alternative — arriving at Gate 1 with a single number and no structural breakdown — invites the Board to treat the envelope as a final figure, which is the most reliably expensive mistake in ERP delivery.

What sits outside the envelope

Costs outside the calculator

The ±30–40% envelope covers the programme team and SI implementation only — the contracted delivery team running and building the programme. The calculator now also shows a clearly-separated indicative “wider programme costs” view for orientation. Those costs are not part of the envelope; they are refined at Software Selection (S8) and firmed in the Full Business Case at Solution Design & Full Business Case (S12):

• Software licensing. The calculator gives an indicative annual subscription range from per-user benchmark bands by platform (D365, SAP, Oracle, Workday) — illustrative list price only, to be verified with the vendor. Actual licensing is negotiated during Software Selection (S8) and confirmed as a Full Business Case line item at Solution Design & Full Business Case (S12).
• Indicative 5-year cost. The calculator also shows a single orientation figure — the implementation envelope plus five years of software subscription — explicitly excluding infrastructure and internal client cost. It is a headline for early board conversations, not a full total cost of ownership; the complete picture is built in the Full Business Case at Solution Design & Full Business Case (S12).
• CRM (dual-pillar) licences. When ERP + CRM is selected the software figure stays ERP-only — CRM adds its own user licences (e.g. D365 Customer Engagement), priced during Software Selection (S8).
• Infrastructure and environments. Azure / AWS hosting, environment provisioning, Lifecycle Services costs. Typically estimated separately, often by IT Operations alongside the Solution Architect.
• Indicative return (ROI). The calculator shows an illustrative ROI against the 5-year cost — the break-even annual benefit (derived from cost) plus an editable expected-benefit figure returning 5-year ROI, net and simple payback. Driven by your Benefits Map (S2), not the vendor's projected returns; firmed at the Full Business Case (S12).
• Client-side backfill. The cost of covering Process Owners, SMEs and other business roles seconded to the programme — a real cost, rarely budgeted, often the largest hidden expense. The calculator now gives an indicative estimate (internal FTE backfilled × rate × duration, defaulting to temp/contractor cover with a one-off recruitment alternative) — your assumption to refine, counting only materially-seconded roles.
• Third-party integration costs. Where integration partners charge for API access, development, or testing support.
• Travel and expenses. Material on multi-site programmes, particularly across regions.

All of these are addressed at the appropriate point in the lifecycle — most at Solution Design & Full Business Case (S12) when the Full Business Case is constructed. The Funding Envelope at Stage 6 sizes the programme team and SI implementation; the wider-costs view orients the board to what else to budget; the Full Business Case covers the whole picture firmly.