Truth in Numbers

By Mark Kindley  |  Posted 10-01-2001
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Truth in Numbers

Typical Start-up Cost Structure for an Enterprise Resource Planning (ERP) Suite

Hardware $0.8 Million
  • Application, Web and database servers, including storage
Software $3.2 Million
  • ERP application suite license (HR, financials, distribution)
  • 1,000 regular trained users, 2,000 casual users
Implementation
and Deployment		 $16.5 Million
  • 9 months to complete pilot site, including process engineering, apps configuration and testing
  • 30 external consultants at $1,200 a day
  • 30 internal staffers at an average salary of $100,000
  • 3 additional external consultants at 9 sites for 3 months
  • 9 additional internal staffers at each site for 6 months
  • 5 days of user training at an average burdened user salary of $50,000
  • 3 full-time training staff at an average burdened salary of $100,000
Total Costs $20.5 Million
Ratio of Total
Start-up Costs
to IT Hardware Costs		 26:1

Note: These figures do not include management time selecting, designing and managing implementation, including the modification of business processes, nor does it include staff time informally learning to use the system or modifying business processes to work with the system. Source: Forrester Research Inc. and Brynjolfsson's calculations.

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