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.