1. SAP R/3 Budget

2. SAP R/3 Costs Hardware Software Add-on software and hardware
Implementation process
Training of operators
Maintaining the system
Opportunity costs of system failure
System upgrade

3. Cost of Hardware
Basic workstation Dell Dimension 2400 Series: $618 per unit (Bulk sales negotiated)
Quality and Development Server Dell PowerEdge 1600SC: $6,862 per unit
Production Server PowerEdge1600SC: $10,799 per unit
Training Server Dell PowerEdge 1600SC: $6,862 per unit

4. Cost of SAP R/3 Software SAP cost fluctuates; approx. $1.5 million.
Cost includes client-side and server-side software, backup software, operating system, test and development tools.
Modules can be customized; selected modules are pertinent to business functions

5. SAP Modules NECESSARY Financial Accounting
Human Resources-Personnel Admin.
Materials Management
Sales and Distribution
FOR IN-HOUSE PRODUCTION
Production Planning
Quality Management
General Logistics
Plant Management
Add more research and development modules.

6. Cost of Add-On Software and Hardware
Backup executive file for Windows servers Veritas ver. 9.0: $
Backup Storage Area Network OptionBrightStor ARCserve ver. 9: $
HARDWARE
Storage controller Adaptec SCSI RAID 2100s: $ each
Interface ConverterIBM SAN Data Gateway Router 2108 Model R03: $6000
Networking Cable Belkin Pro Series: $40 per 100 ft.
Router D-Link DI-604: $60
Barcode ScannerWasp WLP 4170: $

7. Cost of Implementation
In one year, hiring a consultant would be beneficial to both the implementation and training phases of SAP.
Wage runs at about $900 daily, multiplied by work days
Total wage $180,000

8. Cost of Training of Operators
Consultant outlined in “Cost of Implementation” may assist in the operating training for SAP.
Other useful resources include:
RWD Performance Pak Course Books$2,520
RWD SAP 4.6 Navigation Course$8,280
RWD SAP 4.6 ESS Course$10,320
RWD SAP 4.6 ESS Course Customization$32,500
RWD Info Pak Training$1,380
Total Training Materials $55,000

9. Cost of Maintaining the System
ANNUAL COST
Cost determined by but not restricted to the follow factors:
Customer Support
Debugging and anti-virus software
Replacement materials
17% of hardware and software costs (17% of $1,567,678$266,505.26)

10. Lost Opportunity Costs
Gauging cost is difficult and sometimes inaccurate.
Solution: set money aside (amount still to be negotiated with size of R/3 system) for possible system failure
Scenarios to consider:
General Ledger application crashes
Infrastructure collapses
Productivity services become unavailable

11. Periodical System Upgrade
The typical upgrade for SAP would be approx. $3.1 million.
This number can decrease, however, with the number of modules on the company’s system.
The ImageFX Upgrade cost, based upon the number of end users and modules, should approximate to about $600,000.
Upgrade is not an immediate expense, but should be included in the budget for future reference.

12. Other Operational Costs
Working Space
Needed work space: 1500 square feet
Includes space for:
Cubicles for ten employees with extra space for potential expansion
Conference area
Office space for SAP and IT Directors
Traffic and egress
At (about) $35 per square foot, total annual cost for operating the SAP/IT department accumulates to $52,500.

13. Other Operational Costs (cont.)
Costs for other office expenses per employee (in a cubicle)= ≈ $1100 ($11,000 total)
Costs for each office= ≈ $4000 ($8000 total)
Costs for conference room= ≈ $5000

14. Final Budget Cost of Hardware $55,226 Cost of SAP Software
≈ $1,500,000
Cost of Add-Ons
≈ $12,452
Cost of Implementation
≈ $180,000
Cost of Training
$55,000
Cost of Maintenance
≈ $266,505.26
Lost Opportunity Costs
TBA
Cost of Upgrade
≈ $600,000
Operating Expenses
≈ $76,500
GRAND TOTAL
$2,705,683.26