The Real costs of ERP Systems

Slide 2 Selection Criteria Aberdeen survey of 1,680 companies Functionality (74%) Total costs of ownership (52%) Ease of use (45%)

Slide 3 Where does cost come from? Total cost of ownership The cost of the software itself Varies based on the number of users The cost for service contracts (10-20%) of the software cost Implementation, training, maintenance, customization costs Consultants All of this leads to an ROI calculation

Slide 4 Average Costs By Company Size (Aberdeen Group 2007)

Slide 5 Average Costs By Company Size (Aberdeen Group 2007) As expected Total software costs increase based on the total number of users Total service costs increase comparably Annual maintenance costs run 15% - 17% of total costs The costs of maintenance does not grow linearly as company size grows

Slide 6 Average Cost Per User (Aberdeen Group 2007)

Slide 7 Average Cost Per User (Aberdeen Group 2007) As expected Per user costs go down for larger companies due to volume discounts (more than 200 users) Larger companies implement more modules thereby increasing costs though Service costs increase for larger companies because of more complex implementations

Slide 8 Average Size Implementations

Slide 9 Average Size Implementations SAP and ORACLE by far have the larger implementations Number of users Number of modules The other systems are designed and marketed to smaller companies

Slide 10 Software Costs by Vendor

Slide 11 Software Costs by Vendor SAP and ORACLE are the most expensive Other vendors have similar cost experiences

Slide 12 Software and Service Costs by Vendor

Slide 13 Software and Service Costs by Vendor These are external professional services So you can see that consultants play a big role in this

Slide 14 Total Costs by Vendor

Slide 15 Total Costs by Vendor These are total costs per seat

Slide 16 Benefits

Slide 17 References r-whitepaper-cost%20of%20ERP.pdf r-whitepaper-cost%20of%20ERP.pdf