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Hidden ERP Implementation Costs - Exposed

Hidden ERP Implementation Costs – Exposed

Many within the ERP industry tend to focus on the somewhat comical number of ERP project failures. I suppose I am guilty of this as well. But, at least I will admit that many so-called “failures,” were really nothing more than a failure to manage expectations in the areas of benefits and costs.

From the perspective of sr. management, often the biggest unpleasant surprise is the actual implementation costs. Benefit expectations are one thing, but huge cost over-runs usually take center stage from their viewpoint. Therefore, developing solid cost estimates early on is an important part of the ERP Project Manager’s survival guide.

Potential ERP Implementation Budget Items

Many also state that a primary reason for cost-overruns is not understanding the hidden costs of implementation or on-going support. Well, these costs are not really hiding, you just need to know where to look!

Download Top 20 ERP Report

The following is a list of potential budget items. Whether the plan is to host the ERP system internally or use Software-as-a-Service, you will pay something for many of the items below, one way or another.

Education and Training

  • Sr. Management ERP Education
  • Industry Practices Education
  • Project Team ERP Software Training
  • IT Systems Admin Training
  • IT Application Development Training
  • Implementation Tools Training
  • End-User ERP Software Training

 

Application Software

  • ERP Software Package
  • Bolt-on Applications

 

Systems Hardware

  • ERP Servers
  • Bolt-on Application Servers
  • Internal Network Upgrades
  • Telecom Service Upgrades
  • PC’s
  • Tablets / Mobile Devices
  • Data Collection Devices
  • Printers
  • Storage Access Network (SAN)

 

Systems Software

  • Operating Systems
  • Data Base Software
  • Web Services Software
  • Client / PC Software
  • Middleware / Integration Products
  • EDI Software
  • Forms / PDF Management
  • Job Scheduler (Batch Programs)
  • Data Back-Up / Recovery

 

Implementation Tools

  • Application Development Tools
  • ERP Application Set-Up Tools
  • 3rd Party Application Development Tools
  • 3rd Party Report Writers/Data Query Tools
  • Project Scheduling Software
  • Process Mapping Software
  • Other Implementation Tools

Consulting

  • ERP Readiness Assessment
  • Software Selection
  • Change Management
  • Industry Practices / Process Redesign
  • Project Management
  • Application Consulting
  • ERP Software Technical
  • Bolt-on Applications Consulting
  • Systems Software Technical
  • Go-Live Readiness Assessment

 

Software Development

  • Data Conversions
  • Interfaces
  • Software Modifications
  • Reports

 

Additional Employees or Staffing

  • Project Team
  • IT Department
  • Temporary Staffing (backfill, load data, etc)

 

Other ERP Implementation Project Costs

  • Project / Training Facilities and Equipment
  • Travel and Living Expenses (Team and Consultants)
  • Project Team Incentive Bonuses
  • Hardware Shipping Cost
  • Sales Tax
  • Contingency Factor

 

On-Going Support Costs

  • ERP Software Maintenance
  • All other Software Maintenance
  • All Hardware / Equipment Maintenance
  • Training: Job Changes / New Employees
  • Outsourced IT Infrastructure Fees
  • ERP Software-as-a-Service Fees
  • Software Upgrades
  • Hardware Upgrades

Did I miss something?

Want more on ERP Software? Discover and learn more about software by exploring blog posts, whitepapers and more on our ERP resource page. For comparisons of the best ERP software, download Business-Software.com’s Top 20 ERP Software report.

  • Consultant

Steven Phillips

CIO & Author of the book: Control Your ERP Destiny, Street Smart ERP Publications
Steve is an ERP professional with over twenty-seven years of implementation experience both as an industry practitioner and consultant. This extensive background is coupled with functional experience in operations management, IT management, and business reengineering. ERP skills include sr. management education, ...