ERP TCO

Total Cost of Ownership

Do y
your homework
before embarking on to
the ERP journey
TCO of ERP 1 Prof. Zaveri
Why budgeting for ERP
project?
„ Prevent ERP failures
f l during
d ERP implementation
l
by allocating enough budget for the ERP project.
„ Once the journey starts there is no option but to
go ahead.
„ Required finance should not become constraint
to the ERP project.
„ ERP implementation is a ‘one way’ street.

TCO of ERP
2 Prof. Zaveri
Budgeting for ERP project

„ Investment in computer hardware,

system software, ERP licenses,
networking components
components, etc etc., are
required.
„ The following slides lists the items that
you need to budget before embarking on
to the ERP project.
p j

TCO of ERP
3 Prof. Zaveri
TCO for ERP. Total Cost of Ownership

„ TCO off ERP project is b

basedd on allll off the
h
following, and not only on the cost of the ERP
software.
„ Use this checklist to ensure that ERP
implementation does not experience any
h dl
hurdles.

TCO of ERP
4 Prof. Zaveri
TCO of ERP package is based on
all of the following,
following and not only
the cost of the ERP software.
1. Computer
C t S Server.
2. Network: (a) LAN components such as Switch
router, LAN Cables, routers for wireless LAN, etc.
(b) In case multi
multi-location
location units consider cost of
fixed (static) I. P. address (from ISP)
3. Computer used by users (called Client PC) as
many y required
q as many y users are expected
p to be
online.

TCO of ERP
5 Prof. Zaveri
 4. Licensed software: Most management
g convenientlyy
thinks that the same is free.

One has to plan carefully and phase out the pirated versions ASAP [if any]
any].
„ a. Sever Operating System: Microsoft Windows 200x Server OS with
minimum five user licenses
„ and more depending on the concurrent number of users.
„ b. Operating System on nodes (client PCs). Microsoft Windows XP or MS
Win2KP (but not Windows 98, please).
„ As many copies required as many computers. Usually this comes preinstalled with the PC (as OEM copy).

„ c. Database or RDBMS software – Microsoft SQL 2000 Server with

adequate number of concurrent users.
„ d. MS Office (MS Excel spreadsheet software). As many copies are
required as many number of user who would require using MS Excel.
Excel
„ e. Antivirus software on each node and Server version for the ERP Server.
„ This needs to be updated from the website regularly.

„ f. Firewall software

TCO of ERP
6 Prof. Zaveri
Additional budget required for…
for

5. UPS or Generator set

6. Peripherals such as Dot Matrix Printer,
Inkjet or Laser Jet Printers,
Printers Modem,
Modem etc.
etc
7. ERP software package itself.
p
8. Implementation cost p
paid to
implementing professionals
9. Consumables such as, CD for backup,
toner cartridges,
cartridges paper
paper, etc.
etc

TCO of ERP
7 Prof. Zaveri
 Also plan for the following….

10. Consultant fees. E.g., invite ISO

Consultants Excise consultants,
Consultants, consultants Involve
auditors. This may include training.
11. Customization Charges.
g
12. Annual Maintenance charges to be paid
after the CRP run on ERP software to
software vendor.
vendor
13. Annual Maintenance charges to be paid
to hardware vendor.

TCO of ERP
8 Prof. Zaveri
 THANK YOU

PRESENTATION BY
P f JYOTINDRA ZAVERI
Prof.
ERP Consultant

Additional training material

Main portal http://www.dnserp.com

Training Blog http://dnserp.wordpress.com

Movie channel http://www
http://www.youtube.com/dnserp
youtube com/dnserp
Presentations http://www.scribd.com/eLesson
Follow us on Twitter http://twitter.com/followERP

E
Email
il jj.zaveri@dnserp.com
i@d

TCO of ERP 9 Prof. Zaveri