The average cost for a three-year SAP deployment is $10m, with consulting accounting for $3.6m, personnel soaking up $2.5m, software licenses another $2m, and related hardware and training costs picking up the rest of the tab. Companies surveyed saw some benefits from workers being able to manipulate data more quickly with SAP products and better company-wide access to information. “However, a positive return on the SAP investment was achieved only when there was both a sufficient number of users and sufficient frequency of use (breadth and repeatability) to reap significant productivity based gains from the solution,”
The key question is, is it really worth the investment for a small company? I would say, it depends why we are implementing SAP. SAP solution is a big Beast and if a small company is only going to use a fraction of the actual SAP functionality and never plans to use the remaining functionality then I agree that it is not required to implement SAP.
I have seen few clients, which are only using a small module of SAP and then complaining that SAP does not yield ROI. Come on, that is ridiculous, use the software in totality and then see the benefits. SAP is the only ERP software available in the market with so much of integrated functionality for all the industry verticals. I have worked for one company in past which invested over 100 million dollars in SAP implementation in a big bang approach and the ROI was within couple of years, meaning that company made more than 100 million dollars in profit within couple of years. I think the biggest thing is not how much we invest in SAP implementation but how we do it. Just hiring big companies like Accenture and IBM to do the job will not ensure success. There have been so many failed SAP projects by these companies, but yes there are a few success stories also by these companies else they wouldn’t be in business.
Posted under Project Management Interview Questions, SAP, SAP IS Retail, SAP NetWeaver, Software development
This post was written by techhair on July 14, 2008