CAL Business Solutions Team
CAL Business Solutions
 
 

Beyond Software: How to Estimate the Cost of ERP Implementation Services

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Description ImageBy CAL Business Solutions

This white paper outlines:

  • The 4 costs involved in ERP software projects
  • A definition of what is included in “implementation services”
  • Guidelines for calculating a ballpark cost
  • 8 factors that can increase your total price
  • A comparison of Time & Materials versus Fixed  Fee pricing model

Part 1:  “I Need New ERP Software-Now What?”

The Search Begins

There are many reasons companies begin the search for new accounting/ERP software. Perhaps you have outgrown an entry level package like QuickBooks, or your proprietary system is no longer supported. It could be that your existing software doesn’t integrate with your other systems and you are drowning in double entry. Whatever the reason, the first question you will likely ask when researching options to replace your existing system is, “How much will it cost?”

The Four Costs of a Complete ERP Project

  • Software
  • Maintenance Fees
  • Hardware/Infrastructure
  • Implementation Services

Part 2:  “What Am I Really Paying For?”

Implementation Services Defined

The term “implementation services” can seem vague, especially if this is your first ERP software project. The list below provides an overview of services that are generally included in this category:

  • Requirements Analysis/Definition of Scope
  • Installation
  • Configuration
  • Integration
  • Data Migration or Conversion
  • Customization
  • Reporting
  • Testing
  • Training
  • Documentation
  • Project Management

Part 3:  “How Do I Determine a Ballpark ERP Project Budget?”

Answer these 8 questions to better determine your anticipated software to services ratio:

  1. How many users will you have?
  2. How much time can your staff dedicate to the implemetation?
  3. How much customization or  reconfiguration of the software will you need?
  4. Are you implementing core financial software only?
  5. Does your company require distribution or supply chain management?
  6. Can you supply (or list) all the reports and documents you needthe system to produce?
  7. How much data conversion or migration will you need, andwho will perform this work?
  8. How much training will your staff require?

Part4:  “Is There Such a Thing as a ‘Guaranteed Price’?”

There are two methods of pricing software implementations:

“Time and Materials” and “Fixed Fee”.

  • Fixed Fee Pricing: The Truth Behind the “Guarantee”
  • Time and Materials Pricing: Pay Only for What You Use

Includes a Sample Estimate For Services

DOWNLOAD WHITE PAPER