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SAP R/3 implementation involves the following costs
- SAP R/3 Cost of Hardware
- SAP R/3 Cost of software
- Cost of add-on software & hardware like bar-coding equipments for SAP R/3.
- Cost of SAP R/3 Implementation process
- Cost of Training of SAP R/3 operators
- Cost of maintaining the SAP R/3 system
- Lost opportunity costs due failure of the SAP R/3 system, if any.
- Cost of periodical upgrading of the SAP R/3 system
SAP R/3 requires servers as
well as personal computers for end-users. As it is a real time environment,
good network connection from end-users to the server is also necessary.
SAP R/3 software is patented and needs to be bought from SAP AG, Germany.
It may be necessary to use add-on hardware and software like barcode scanners to SAP. Some companies found few SAP processes (like MRP) unsuitable to their use and decided to go for other softwares available in the market for the process & integrated the softwares with SAP R/3.
This cost consists of
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Cost of expert help. |
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Cost of own resources to work with experts |
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Training of personnel |
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System testing |
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Documentation |
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Loss of opportunity (production/services) during go-live period |
Though this cost is high during go-live period, it is on-going cost.
The system has to be maintained for any bugs/additional requirements. Trained personal must available for the maintenance.
Being an integrated system, the downtime of the system can prove very expensive. Proper maintenance is required to keep up-time high.
SAP R/3 is a continuously evolving system. SAP is realizing new versions every few months. To get maximum benefit of SAP, the system must be upgraded periodically.