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 Cost of Hardware:
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 Cost of Software:
SAP R/3 software is patented and needs to be bought from SAP AG, Germany.
Cost of Add-on SAP R/3 Hardware & Software
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.
Cost of SAP R/3 implementation process:
This cost consists of
Cost of expert help.
Cost of own resources to work with experts
Training of personnel
System testing
Documentation
Loss of opportunity (production/services) during go-live period
Cost of SAP R/3 training:
Though this cost is high during go-live period, it is on-going cost.
Cost of SAP R/3 maintenance:
The system has to be maintained for any bugs/additional requirements. Trained personal must available for the maintenance.
Lost opportunity cost due to failure of the SAP R/3 system
Being an integrated system, the downtime of the system can prove very expensive. Proper maintenance is required to keep up-time high.
Cost of periodical upgrading of the SAP R/3 system:
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.
