SAP R/3 Budget

SAP R/3 Costs

Hardware Software Add-on software and hardware Implementation process Training of operators Maintaining the system Opportunity costs of system failure System upgrade

Cost of Hardware

Basic workstation Dell Dimension 2400 Series: $618 per unit (Bulk sales negotiated)

Quality and Development Server Dell PowerEdge 1600SC: $6,862 per unit

Production Server PowerEdge1600SC: $10,799 per unit

Training Server Dell PowerEdge 1600SC: $6,862 per unit

Cost of SAP R/3 Software

SAP cost fluctuates; approx. $1.5 million. Cost includes client-side and server-side

software, backup software, operating system, test and development tools.

Modules can be customized; selected modules are pertinent to business functions

SAP Modules

NECESSARY Financial Accounting Human Resources-

Personnel Admin. Materials

Management Sales and

Distribution

FOR IN-HOUSE PRODUCTION

Production Planning Quality Management General Logistics Plant Management

Cost of Add-On Software and Hardware

SOFTWARE Backup executive file for

Windows servers Veritas ver. 9.0: $300-500

Backup Storage Area Network OptionBrightStor ARCserve ver. 9: $1000-1600

HARDWARE Storage controller Adaptec

SCSI RAID 2100s: $388-445 each

Interface ConverterIBM SAN Data Gateway Router 2108 Model R03: $6000

Networking Cable Belkin Pro Series: $40 per 100 ft.

Router D-Link DI-604: $60 Barcode ScannerWasp

WLP 4170: $250-300.

Cost of Implementation

In one year, hiring a consultant would be beneficial to both the implementation and

training phases of SAP.

Wage runs at about $900 daily, multiplied by 200 work days

Total wage $180,000

Cost of Training of Operators

Consultant outlined in “Cost of Implementation” may assist in the operating training for SAP.

Other useful resources include:

RWD Performance Pak Course Books$2,520

RWD SAP 4.6 Navigation Course$8,280

RWD SAP 4.6 ESS Course$10,320

RWD SAP 4.6 ESS Course Customization$32,500

RWD Info Pak Training$1,380

Total Training Materials $55,000

Cost of Maintaining the System

ANNUAL COST Cost determined by but not restricted to

the follow factors: Customer Support Debugging and anti-virus software Replacement materials

17% of hardware and software costs (17% of $1,567,678$266,505.26)

Lost Opportunity Costs

Gauging cost is difficult and sometimes inaccurate.

Solution: set money aside (amount still to be negotiated with size of R/3 system) for possible system failure

Scenarios to consider: General Ledger application crashes Infrastructure collapses Productivity services become unavailable

Periodical System Upgrade

The typical upgrade for SAP would be approx. $3.1 million.

This number can decrease, however, with the number of modules on the company’s system.

The ImageFX Upgrade cost, based upon the number of end users and modules, should approximate to about $600,000.

Upgrade is not an immediate expense, but should be included in the budget for future reference.

Other Operational Costs

Working Space Needed work space: 1500 square feet Includes space for:

Cubicles for ten employees with extra space for potential expansion

Conference area Office space for SAP and IT Directors Traffic and egress At (about) $35 per square foot, total annual cost for

operating the SAP/IT department accumulates to $52,500.

Other Operational Costs (cont.)

Costs for other office expenses per employee (in a cubicle)= ≈ $1100 ($11,000 total)

Costs for each office= ≈ $4000 ($8000 total)

Costs for conference room= ≈ $5000

Final Budget

Cost of Hardware $55,226

Cost of SAP Software ≈ $1,500,000

Cost of Add-Ons ≈ $12,452

Cost of Implementation ≈ $180,000

Cost of Training $55,000

Cost of Maintenance ≈ $266,505.26

Lost Opportunity Costs TBA

Cost of Upgrade ≈ $600,000

Operating Expenses ≈ $76,500

GRAND TOTAL $2,705,683.26