SAP Implementation – How much will it cost your company?

Well, now you need SAP, your company yearns it but ‘What does it really take to implement it’? There are always those who just want to do something and those who know what they want. Knowing what you actually want and analyzing the consequences of any need has a business term ‘Cost Benefit Analysis’. SAP implementation definitely needs to pass through this route of brainstorming all possible scenarios. Chances are your company is not just ready for it or there are other pressing areas of priority. Well, you need to peer into every dark corner or end up stranded.

Implementing SAP is a real challenge and of course it tickles your pocket. However, what you can achieve with SAP can overshadow what you did to achieve it. Just visit SAP’s website and hear about a customer who reportedly made enough from his very first project to fund an entire enterprise-wide SAP implementation!

In spite of SAP selling its R/3 products on a ‘Price per User’ basis, the actual price is negotiated as per the unique factors of every negotiation. The factors may range anything from the number of users to modules. Thus, it’s actually pragmatic to check with SAP and share your business needs to determine the actual cost. Saying that,   starting around $4000 per user is not bad. There is of course an annual support cost of around 10% for periodic upgrades. Well the bottom-line is, check with SAP.

And now we come to the real job, the implementation part. It’s one thing to be equipped with the best and another thing to go for the shots. Right around the time you are pondering on the implementation cost, you actually need to do introspection on the aptness of your need. SAP implementation is a dynamic process as it involves a lot of factors. The major factors being- Timeframe, Resource Requirements and Hardware.

  • Timeframe

From a 45 days implementation for a small company to multi-nationals employing SAP as long as 5 years to a decade, the timeframe varies. Of course the decade long implementations in multi-nationals are not necessarily failures but rather an extensive plan for global functionality. Leaving these extremes behind, you may expect to complete the implementation in a year or sometimes an half more.

  • People

Similar range applies here too. SAP implementations in the smallest scale can be carried out on a part-time basis without any outside help at all. However, the other side of the range- the largest of the businesses may demand a different scale of manpower (sometimes over a thousand) including teams of consultants, project managers, heavy duty technicians and so on.

  • Hardware

The basics of SAP implementations ask for three levels of hardware (literally, boxes). Save one for the production system, one for test and the remaining for the development. These levels may multiply to 100 for the larger implementations involving multiple parallel projects.

Add these up, and a successful SAP project can range anywhere between $400,000 to hundreds of millions. This range speaks it all. SAP is as dynamic as your business aspirations. So, if you want your very own data, its best to talk to them or your consulting firm. It’s a straightforward process actually, desire a change, see its end and go for it.

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