Gartner Research

Don't Use ERP Rules of Thumb When Costing Projects

Published: 14 July 2015

ID: G00278220

Analyst(s): Denise Ganly


Organizations undertaking ERP projects often seek rules of thumb to estimate and compare their costs with those of other organizations. ERP leaders should use this research to understand the pitfalls of these rules and the fallacy of comparing one ERP project with another.

Table Of Contents
  • Key Challenges



  • Understand Why Rules of Thumb Do Not Work to Improve ERP Project Cost Estimation
    • Rule of Thumb No. 1: Project Costs as a Multiplier of Software Costs
    • Rule of Thumb No. 2: Project Costs per User
    • Rule of Thumb No. 3: Project Costs as a Percentage of Annual Budget or Revenue
    • Another Common Cost Question: Average Project Cost
    • Potential Consequences of Using Rules of Thumb
  • Define ERP Project Cost Categories as Thoroughly as Possible, and Estimate Based on Project Scope Rather Than Arbitrary Metrics

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