Published: 26 September 2001
Analyst(s): Frances Karamouzis, Brian Zrimsek, Pat Phelan
Management Summary Enterprises implementing enterprise resource planning (ERP) and ERP II systems remain at a high risk of project cost overruns and missed deadlines. Gartner estimates that, for 40 percent of enterprises deploying ERP or ERP II systems through 2004, the actual time and money they spend on these implementations will exceed their original estimates by at least 50 percent (0.7 probability). Many enterprises have suffered spectacular project failures due to unplanned or underplanned implementation projects. A key component of the planning required to avoid such failures is the development of a reliable estimate of implementation project costs and duration. This process must go beyond simple "rule of thumb" metrics and vendor cost promises. Enterprises must produce an accurate estimate of -- and ultimately, a detailed work plan for -- project costs, duration and resource needs before the implementation process begins. This Strategic Analysis Report provides a 10-step process for enterprises to use to produce a reliable estimate of the costs and duration of implementation projects for ERP (and for the traditional ERP components of ERP II). It provides detailed guidance on a range of critical time and cost areas associated with implementation activities, many of which are often overlooked in estimation efforts. They include: o Process design o Core and supplemental staffing needs o Data conversion o Customization and interface development o End-user training o Project management o Pilot deployment and rollout to remote sites Not only will this 10-step process provide significant assistance in producing a reliable estimate, but the information gathered during the process will also form the foundation for detailed work-planning activities. The statements of work, estimates and assumptions generated can be carried forward into the development of a detailed implementation work plan. This 10-step approach is based on the assumption...
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