Gartner Research

How to Develop Initial Cost Estimates for ERP Initiatives

Published: 09 July 2019

ID: G00402370

Analyst(s): Denise Ganly, Denis Torii, Paul Saunders

Summary

To get approval for ERP initiatives, CIOs are often asked to estimate the total cost, but many have insufficient information at the outset to do so with any accuracy. This report will help CIOs develop initial cost estimates when few facts are available.

Table Of Contents
  • Key Challenges

Introduction

  • Six Steps to an Initial Estimate of ERP Costs

Analysis

  • Get Upfront Estimates of All Elements Contributing to the Project’s TCO
  • Focus on the Largest Elements, Pick Ranges and Beware of Averages
    • The Largest Elements of the Cost Calculation
    • Why Averages Are Dangerous
    • Why Using Ranges, Not Absolutes, Is Important
    • Document Assumptions
    • Issue an RFQ or Work With Your Own Solution Architects and Other Resources

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