Ring of Truth: UNIT4 CODA White Paper on How Big ERP Costs > $1.2 Million a Year

I just ran across a 2009 White Paper from UNIT4 CODA on the high cost of running Big ERP systems. Titled the The High Cost of Change for ERP, the paper touts these sobering statistics:

• Many companies spend more than $1 million a year to continue to modify and update their ERP systems
• The complexity of effort in modifying an ERP system can range anywhere from 3-25 person days for minor modifications; 7-90 person days for moderate modifications; and 16.5 to 190 days for substantial modifications
• Complexity and cost of ERP system modification are major obstacles in customizing an ERP system

And it’s just as ugly when you’re talking about swapping out an existing system for a new system. As I’ve written before, swapping in a new ERP system is a hard process to bring in on time and on budget, and many times someone gets fired in the end.

The thing about this white paper is that it just rings true. When you think about the cost of equipment, software maintenance, programmers, operations support, DR and HA systems, backup management, I can see where you can easily reach $1.2 million in a medium-sized company.

The other interesting thing about this white paper is that they talked to Finance executives when gathering their data rather than IT people.

Alas, the sad part is they don’t give many good solutions for the problem except for change company processing to match best practices in shrink-wrapped solutions. But that can be rather jarring, too.

Anyway, it’s a good read that rings true. You can download a version of this white paper here.

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