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SAP Implementation Cost Benefit Analysis

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SAP Implementation Cost Benefit Analysis

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  • October 2013
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INTRODUCTION

In the modern age of competition, Businesses and Organizations need to undergo transformation in order to compete with the best and create Value for its Stake holders. Numerous methods have been tried over several years for mapping the functions of business on software, however most of them have been limited to conversion of data from legacy Systems to new systems till the advent of ERP System. Many projects have failed, new systems were not up to the task and this meant additional cost and loss of business. With the arrival of ERP, all this has changed.

Advent of ERP’s has led to introduction of new tools, custom methodology databases and applications leading to effective and efficient utilization of resources & increase in overall productivity. Motivation level of employees has improved, focus on budget has made executive level contribute with more enthusiasm.

In order to prepare for the arrival of the year 2000 (Y2K), Many companies were engaged in implementations of standard business software applications, the enterprise systems particularly such as ERP, and supply chain management systems. While these software systems solved the immediate problem of Y2K compliance, they were typically implemented with an emphasis on speed and the need to fix the Y2K problems. The scope of data conversion from the legacy to the new systems was not sufficient. Focus on business processes was required in order to leverage the capabilities of the Software to a maximum. Need arized to re-engineer the business processes completely for technology-driven business dynamics such as the implementation of e-business applications, ERP, B2B, SCM or Data Warehousing applications.

1.1 ERA OF ERP’s

Major motivation for an ERP was data visibility. Because ERPs are highly integrated, they have the potential to make much better decision-making information available to managers. This visibility, which gives an end-to-end view of supply chain processes, was expected...