Cost Estimate and Accounting in ERP
February 12, 2025
A process driven by primary metric alone is not fool proof. Operations managers always know that they face trade-offs. With everything that is desired, there is a chance that something that is not desired will come in too. Hence to prevent these secondary metrics are required. Here is how to use secondary metrics to ensure […]
Global business models are rapidly changing. Shorter life cycles of products and new business need exert pressure on Supply Chain managers to keep pace with the new scenarios. They are often faced with the target to reduce logistical costs and establish new supply networks. It has now become a common practice to outsource all logistical […]
An organization can be viewed as a collection of processes. At the grass root level, an organization is nothing but an arrangement of humans and technologies in a specific manner to achieve pre-determined objectives. However, work is divided amongst various processes to increase efficiency and effectiveness. However the functions of all processes are not the […]
The Indian Economy which was billed as the “fastest growing major economy” in the world and the “only bright spot” among Emerging Markets seems to have slowed down even before the latest “shock therapy” of “demonetization”. Indeed, the recently released growth figures from the CSO or the Central Statistical Office considered to be the official […]
Why India is in The Eye of Perfect Storm With Regards to the Jobs Crises By now, there is a consensus among all experts and other stakeholders that India is in the midst of a severe Jobs Crisis brought about due to several converging and intersecting trends. With Unemployment at a 45 Year High and […]
Initial investment in acquiring and implementing an ERP system is substantial in terms of both human efforts and financial resources. After, successful implementation, the system goes to maintenance mode and organizations start getting value out of their investment.
After a prolonged period, due to changes in business and technological paradigm, it becomes more and more difficult and expensive to maintain and extend the system. The process of reimplementation and beginning of a new cycle starts.
ERP life cycles, which encompass entire 10 to 20 years of effective operating life, are often confused with ERP Implementation Life Cycle. Some of the phases of ERP life cycle is shown in following diagram.
Maintenance will be covered by service level agreement, entailing payment of license fee to the vendor. For a complicated system, there may be a third party vendor, helping maintenance at site. The license fee, due to provision of escalation, gets escalated at regular intervals and after some years, adversely effects Total Cost of Ownership (TCO).
Parallel to business changes, technological changes also occur. New release and versions appear for underlaying technologiocal platforms like Operating System and Data Base. ERP vendors release patches and versions of their producdts at regular intervals which needed to be incorporated in the existing system. This usually involves minor or modeate efforts. But, problem arises where many softwae objects were customized during implementation. Retrofitting these objects for making them compatiable with later versions, may turn out to be a major migration exercise involving exorbitant cost and effort.
Your email address will not be published. Required fields are marked *