The sum of investments made up to the current time on ERP-assets [e.g., hardware, software licence/media, security and so on, all attributable to ERP and all of a long-lasting nature] acquired/developed/ replaced/upgraded over time by the enterprise, adjusted for accumulated depreciation and tax concessions on such assets up to that time. All expenses including costs of procurement, installation and commissioning of all ERP-assets of amortizable nature would be included in TCO, duly amortized. Invariably, TCO is treated as ‘cumulative investment net of depreciation’ and so shown in the books of accounts as ‘assets’ as on the time of ascertainment. Symbolically,t, TCOt = ? (TCOi - Depreciationi), i = 0, where, TCOt = Total Cost of Ownership [ERP-assets] at current time ‘t’, TCOi = Total Cost of Ownership [ERP-assets] at time ‘i’ preceding current time; [ i <= t ]. i.e., ERP assets = Cost of (hardware + software licence/media + security +...acquired/ replaced/ upgraded) at time ‘i’; Depreciationi = Depreciation applicable to time ‘i’. All expenses including costs of procurement, installation and commissioning of all ERP-assets of amortizable nature would be included in TCO, duly amortized. By rearranging the ‘time’ part, one can derive TCO values both as ‘projected’ to be part of initial evaluation of ERP- investment, and as ‘actual’ to be used for monitoring the ERP-usage.
Published in Chapter:
Designing to Deploying Customisable ERP Cost Effectively
S. Padmanaban (Mysore, India)
Copyright: © 2009
|Pages: 15
DOI: 10.4018/978-1-59904-859-8.ch021
Abstract
ERP systems have become key enablers of businesses today. While many organizations wish to adopt ERP for competitive advantage, they find choosing, using, and realizing expected benefits from, appropriate ERP extremely daunting, given the multitude of factors and options along technologies, vendors, people, and customisation cost and time. It is in this context that the experience presented in this chapter from two Indian projects on designing to deploying ERP systems—for two different organizations engaged in education and construction—becomes very relevant. Reporting on the various processes, practices, techniques, and methods employed through the projects, and the lessons learnt therefrom, the paper argues that time has come for designing and deploying industry-neutral generic ERP systems cost effectively. It proposes that through a combination of appropriate technologies, innovative tools, techniques and strategies, highly adoptive and customisable ERP systems can be designed and deployed at affordable costs and within reasonable timeframes.