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Apr 14/2003

Estimating What SAP Has Cost You

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Preamble:

This article introduces an "Estimating Cost Model" against SAP Development after the fact. Quite often companies are in a position of not knowing what the actual cost of development was. Having a handle on the ball park cost of work done becomes important when considering replacement decisions or as a general management need to know thing.

While it becomes difficult to estimate real dollars in hindsight, a cost model is proposed that will effectively round itself out and error on the side of underestimating the cost. The unit of cost is what SAP calls a Transport. A transport is created by the developer which represents the cycle of work done by a Resource to affect changes and move these changes from the Development environment to Production.

The model will be based on the cost of implementing a SAPscript Business Document Infrastructure. The technique introduced is applicable for SAP related estimates.

Discussed will be:

	Note 1:	Cost Model for Work Done
	Note 2:	Establishing the Daily Cost
	Note 3:	Findings

Note 1	COST Model for work done

Top	This cost model will effectively round itself out and error on the side of underestimating the cost. The unit of cost is based on what SAP calls a Transport. A transport is created by the developer which represents the cycle of work done by a Resource to affect changes and move these changes from the Development environment to Production. This work has a direct cost around the Business, Functional and Technical Resources. Further within SAP, these resources are typically a mix of contractors and staff.
Note 2	Establishing the daily cost

Top	The daily associated cost requires estimating a percentage of cost for a contractor and a percentage of cost for an employee. In this example the cost breakdown is as follows: One Day = 70% @ $900 for a Contractor and 30% @ $300 for a Site employee allowing for benefits = $720/Day. One Year = 200 days Note: Adjust the number days per transport and rate as required with an attempt to error on the side of underestimating
Note 3	findings
Top
	The cost of implementing and maintaining 185 SAPscript documents to date for this site has involved 8078 person days at a daily rate of $720 dollars generating a total cost just under six million dollars.

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