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from Oct 2021 to Mar 2022.
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This document is authorized for use only in Prof. Venkataraghavan K/Ms. Sangeetha Ganesan's Enterprise Recourse Planning Systems-2020-22 at Indian Institute of Management - Kashipur
from Oct 2021 to Mar 2022.
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Exhibit 1: Anatomy of a School District Enterprise Resource System

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Exhibit 2: High-Level Benefits and Payroll Process

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Exhibit 3: High-Level Credentialing and Evaluation


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from Oct 2021 to Mar 2022.
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Exhibit 4: Weighted Evaluation Criteria Assessment of Vendors

CRITERIA WEIGHT
Functionality/suitability
General requirements
Subsystems requirements 40%
Overall technology
Vendor demonstration

Price
Nonrecurring charges
Software
Modifications
Customizations 25%
Training
Recurring charges
Support
Maintenance

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Ongoing customer service
System upgrades
15%
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Maintenance
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References
Number of clients 10%
School district experience
Stability


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This document is authorized for use only in Prof. Venkataraghavan K/Ms. Sangeetha Ganesan's Enterprise Recourse Planning Systems-2020-22 at Indian Institute of Management - Kashipur
from Oct 2021 to Mar 2022.
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Exhibit 5: Typical ERP Implementation Timeline

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Exhibit 6: Cost Components of ERP Implementation

Cost Categories and Components Comments
Hardware Hardware is needed to support multiple environments,
• Servers including development, testing, and production.
• Storage devices
• Workstations Distributed applications typically require separate data
• Maintenance fees and application servers. Additionally, applications
accessible over an intranet or the Internet will require a
firewall server.

To insure against the loss of customized application

code and data, environments are typically constructed
with at least one level of redundancy.

High-end Sun servers used to run ERP systems for

Fortune 500 firms typically cost $100,000–200,000
apiece.

Yearly hardware maintenance and support fees

generally are 20% of the purchase price. These fees
generally provide “warranty” protection and on-call
assistance for questions or problems.
Software Software licenses for full ERP implementations can
• ERP software licenses range from $5 million to $10 million. Individual modules
• Operating system licenses (e.g., Solaris, Windows NT) within ERP systems can range from $1 million to $3
• Database system licenses (e.g., Oracle) million, depending on the features of the module.
• Maintenance fees
Yearly software maintenance and support fees are
typically 18–20% of the purchase price.
Network Factors affecting network costs are:
• Networking equipment • Number of sites to be connected
• Routers, switches, hubs • Bandwidth requirements
• Cabling • Quality of service requirements (e.g., availability,
• NIC cards error rates)
• Data transport services
Leasing a T-1 line typically requires a monthly fee of
$1,000–1,500.
Labor Factors affecting the labor costs are:
• Program management • Utilization of internal vs. outsourced labor
• Planning • Degree of customization required
• Implementation • Implementation experience of project team
• Requirements
• Design Outsourced ERP implementation projects can range
• Development from 25,000 to 50,000 man-days, depending on scope.
• Technical architecture Of this, implementation of HR functionality can range
• Testing from 8,000 to 15,000 man-days, depending on the
• Deployment degree of customization required. For an initial
• Training implementation, post-testing costs (rollout, training) will
• Maintenance generally be 10% of the overall labor budget.
• Post-implementation operations


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This document is authorized for use only in Prof. Venkataraghavan K/Ms. Sangeetha Ganesan's Enterprise Recourse Planning Systems-2020-22 at Indian Institute of Management - Kashipur
from Oct 2021 to Mar 2022.
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Exhibit 7: Summary Costs for the San Diego City Schools HR Module
Totals
Software costs
Application module $2,000,000
Operating/DB systems $500,000
$2,500,000
Incremental infrastructure costs
Number of servers per environment 6
Cost per server $150,000
Additional networking equipment and workstations $100,000
Total per environment $1,000,000
3
$3,000,000
Implementation consulting costs
Number of person days for implementation 8,000
Average daily rate of consultants $1,200
$9,600,000
Training/change management labor costs
Training costs as a percentage of implementation consulting 8.00%
$768,000

Total upfront costs $15,868,000

Exhibit 8: Benefits from ERP Implementation—Cost Savings

Type of Benefit Comments
Cost savings Process redesign suggested that approximately 42 positions could
• Staff reductions in HR and fiscal control be eliminated from HR and fiscal control due to the HR
• Reduced overtime implementation, with an annual savings of $1.75 million.
• Reduced printing costs
• Reduced processing errors Roughly 12% of the district’s $19 million in annual overtime was
• Reduced space costs spent in HR and fiscal control. Wiemann believed that he could
reduce these department overtime figures by 50%.

In the recruiting section of HR, there were 22 forms associated with

every assignment authorization (AA) and the district ran 80,000
AAs/year. It was difficult to project printing costs in benefits and
payroll, but Wiemann estimated that these two departments together
generated about as much paper as the recruiting section. A nearby
district reported that an HR implementation had reduced district
copier maintenance charges by 5%. SDCS copier maintenance costs
were $1.8 million.

The district knew that it overpaid employees nearly $1 million/year

due to processing errors. Roughly 1.3 percent of that loss was
eventually recouped. Wiemann wondered how the HR
implementation would affect processing errors.

Space costs were calculated to be $21.50/square foot in the central

San Diego area.

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Exhibit 9: Benefits from ERP Implementation—Productivity Improvements and

Soft Benefits
Type of Benefit Comments
Productivity improvements After extensive interviews with site-based staff, it was estimated that
• Clerical staff 5–10% of site-based clerical responsibilities would be eliminated due
• Principals to the HR implementation. One clerical staff member would be
assigned to a school for every 165 students attending. Average salary
and benefits for clerical staff was $43,500.

Interviews with principals revealed that anywhere from 15 minutes to

Soft benefits
• Improved employee morale/productivity
• Improved recruiting
• Improved management access to data
10 hours per month was wasted due to poor HR systems and
processes. Big schools tended to have more wasted time as turnover
was far higher. Some principals reported sometimes having to drive
downtown to get resumes of eligible applicants. Principals’ average
salary and benefits was $106,000. In addition, the district spent over
$1.2 million in principal training every year.
Districts from Colorado to Texas reported significant improvements in
employee morale due to HR system implementation. Management
also reported greater accountability among employees as work
histories were available to all managers within the district. Spending
on employee salaries constituted 82% of the district budget.

Many principals reported losing potentially high-quality candidates due

to poor systems and processes. The head of HR equated recruitment
improvements at her prior assignment to “getting an extra hiring team.”
Salaries of one hiring team: $320,000.

The district, unlike other districts in the area, spent $400,000/year on

an internal audit team, which provided access (9 to 18 months after
the fact) to HR and other financial data.


Exhibit 10: Summary Yearly Benefits and ERP Ongoing Costs

With Productivity
Hard Cost Savings
Improvements
Projected yearly savings
Salary savings—central office $1,732,018 $1,732,018
Overtime cost savings 1,055,079 1,055,079
Print shop-related costs 123,200 123,200
Reduction in processing errors 333,500 333,500
Space costs savings 72,912 72,912
Productivity improvements–school clerical workers 2,572,500
Productivity improvements–school principals 508,625
Total $3,316,709 $6,397,834

Projected incremental yearly costs

On-site IT support FTEs
Application maintenance (for customizations) 2 $200,000
Data 2 200,000
Operations/infrastructure 2 200,000
Software maintenance fees 500,000
Hardware maintenance fees 600,000
Incremental networking fees 120,000
Total $1,820,000


 .(//2**6&+22/2)0$1$*(0(17
This document is authorized for use only in Prof. Venkataraghavan K/Ms. Sangeetha Ganesan's Enterprise Recourse Planning Systems-2020-22 at Indian Institute of Management - Kashipur
from Oct 2021 to Mar 2022.