SAP Implementation Costs Analysis

Version 6.0

1/23/2016
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ERP Implementation Scope

TAX
Manufacturing Vertex
Application SAP
Upgrade **

Order to Cash Shipping

CMS
KRONOS Procure to Pay
Plan to Make
Replacement Record to Report Consolidation,
*** EPM Planning,
*** Budgeting

Data
Web Site* SFDC Analytics
Warehouse

IDTDNA.com Salesforce.com
Costs are not included in the estimates
Costs are included in the estimates
** Costs are budgeted under MaD
* Integration with existing site planned *** Separately funded programs
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SAP Implementation Costs Assumptions
• Internal resources costs estimate is based on what Deloitte provided.
• $1M in Backfill costs are included as non-capital expense.
• CAPEX / Expense ratio used is 70 / 30.
• It is assumed that GTS(Global Trade System) bolt-on is not required.
• Deloitte has proposed a 10 month implementation timeline. Target start date will be 4/1/2016. Target go
live will be 2/1/2017.
• $1.3M contingency has been planned for potential timeline delay of 2 months. Target start date will be
4/1/2016. Target go live will be 4/1/2017.
• 10% contingency ($0.9M) has been included.
• Costs planned under following categories:
– Capital Expenditures: Software purchase, Consulting Fees, Internal Resources
– Non-Capital Expenditures: Travel, Consulting Fees, Internal Resources, Backfill
– Operating Costs: Infrastructure Costs, Application Support, Software Maint.
– Savings Generated: TBD
– Depreciation: 7 year useful life for the ERP costs

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 SAP Implementation Cost Profile
10 month Implementation
Million Dollars 13 10 month Implementation
Includes:
Expense 5
$0.9M Overall Project Contingency
$1.3M Contingency for additional 2 months
$1.0M Backfill for internal resources
$200K Vertex TAX software implementation
$200K CMS Shipping software implementation

CAPEX 8 Excludes:

$2.0M Internal IDT Labor cost budgeted under 2016 OPEX Plan
$400K Manufacturing system software upgrade
Budgeted under MaD
10 months

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 SAP Implementation Cost Profile ($12.9M)
7,521

2,005

5,516

1,268
1,022 1,000 1,031 880
Expense 0 317
1,022 230
Capital 1,000 50 50 951 650
*
0

Software Consulting Backfill Travel Vertex Shipping Timeline Overall

(SAP) Contingency Contingency
10 month implementation
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 SAP Implementation Cost Profile ($12.9M)
15,083
188
12,923
4,122 880
1,268
648 10,125 250 200
200

Total Reduction : $4.9M

Plan Software Consulting Travel Revised Project Pre-ERP Reporting Timeline Overall Total
Fees Total Team Design ContingencyContingency
Training
10 month implementation
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SAP Implementation Cost Profile
Implementation Costs Operating Costs

7,969 5,189
Expense 3,016 Steady State Support
2,928 Capital 3,857
2,621 3,557 Depreciation
4,952
395 3,984
1,854 2,784 2,484
5,041
3,098
1,205 1,073 1,073

2016 2017 2016 2017 2018 2019

Includes Operating costs for AX

10 month implementation
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SAP Implementation Cost Model
2016 2017 Project Total
Capital Expenditure
SAP Software Licensing Costs 722,438 - 722,438
Vertex TAX software licensing costs 150,000 - 150,000
Shipping Software Licensing Costs 150,000 - 150,000
Vertex TAX software implementation costs 25,000 25,000 50,000
Shipping Software implementation costs 25,000 25,000 50,000
SAP Implementation & eCommerce Integration Costs - Consulting Resources 3,734,837 1,493,935 5,228,772
Pre-ERP Design activities Costs 133,929 53,571 187,500
Timeline Contingency for 2 additional months - 950,686 950,686
Contingency 100,000.00 550,000.00 650,000
Total Capital 5,041,204 3,098,192 8,139,396
Non-Capital Expenditure 4,907,275 3,044,621 7,951,896
Implementation Costs
Travel 625,003 405,711 1,030,713
Project Team Training 100,000 100,000 200,000
SAP Implementation & eCommerce Integration Costs - Consulting Resources 1,244,946 497,978 1,742,924
Timeline Contingency for 2 additional months - 316,895 316,895
Reporting Consulting Expense 100,000 100,000 200,000
Pre-ERP Design activities Costs 44,643 17,857 62,500
Backfill Resources for business FTEs dedicated to project 714,286 285,714 1,000,000
Contingency 100,000 130,000 230,000
Non-Capital Expenditure: Implementation 2,928,877 1,854,156 4,783,033
7,970,081 4,952,348 12,922,428

10 month implementation
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