How do ERP project valuation?
Before the implementation of ERP projects are under way, enterprises must carry out the project's scientific evaluation, for example, ERP project implementation needs how much the cost of the input-output cycle is long, etc., are business focus. This paper attempts to give a kind of enterprise ERP project value assessment methodology to quantify the business value of ERP projects for enterprises to invest in such projects to provide basis for decision making.
ERP Project Cost Estimation
We will demand analysis when the list of functions to be converted into a list of resource requirements, including personnel, equipment and materials. We must conduct a cost estimate for these. Some of ERP cost of the project includes not only these costs, but also to carry out the project in order to generate financing to financial institutions, there is the financial cost for the project implementation training. At the same time, demand analysis should be used when it takes value engineering costs. Again, the project will have to be met in order to cope with the unpredictable things to happen into the cost of reserves. Cost estimates are generally three basic technologies: analog estimation method, top-down estimation method and parameter model estimation method.
Analog estimation method (Analogous estimates), it uses the actual costs of previous projects as the basis for the current cost estimate. Using this method we must carefully analyze the current projects and past projects. This approach requires not only the appearance of the two projects are similar in nature also called on the two projects have very similar. Only by meeting these conditions in order to use this method to assess, or estimate the cost would generate an error.
Top-down estimation method (bottom-up estimating), including estimates of individual work items and the summary of individual work items into the overall project, individual work items and estimated the size of the staff experience required to estimate accuracy. This method WBS detail the circumstances under which the best decomposition. And we have no detailed WBS estimates of phase decomposition we can use the various functions in accordance with the cost of the project evaluation, and then aggregated into the overall project cost.
Parameter model estimation method (parametric modeling) is a mathematical model for the application of the project characteristics (parameters) to estimate the project cost. If you create a model using historical information is accurate, the project parameters easy to quantify and model the size of the project has a strong adaptability, then such a parameter model the estimated cost is reliable.
In the enterprise ERP project cost estimation, in addition to software development related to part of the costs, other cost estimate is relatively easy. Because other costs can be easily obtained in the market reference price therefore, ERP project cost evaluation emphasis should be placed on the software development cost estimates. This part of the accuracy of estimates of a direct impact on the accuracy of the cost of the project. From the specific model can refer to Dr. Balibomu constructive cost model (constructive cost model) of the improved model of COCOMO II 2000. Because the model is based on sophisticated mathematics, professional knowledge and project management experience, and take into account the current use of development tools, environmental changes and human factors, is a rigorous engineering model. This is not in the set. |
