The COSMIC EPC method - An ERP functional size measurement method delivering time and cost estimates

Abstract: Background: The implementation of ERP (Enterprise Resource Planning) systems is substantially different than technology orientated software applications e.g. embedded software. The ERP domain is recognized with a high degree of complexity originating from different organizational divisions which is operationalized by a wide set of business processes. These complexities make it very challenging for the effort estimation of ERP implementation projects which often cause these projects to run overtime or over budget. The current project estimation methods do not account for the complexities involved in ERP implementations which lead to inaccurate effort estimates. Method: In this study we analyze a number of functional size methods which could be used to improve ERP project effort estimations for ERP implementations. We studied nine projects at SAP AG as a focused study for effort estimations. The research was carried out using an action research method while collecting primary data through observations and interviews. Results: This thesis investigates why the current ERP effort estimation methods fail to deliver accurate estimates while creating a new method which could provide accurate estimates. The COSMIC FSM method is selected as the best fit for ERP effort estimation and used as the basis to create a new method which is used during a focus study at SAP AG. A new FSM method called the COSMIC EPC is created for accurate ERP effort estimations. The new method primarily makes use of business process models (BPM) as input to measure a projects functional size. A supportive toolset is developed to further enhance on the method’s capabilities and integration into existing practices. Add-on functionality for the SAP ARIS EPC (business process modeling tool) and SAP ASAP (project management software). The COSMIC EPC method is unique due to its capability to determine the functional size of ERP business processes used as an input for accurate time, cost and effort estimates. Conclusion: We conclude that when adding new parameters to the estimation methods the accurateness of ERP projects can effectively be improved. The parameters include business process reuse and customization which increase the visibility of ERP process complexity and increase the accuracy involved in ERP effort estimations. The COSMIC EPC method can be used to produce accurate time and cost estimates and improve on the existing expert judgment methods used today.