Cost benefit analysis of Enterprise Resource Planning system for the Naval Postgraduate School

Abstract

This thesis reviewed and evaluated the ERP Solution System currently in the Integration Testing Phase at NAVAIR and examined the benefits and cost that NPS could leverage by purchasing the system for approximately $2.7M for 200 users or $3.1M for 500 users. This thesis looked at the capabilities of the current NAVAIR SIGMA ERP Solution System, in terms of money and level of expertise. The research also looked at the alternatives and options to enable NPS to close the gaps to fit its current needs. RADM David Ellison, Superintendent, wanted to explore the possibility of joining NAVAIR's ERP Solution System, currently under the Integration Testing Phase, as he believed it was an opportunity for NPS to leverage on this technology. As seen by senior management, the partnership with NAVAIR could benefit NPS, by acquiring and implementing an ERP at a fraction of the cost normally associated with this type of purchase. An additional benefit would be reducing the time associated with implementing an ERP System, normally between 3 and 5 years, to 11 months. Management also saw the advantage of benefiting from NAVAIR lessons learned, partnering with an activity that was familiar with ERP in a Navy setting, and conducting joint training It was determined by the research that by purchasing an ERP system, NPS in the long run, would realize savings by reduced labor cost, decreased funds spent on NPS homegrown system and access real time reports which would eliminate account balances discrepancies.