Figuring the value of software

TalkBack 1 of 4:: Next »

Thread View
Flat View

Shallow, trivial analysis: This is a shallow, trivial analysis. You claim that ERP is 143 times the cost per user than SuccessFactors. You offer no proof of this claim, using the list price of a perpetual license for ERP compared to your calculation for the average revenue per customer's employee for SuccessFactors for a monthly subscription. Your math is highly dubious; hopefully you were more careful in your life as an accountant.

Even if one accepts your math, your conclusions are fatuous. Even if ERP costs 143 times the price of what companies (on average) consume from SuccessFactors, ERP could only be judged overpriced if it did not deliver 143 times the value of what companies (on average) consume from SuccessFactors. Thus, if a company were to consume 143 times the number of processes, or transactions, or volume of transactions, or value of transactions, with ERP as compared to SuccessFactors, then the company would be getting 143 times the value, justifying the price differential.

If we use a comparison of the number of business processes, the quantity is surely there in ERP. If we use the value of business processes, compare order management, procurement, and supply chain management with recruiting or goal setting, and ERP surely delivers. If we use the volume of business processes, well, how many orders does a company process per employee review? Surely, the volume is in favor of ERP.

By your argument, with a little more thinking applied, ERP is underpriced.; Posted by: MannyRamirez Posted on: 11/02/09 You are currently: a Guest | Members login | Terms of Use