Abstract: Due to their limited resources, budgets and their high sensitivity to costs, when Small and Medium Enterprises (SMEs) take the first step into implementing an Enterprise Resource Planning (ERP) system, they need to think about many things, foremost the cost of adoption. Literature suggests that most ERP implementations fail due to inaccurate and optimistic budget and schedule estimations, as well as, anticipating indirect costs beforehand is problematic. With the deficiency of a clear model of cost factors for ERP adoptions, ERP adoptions face high risks of failure. Failures could be caused by several factors, but the scope of this research is focused on identifying, exploring, and validating a comprehensive list of ERP adoption cost factors. This could aid SMEs in visualizing the different expected costs, and would consequently assist in better future cost management and estimations. There has been plenty of research in ERP; however, a clear gap in ERP cost identification, management, and estimation exists. This paper focuses on identifying direct and indirect cost factors that influence total costs in the ERP adoption process. The paper presents a cost list that has been developed through literature and an ERP expert panel. Furthermore, this study validates the costs list through interviews with different stakeholders within ERP adoption projects in Egypt.
　　Key words: ERP (enterprise resource planning), cost estimation, cost factors, SMEs (small and medium enterprises).
　　1. Introduction
　　Enterprise resource planning (ERP) systems are enterprise wide application packages that unify, store, integrate, and disseminate all the information flowing through an organization. ERP systems integrate accounting and financial information, human resource information, supply chain information, and customer information [1].
　　An ERP system implementation is one of the most complex and largest projects an enterprise could embark on. Although ERP systems mainly target large enterprises, many factors lead small and medium sized enterprises (SMEs) to an ERP adoption decision. ERP implementation projects may vary in size and structure, each requires careful management decisions during the implementation process [2]. Moreover, an ERP implementation is a critical project that requires commitment, substantial amount of resources, and organisational changes [3]. Size and structure of organisations implementing ERP systems are not the only variables within the ERP project. Its specific context factors [4], existing software reuse, and the adoption of a specific vendor’s implementation methodology are also important factors [5].
　　Given the complexity and high costs of ERP systems, organizations need to think about many things, foremost among which is the cost of adoption [6]. With the shortage of proper representation of ERP adoption cost factors and cost estimation methods, especially for SMEs, ERP systems adoption projects are facing challenges in identifying and estimating costs, size, time, effort, productivity and other cost factors [7-8]. Furthermore, when ERP adopters cross their estimated budgets, this could be very critical for an SME with limited resources. Some studies argue that the rise in costs is sometimes not relatively high when measured against benefits. Although this argument might be true, still the main argument here is not the cost/benefit analysis, it is the projected budget vs. the actual money spent on the adoption project. Even if the expected benefits are high (usually long term), this would not protect companies from cancelling an ERP adoption project, or going bankrupt due to unanticipated cost overruns, which could exceed their allocated budgets and capacities. In addition, benefits and their associated costs should be projected correctly prior to the project, as many companies implementing ERP systems filed for bankruptcy [3, 9-10], and this was mainly due to a flawed ERP budget and schedule estimations [11-13]. Thus, the costs perspective could be more crucial despite the potential benefits, as you supposedly gain more benefits when you spend more money, but it is all about your budget constraints and availability of resources [14].
　　SMEs are more cost sensitive than large enterprises. Any cost rise or project delays would seriously affect SMEs’ survival in the market. Since ERP adoption within SMEs is still immature, researchers need to inspect and identify the basic drivers that influence ERP adoption decisions [6], especially ERP adoption costs. In general, information systems (IS) and ERP implementations’ costs are mainly divided into direct and indirect. Direct costs are the expenditures that are directly associated with the implementation and acquisition of new technology or system [15]. Clear examples of ERP direct costs could be the license and information technology (IT) infrastructure costs. Alternatively, indirect costs would include human and organizational related costs that usually occur during the implementation process [16]. Like business process re-engineering, human resources (HR) costs, project schedule delays, etc. Moreover, most of the informants interviewed in this research view any unanticipated cost that crosses the estimated plan and budget as an indirect or hidden cost, even if it was a marginal increase in a direct cost. Estimating ERP adoption direct and indirect costs is a problematic process and not clearly presented in ERP literature. The next section will highlight some of the problems that face organizations in general and SMEs through their investment justification and budget estimation phases.
　　This study aims at presenting and testing the validity of cost factors that occur within ERP adoption projects in Egyptian SMEs. These cost factors have been identified and published in a previous research, and this research is a continuation by validating the factors list through interviews with ERP-adopting organizations, consultants, implementation partners, and vendors in Egypt. There is a considerable gap in IS research regarding cost factor identification and classification[17]. The presented list could lead the way towards a more solid and valid costs’ list percentages and weights, which consequently could be used as a cost factor indicator or estimation guide for potential adopting organizations. The Egyptian context was chosen as a research kick-off, as it was convenient to the author due to the availability and access to data. Moreover, based on initial pilot interviews with ERP consultants, many of them stated that the current cost estimation methods are not adequate for ERP settings. In addition, they stated that the usual European or American cost factors weight distribution (e.g., accountants’ rate/hour) is not relevant to the Egyptian context. The results presented in this study could enrich ERP literature and practice if further validated, extended, and compared with other research in other countries or contexts.
　　The rest of the paper is organized as follows: Section 2 summarizes the existing literature on ERP adoption cost management, estimation, and issues of ERP implementation projects in SMEs. Section 3 presents the research methodology and target cases. Section 4 presents the results and discusses the contribution to previous literature. Section 5 discusses the limitations of the study and after which, section 6 concludes and presents potential future research avenues.
　　2. Literature Review
　　In most cases, ERP systems are the solution to manage business and coordination complexities effectively [18]. ERP in large enterprises market is close-to-saturation, as nearly every major business has adopted one or more ERP systems [19]. Nowadays, with the increasing number of alliances, value-webs, data flows, and number of complex operations, SMEs start to consider adopting ERP systems. Moreover, many SMEs have several Silo computer systems within their businesses, which make it too costly in order to store and rationalize redundant data [1]. Thus, an increasing number of SMEs is taking ERP adoption decisions, as they believe that it is a step towards process standardization [20], cost effectiveness, and a way to survive the severe market competition [21]. That also explains why SMEs are a prospective target for major ERP vendors like SAP, Oracle, and Baan [6].
　　According to Scheer & Habermann [22], Baan, Peoplesoft, as well as SAP state that the software license purchase is not the big bulk, as customers could spend around three to seven times more money on the implementation and its complementing services than the initial software license costs. That could be a clear cause for the increasing number of law suit cases related to ERP’s erroneous adoption cost estimations[12]. Hence, ERP cost estimation effort should be embarked closely by beneficiaries (clients), vendors, and third party consultants if any, because the vendor’s cost estimates alone could omit some customer specific costs; like hiring, search and vendor selection costs, and business process reengineering.
　　Markus, et al. [2] divided and classified the ERP implementation project into three phases: (a) project, (b) shake down, and (c) onward and upward phases. Particularly, the ERP system is introduced in the company within the project phase, and the success of this phase is measured according to cost and time completion within schedule and budget. Equey, et al. [23] found that size, consultants’ experience, and people characteristics have a great influence on ERP projects costs.
　　According to Holland & Light [11] and Martin [13], around 90% of ERP implementations are behind schedules, over their budgets, or entirely cancelled due to rigorous underestimations during the requirements phase [12] in which unwarranted optimism and overlooking in cost and schedule estimations, could be the cause, rather than project management pitfalls[11-12]. A recent survey published by Panorama Consulting Group (ERP Report 2011) indicates that in the year of 2010, 61.1% of ERP implementations crossed their deadlines, and 74.1% crossed their estimated budgets.
　　In literature, many studies discuss the difficulty of estimating costs of IT and ERP adoption projects. Love, et al. [15] has stated that in most IT adoption cases, both direct IT and indirect costs cross their estimated value. The convolution in IT and ERP adoption cost identification and estimation relies on the fact that it is a complex task [18, 24]; it requires vigilant analysis for both direct and indirect costs. The noticeable gap in IT and ERP adoption cost management and estimation areas is partially because the formal conventional budget estimation methods fail to reflect, quantify and accommodate indirect adoption costs [8, 25-26]. Similarly, the IT established and widely used software cost estimation models, e.g., COCOMO II [27] are not appropriate within an ERP setting [9, 12, 24]. The problem with the COCOMO family and similar models is that they are more focused into software development cost estimation. Their cost drivers are based on factors that are not adequate or applicable in an ERP setting, as lines of code (KLOC) and development time (D) are not considered relevant drivers in an ERP adoption project [24, 28-29]. Moreover, the cost factors in software development might be easier to project and identify, than those of complex implementations. Though, these models could be relevant to ERP software development and pricing.
　　There have been few efforts made towards ERP cost exploration and estimations. However, these efforts were either (a) driven into generic software development cost estimation (pricing), like Refs. [12, 27, 30-31], or (b) were closely focused on ERP in a specific context, like ERP cost identification and estimation from a portfolio management lens [5], or (c) for cross-organizational ERP projects cost estimations[24], or (d) adopting a Transaction Costs theory lens to govern ERP costs in a service oriented architecture(SOA) implementation setting [32].
　　The costs list presented in this research could be used in order to project more realistic cost estimates and factors through identifying potential cost factors, while benefits should be the motivation for implementing an ERP system in first place. Usually the expected benefits are the system requirements which are based on the requirements analysis included within the request for proposal (RFP), and the cases presented in this research show that some Egyptian SMEs do not follow any formal benefits realization practices. Furthermore, there is an apparent gap in ERP research, that there are very few studies that focus on ERP cost estimation, ex-ante evaluation or costs identification in SMEs context.
　　3. Research Method and Design
　　This research is a continuation to validate cost factors based on existing literature, and data collected from an Experts Panel along with actual data from vendors, implementation partners, investment and ERP consultants, and 4 SMEs that already completed their ERP adoption process (See Fig. 1). This research applied a multiple case study design, as it has more investigative recompense compared to single case study, as well as it provides a flexible approach for Information Systems research [33-34]. Furthermore, in order to build strong substantiation of constructs, data triangulation as a mixture of qualitative and quantitative data collection methods were used [33]. The following section provides more details concerning the data collection process.
　　


　　Fig. 1 Overall research design.
　　3.1 The Experts Panel
　　Due to the implications of this research in practice, an Experts Panel has been conducted. The Experts Panel recommendations and insights were very valuable to this research within its early stages, as experts provided valuable inputs that helped the researchers to better understand the phenomena or the problem they are investigating. The Experts Panel serves as an initial research onset that aids the mapping of the researcher’s ideas and research problems with practice. Moreover, the panel was used as a mean of eliciting knowledge from ERP experts. The Experts Panel approach included a combination of Delphi, Focus Groups, and mind mapping techniques. This group method was chosen by researcher in order to discuss and reflect on the participants’ personal experiences with relation to the researcher’s research topics [35]. In addition, face-to-face group techniques could be fruitful while investigating a certain phenomenon at the early exploratory stages of a research [36-37]. Also, the Experts Panel could represent respondents’ beliefs, experiences, and responses in a way in which would not be suitable using other techniques like one-to-one interviewing or questionnaires [38]. Additionally, a number of researchers have also pointed out that group brainstorming and discussions can generate more momentous comments than usual interviews [37]. As recommended by Ref. [39], dynamic mind maps were used as tools for representing the ERP cost factors list graphically, which stimulated the participants to engage with content and provide modifications and rankings for the initial mind map. Moreover, mind maps could be useful to use in cases where problem solving, group understanding and brainstorming, delivering information, and evaluation of participants’ beliefs are needed [39]. The illustrative dynamic mind mapping technique is similar to cognitive maps, which are used to present and record qualitative data in group discussions [40]. Please refer to Ref. [14] for more details about the benefits, limitations, and comparisons of the Experts Panel conducted within this research, in contrast with other research methods.
　　The panel included key experts involved in ERP implementations in Egypt. The participants were from selected ERP consultants, vendors’ representatives and implementation project managers. The expertise of the participants represents diverse knowledge in a broad range of international corporations and industrial sectors. The potential participants were chosen according to their popularity, number of clients and market share in the Egyptian ERP market. Twelve potential participants were contacted by phone and via e-mail, and eight experts responded and participated. The panel included vendor consultants from SAP, JD Edwards, Focus ERP, independent ERP consultants, project champions, and managers from different industrial SMEs. The variety of experts was to ensure that the researcher captures different views and perspectives on costs. The Experts Panel’s main purpose was to develop a list of costs that occur during ERP implementations in SMEs and rank them according to their influence on total costs (See Fig. 2). The Experts Panel took two rounds which included lists, rankings, discussions, and visual costs list presentation. At the end of the panel, a cost list was developed and then confirmed with all 8 experts.
　　


　　Fig. 2 Expert panel-developed costs list (Adopted from Ref. [14]).
　　3.2 Interviews and Cases
　　The author conducted a total of twenty-two qualitative face-to-face interviews. Ten of the interviews were carried out with informants that have been involved in the ERP budgeting and cost control process. The interviews were conducted in eight companies in Egypt, and discussed the whole ERP lifecycle, from the pre-selection phase until the post-implementation phase. The participants included a mixture of stakeholders who have been involved in ERP system implementations, four SMEs (6 interviews) which had implemented ERP, a major local ERP vendor, major ERP implementation consultants and vendor partners (two companies), and a senior independent ERP consultant in Egypt.
　　According to Egyptian government official reports[41-43], the SME classification and definition in Egypt is not yet clear nor standardized, especially across industrial sectors [42], as the current classification through number of employees and fixed assets is not adequate [43]. Thus, the interviewees where asked to classify their organizations’ size according to their annual turnover, number of employees, number of ERP users, and their perceived size in their industry market in comparison to their same industry competitors. Three were classified as medium-sized, and one as a small enterprise.
　　Altogether six interviews gathered information from the four SMEs including two manufacturing companies, one in the importing and distribution business, and one retail company. One interview focused on a vendor representative, two on implementation consultants, and an independent senior ERP consultant. The vendor and implementation consultants were chosen according to their recognition and number of projects within the Egyptian SMEs. The informants had experience on various ERP systems including:
　　Al Motakamel (local ERP);
　　Focus;
　　Infinity (local ERP);
　　JD Edwards;
　　Oracle E-Business Suite;
　　SAP;
　　And various in-house developed Integrated Enterprise Applications.
　　As the interviews needed informants with a background of the financials involved in the ERP adoptions, all the interviewees were in a senior or managerial position. The interviews topics covered the ERP selection processes, feasibility studies, investments justification, budget estimation process, and ex-post investment evaluation. All the informants were given the cost list developed by the panel of experts (Fig. 2) in order to validate it and modify it if needed. They were also asked to give percentages on the cost factors according to their actual expenditure in their projects. That would aid in ranking cost factors in relation to total costs, and would aid other SMEs to identify their potential costs and budgets. The interviewees were briefed about each cost factor and its sub-factors, so they can easily identify and map their costs under the corresponding umbrella.
　　All interviews were digitally recorded. In the following, four target companies: “Sakkara”, “Khafre”,“Senusret”, and “Kamose”, who had implemented ERP systems, are introduced in more detail. The company names are fictitious to preserve anonymity (Table 1).
　　Sakkara had an in-house developed system for many years before moving to an international ERP system. The company was mainly facing scalability and technical problems with the existing legacy system that were affecting its day-to-day operations. Moreover, they had other challenges with the system that “were due to the employee turnover, absence of sufficient system documentation, and support” (IT manager). Thus, the company decided to acquire a standard ERP package, which would be “more stable and easier to handle” (IT manager).
　　The company used no external ERP consultants, as they see themselves competent enough to identify needed requirements, select, and manage the ERP system. The company estimated its own budget for the project, without the use of external investment consultations.
　　Table 1 Overview of informants and target cases.
　　


　　The project team was composed of internal employees and the implementation partners. The system went live in January 1, 2008.
　　The ERP modules implemented were finance and controlling, sales and distribution, material management, customer service, human resources management, customer relationship management(CRM).
　　Khafre deals with a diverse number of commodities that are sold directly to customers through one outlet. The commodities vary from fresh food, fast moving goods, non-food commodities, textiles, and furniture.
　　Prior to the ERP adoption, they had a local Egyptian ERP system that had a complete retail-specific package. It was consisted of an ERP as a back office, and a point of sale (POS) application as a front office. This system had many technical problems including poor performance, slow transactions, and imprecise report calculations. Although it was both a front-end and back-end solution, still it had many integration problems with the POS, which dramatically affected the company’s operations. Thus, Khafre decided to move to an ERP package that can provide integration with a POS solution. The company had an IT consultant involved in the whole project, and he developed the main budget estimation for the adoption project.
　　The project budget was circa “3 to 5% of the yearly sales revenues”, a steering committee member mentioned. The implemented modules were finance and controlling, capital asset management, logistics, procurement, and sales and distribution. The system went live in August 2007.
　　Senusret is specialized in producing paper and carton supplies for fast food restaurants in Egypt. The company’s manufactures several paper, carton, and wrapping products. The company had several dispersed applications before migrating to an international ERP system. Most of the processes were not integrated within the applications used, and were manually done. The applications were mainly built on Microsoft Excel.
　　The company suffered many business and technical problems due to the lack of integration between the applications. “The existing scattered applications did not meet the business requirements and they were not integrated, for example we had problems processing orders, sales’ planning was not integrated with production planning,” a steering committee member mentioned.
　　The ERP system was implemented in 2007, and the modules were finance and controlling, order management, purchasing, warehousing, plus an external customized payroll system. Senusret hired a senior ERP consultant, which helped in estimating the costs and budget needed for the ERP implementation.
　　Prior to the ERP adoption, Kamose had several scattered applications, which lacked integration and scalability. “We had scattered systems, so we needed integration […], the systems we had were working with an Access database, which could not handle the business transactions anymore.” (IT manager). Moreover, the company suffered loss of data incidents, as the existing system couldn’t handle the increasing number of records. “The system could not handle the number of invoices, then we faced failure in the database, and we lost some data, so we decided to buy a new system.” (IT manager).
　　Kamose produces dairy products like milk, cheese, and butter. The company also imports and distributes different kinds of fish.
　　The company did not have a consultant during the selection process. The company did a rough cost estimation based on the vendor’s estimates. They later hired a consultant during the implementation process. The ERP modules implemented in Kamose were finance and controlling, warehousing, purchasing, fixed assets, order management. The company now is considering implementing the HR and Manufacturing modules to extend their ERP.
　　4. Results and Discussion
　　In order to increase the researcher’s understanding and the reliability of this research, the interviews conducted have included open ended questions about the evaluation, estimation, and budgeting methods which the companies used. Moreover, the informants were asked about the difficulties they faced during the application of formal budget estimation and ex-ante evaluation methods. In general, none of our four target organizations had followed formal practices for IT investment evaluation or cost estimation. “We did a rough budget estimation and total cost of ownership, which included the licenses cost, implementation costs and so on. We only calculated the external costs, which we will pay to third parties in cash, we didn’t calculate internal costs. We had also put 20% extra as a reserve, as some costs usually pop up during implementations, without prior expectations.” (IT Manager, Sakkara). In addition, according to the consultants and target cases interviewees, proper formal cost estimation and feasibility studies are very rare in the context of Egyptian ERP implementations in general. However, the informants still claimed that ERP requires significant financial resources. Moreover, the consultants and most of the informants from the target organizations reported that the ERP projects had often drastically exceeded their initial budgets and schedule estimations; some even doubled the initial budget.“…The actual expenditure was double our estimated budget, but we had to go on.” (IT manager, Sakkara). When Sakkara’s IT manager was asked about why the costs have doubled, he said “because of external and internal factors. The external factors are related to the implementation partner, they under estimated the costs for this implementation scale, although we asked them to take enough time in their evaluation, but the implementation partner wanted to get the deal by any means. The internal factors were related to change management; we did not pay attention to this cost while setting-up the budget”. Implementation schedule estimations were crossed in all target companies. “We crossed our budget because of the delay in the schedule estimation, which is a cost, as well as, change management costs were not properly calculated, because of improper implementation scope estimation in first place.” (IS manager, Khafre). Vendors and consultants agreed that most of SMEs follow informal budgeting procedures. “SMEs are affected by the ERP offer prices; they usually do not properly include the infrastructure costs within the budget for example. They usually do not follow any formal budgeting procedures at all. But this differs when there is a consultant, usually he would roughly do a better budget estimation.” (Branch manager, Abu Simbel). Likewise, other interviewee from an implementation partner stated that their clients usually do not follow formal budget estimation processes. “Probably two or three companies have followed semi formal budget estimation methods, but in general, customers just check our offers and check if they have the required budget for it or not, without following any formal methods.” ERP implementation operational manager, Pyramids. On the other hand, some interviewees from client companies had doubts regarding the reliability of vendors’ project cost estimations, “relying on vendors’cost estimates only is not wise, as sometimes they have problems in estimating costs that matches your organization’s size, or they just present a low and unrealistic cost estimate in order to win the implementation bid” (IT manager, Sakkara). Moreover, some expressed the difficulty of conducting ERP cost estimations, “estimating ERP adoption costs is very difficult and almost impossible when using the existing financial and budgeting models, because there any many hidden costs that you cannot expect or know before the actual implementation” (IT manager, Sakkara). Several informants have provided reasons for unexpected cost escalations, and some implementation partners referred it to the “Frequent change in requirements, or new customization requests related to new needed reports”. (ERP solutions department manager, Giza), or that “customers usually do not know what exactly they need out from the system, so their requirements frequently change, and that increase delays and costs.” ERP implementation operational manager, Pyramids.
　　


　　Fig. 3 List of actual cost percentages.
　　In order to validate the costs list in Fig. 2, all the informants were asked to check if there are any costs that need to be added, modified, or deleted from the list. Moreover, they were asked add percentages of the total cost on every cost factor they spent money on. The purpose of adding the expenditures’ percentage is to try to map common cost factors between SMEs, which could aid in better estimations for new adopters. All informants agreed that the list is very comprehensive and it contains all the cost factors that usually occur during the adoption process. However, some of these cost factors apply to some cases, like machinery. “This list is carefully done, I will gladly put the percentages on the cost factors, as it could aid me in future projects as well, and it is important for me to have all the costs calculated as a reference anyway. I wish I had it beforehand, as it is a good visualization of cost factors.” (IS manager, Khafre).
　　Fig. 3 presents a sample of a filled-in costs list by an informant. The informant put actual expenditure percentages for each cost factor related to their case.
　　The results are palpable that the cost identification and estimation process is problematic for both implementers and SMEs, which corresponds to IS and ERP cost estimation literature. All target cases have crossed their budgets due to unpredicted costs and schedule delays. Consultants and vendors stated that this happens in most cases and rarely an ERP adoption project stays within the estimated budget because of unforeseen costs and delays. Clients usually relate the rise in costs to unplanned and pre-unidentified costs. Some of these hidden costs are unplanned human resources costs or related to neither realistic nor comprehensive estimated budgets provided by the implementation partners and vendors. On the other hand, informants from vendors and implementation partners mostly claim that the rise in costs is usually because of the poor requirements analysis, frequent changes in client requirements, and last minute customization requests.
　　As cost factors are often unclear and many are hidden and overseen, the presented costs list could initially aid SMEs to identify all potential cost factors related to their case and scope, as well as, get a glimpse of actual weights of each factor to prepare a more rational budget estimates. Moreover, vendors, implementation partners, and consultant could benefit from the further extension of this research, as it would aid them to give their clients more realistic overview and estimations while considering all cost factors presented. Further, the list could help in developing a cost estimation model based on ERP-relevant cost factors and weights.
　　5. Study Limitations
　　This study is the first attempt to discuss and validate experiences of ERP adoption cost management and estimation in Egyptian SMEs. The findings and results are more practical than theoretical because the participants of the Experts Panel and interviewees are actual ERP users and consultants. In spite of this strength, the study has weaknesses. Some limitations originated from the approach of our research. Firstly, we had to rely on the retrospective experiences of the respondents. It may be argued that respondent views might be biased, however, we have asked the informants to give realistic percentages and estimations as possible. Secondly, 10 interviews only were carried out, as finding willing informants with the ERP-project financing details is not an easy task, however, some of the interviewees had experiences with more than 100 implementations. Thirdly, our samples are limited to Egypt. Thus, general conclusions must be made with prudence. Moreover, the implementation of ERP in Egyptian SMEs could have some differences than other contexts, as in some cases, SMEs can apply for an ERP implementation partial funding from the Ministry of Trade and Industry, which usually covers half of the project expenses (this applies to 2 of our 4 target cases). This might affect the motivation for a proper cost management or control in some cases. Nevertheless, ERP is no longer restricted within countries, because of globalization. Therefore, the findings of this study can be more than an indicator for other countries as well.
　　6. Conclusion and Future Research Venues
　　Through an expert panel and interviews, 10 main cost factor nodes were identified, which subsequently have sub-factors. The importance of identifying these factors relies on the fact that many SMEs (and enterprises in general) which did not have a prior ERP implementation, might lack the experience to identify costs that could occur during the adoption process. Specially that some of these costs are not direct or visible, and interviews show that actual expenditures are usually higher than the estimated ones. SMEs can use the presented costs list in this paper in order to better predict the cost factors they might face, or need to include within their budget estimations, as well as, would help in the cost management process. For research, the costs list could help other researchers to better investigate ERP adoption cases, or participate in action research during implementations. For practice, the costs list could decrease the tensions between vendors and clients through providing more accurate view of occurring costs and needed budgets. In addition, this paper identifies some of the current gaps in ERP cost estimation literature.
　　This research has the potential to be extended in many corners. Validating and comparing results of this cost list with other SMEs in different countries or contexts would increase the validity and generalizability of the cost factors. In addition, this research can be extended to compare results between different enterprise sizes and/or industries. Moreover, using the cost list to study the difference between projected budgets and actual expenditures would help other companies to better estimate costs and have an idea about their weights before the actual adoption. Finally, the extension of this research would lead to a more realistic cost estimation model when based on real data, collected from actual ERP adoption projects. In its current stage, the cost factors list presented might not be used as a cost estimation model as such, however, it would guide potential SMEs in anticipating potential cost factors that occur during ERP adoption projects.
　　References
　　[1] T.H. Davenport, Putting the enterprise into the enterprise system, Harvard Business Review 76 (1998) 121-131.
　　[2] M.L. Markus, C. Tanis, P.C. Fenema, Enterprise resource planning: multisite ERP implementations, Commun. ACM 43 (4) (2000) 42-46.
　　[3] Y. Moon, Enterprise resource planning (ERP): a review of the literature, International Journal of Management and Enterprise Development 4 (3) (2007) 235-264.
　　[4] S.-W. Chien, et al., The influence of centrifugal and centripetal forces on ERP project success in small and medium-sized enterprises in China and Taiwan, International Journal of Production Economics 107 (2)(2007) 380-396.
　　[5] M. Daneva, Approaching the ERP project cost estimation problem: an experiment, in: 1st International Symposium on Empirical Software Engineering and Measurement, 2007.
　　[6] Y. Everdingen, J. Hillegersberg, E. Waarts, Enterprise resource planning: ERP adoption by European midsize companies, Commun. ACM 43 (4) (2000) 27-31.
　　[7] M. Daneva, ERP requirements engineering practice: lessons learnt, IEEE Software 21 (2) (2004) 26-33.
　　[8] Z. Irani, A.M. Sharif, P.E.D. Love, Transforming failure into success through organisational learning: an analysis of a manufacturing information system, European Journal of Information Systems 10 (2001) 55-66.
　　[9] M. Al-Mashari, Enterprise resource planning (ERP) systems: a research agenda, Industrial Management & Data Systems 102 (3) (2002) 165-170.
　　[10] M. Newman, Y. Zhao, The process of enterprise resource planning implementation and business process re-engineering: tales from two chinese small and medium-sized enterprises, Information Systems Journal 18 (4) (2008) 405-426.
　　[11] C.R. Holland, B. Light, A critical success factors model for ERP implementation, IEEE Software 16 (3) (1999) 30-36.
　　[12] C. Jones, Estimating Software Costs Bringing Realism to Estimating, 2nd ed., McGraw-Hill, New York, 2007.
　　[13] M.H. Martin, An ERP strategy, Fortune 2 (1998) 95-97.
　　[14] A. Elragal, M. Haddara, The use of experts panels in ERP cost estimation research, in: J.E. Quintela Varaj?o, et al.(Eds.), Enterprise Information Systems, Springer, Berlin Heidelberg, 2010, pp. 97-108.
　　[15] P.E.D. Love, Z. Irani, D.J. Edwards, Industry-centric benchmarking of information technology benefits, costs and risks for small-to-medium sized enterprises in construction, Automation in Construction 13 (4) (2004) 507-524.
　　[16] Z. Irani, P.E.D. Love, Developing a frame of reference for ex-ante IT/IS investment evaluation, European Journal of Information Systems 11 (1) (2002) 74-82.
　　[17] Z. Irani, A. Ghoneim, Identifying, managing, and controlling information system costs: an exploratory case study, in: 8th Americas Conference on Information Systems, 2002.
　　[18] G. Buonanno, et al., Factors affecting ERP system adoption: a comparative analysis between SMEs and large companies, Journal of Enterprise Information Management 18 (4) (2005) 384-426.
　　[19] C. M?ller, P. Kr?mmergaard, P. Rikhardsson, A comprehensive ERP bibliography 2000-2004, in: IFI Working Paper Series, No. 12, 2004.
　　[20] L. Willcocks, P. Seddon, G. Shanks, Second-Wave Enterprise Resource Planning Systems: Implementing for Effectiveness, Cambridge University Press, New York, 2003, p. 464.
　　[21] H. Klaus, M. Rosemann, G.G. Gable, What is ERP? Information Systems Frontiers 2 (2) (2000) 141-162.
　　[22] A. Scheer, F. Habermann, Enterprise resource planning: making ERP a success, Communication of the ACM 43 (4)(2000) 57-61.
　　[23] C. Equey, et al., Empirical study of ERP systems implemenations costs in Swiss SMEs, in: International Conference on Enterprise Information Systems (ICEIS), 2008.
　　[24] M. Daneva, R. Wieringa, Cost estimation for cross-organizational ERP projects: research perspectives, Software Quality Journal 16 (3) (2008) 459-481.
　　[25] S. Alshawi, Z. Irani, L. Baldwin, Benchmarking information technology investment and benefits extraction, Benchmarking: An International Journal 10 (4) (2003) 414-423.
　　[26] A. Ghoneim, A comprehensive analysis of it/is indirect costs: Enhancing the evaluation of information systems investments, in: Proceedings of the European and Mediterranean Conference on Information Systems, Polytechnic University of Valencia, Spain, 2007.
　　[27] B. Boehm, Software Cost Estimation with COCOMO II, Prentice Hall, Upper Saddle River, NJ, 2000.
　　[28] T.K. Abdel-Hamid, K. Sengupta, C. Swett, The impact of goals on software project management: an experimental investigation, MIS Q. 23 (4) (1999) 531-555.
　　[29] M. Jorgensen, M. Shepperd, A systematic review of software development cost estimation studies, IEEE Trans. Softw. Eng. 33 (1) (2007) 33-53.
　　[30] B. Boehm, K.J. Sullivan, Software economics: a roadmap, in: Proceedings of the Conference on the Future of Software Engineering, ACM: Limerick, Ireland, 2000.
　　[31] B. Boehm, Software Engineering Economics, Prentice Hall Advances in Computing Science & Technology, 1981.
　　[32] J.V. Brocke, B. Schenk, C. Sonnenberg, Classification criteria for governing the implementation process of service-oriented ERP systems—an analysis based on new institutional economics, in: AMCIS 2009, San Francisco.
　　[33] K.M. Eisenhardt, Building theories from case study research, Academy of Management Review 14 (4) (1989) 532-550.
　　[34] R.K. Yin, Case Study Research: Design and Methods, Vol. 5, 3rd ed., Sage, Thousand Oaks, CA, 2003.
　　[35] R. Powell, H. Single, Focus groups, International Journal of Quality in Health Care 8 (5) (1996) 499-504.
　　[36] R. Kreuger, Focus Groups: a Practical Guide for Applied Research, Sage, London, 1988.
　　[37] T. Hines, A evaluation of two qualitative methods (focus group interviews and cognitive maps) for conducting research into entrepreneurial decision making, International Journal of Qualitative Market Research 3 (1)(2000) 7-16.
　　[38] A. Gibbs, Focus groups, in: Social Research Update, Issue 19, Department of Sociology, University of Surrey, 1997.
　　[39] C.L. Willis, S.L. Miertschin, Mind maps as active learning tools, J. Comput. Small Coll. 21 (4) (2006) 266-272.
　　[40] C. Eden, F. Ackermann, Cognitive mapping expert views for policy analysis in the public sector, European Journal of Operational Research 152 (3) (2004) 615-630.
　　[41] Economic-Research-Forum, MSME Definition Study, Egyptian Ministry of Foreign Trade, Cairo, 2004.
　　[42] G. Lerchs, Operational Definition for Micro, Small and Medium Sized Enterprises in Egypt, Egyptian Ministry of Foriegn Trade, Cairo, 2002.
　　[43] G. Lerchs, The Study of Operational Definition for Micro, Small and Medium Sized Enterprises in Egypt, Egyptian Ministry of Foriegn Trade, Cairo, 2001.