When it comes to calculating ROI for ERP systems, we tend to look at a dollar and cents amount. We think of ROI as a purely financial amount. If you’re saving this much money or earning that much more money than the cost of the ERP, then you’re getting a good return on investment.
However, that’s only one way to think of the ROI on ERP systems. Another way of looking at it is to look at the less tangible or quantifiable benefits that ERP systems bring. Read on to learn about how to assess less obvious sources of ROI.
During his or her pitch, your ERP salesperson most likely highlighted statistics about how much you can save – “you’ll see a 20% reduction in this cost” or “you’ll see a 40% saving in this area.” That tends to be an effective sales approach and gets results, because everyone wants to achieve these goals.
Do you remember the “Where’s Waldo?” series of books? Each page was filled with an illustration of a crowd of people. Hidden inside the crowd was a tall, skinny man (Waldo) who wore blue jeans, a striped sweater with a matching hat and scarf set, and glasses. Trying to pick him out of a crowd of hundreds of characters led to frustration and eye strain, yet there was ultimately a sense of triumph when you located Waldo.
What’s the first thing that comes to mind when you hear the words “ROI” and “ERP systems”? Do you automatically think of how much money you’re saving because you’ve implemented an ERP system, or how much you’ve profited as a result of this technology?
Everyone has made at least one bad decision in their lives. Some decisions are worse than others, though. And while humans are imperfect, bad decisions can be avoided.
That’s good news for businesses, because the ramifications of a bad decision can be huge. But, bad decisions don’t come out of the blue. There’s groundwork that employees and executives lay for themselves. Read on to learn one of the top causes of bad decisions and how you can avoid it.
The medical device manufacturer that had a spectacular compliance failure probably made the headlines. Their story will be noted in university classes around the world for years to come. Let’s look at another outcome.
Here’s a pop quiz for you: how many data sources can your ERP system connect to? You might think that this open-ended question wouldn’t have a right or wrong answer, but it actually does.
If you find yourself saying, “Well, our ERP system can only connect to one or two data sources,” that’s a bad thing. Read on to learn why your ERP system’s inability to connect to a variety of data sources is a sign that you should consider replacing it.
There are four signs that you’ve outgrown your ERP system. The first sign is that it has limited functionality. Second, your ERP system is neither user-friendly nor intuitive. A third sign is that your support costs are growing ever higher. Finally, you can’t connect to all of the data that you need.
It’s easy to ignore these signs. How many rationalizations have you come up with to justify not investing in a new ERP system? “It still works. The ERP system isn’t broken. We can still afford these support costs… for the time being.” Read on to learn why these signs are too important to ignore, and what the consequences are for not updating your ERP system.
One of the primary benefits of any ERP system is decision support. We might think executives make the important decisions. In fact, people at every level of the business make important decisions throughout every day. Use your ERP to help guide every user to the choice that leads to an optimal payoff for the enterprise.