Measuring Your ERP’s ROI: Looking for the Hidden Sources of Return on Investment

When faced with the decision to purchase and implement new technological solutions, the first thought that comes to mind is, “What’s the ROI?” Generally, ROI is expressed as a number – after all, the formula is ROI = net gain/cost. Let’s say you buy a $5,000 software system and you then go on to make $7,500. That’s an ROI of 50%!

Sometimes, the sources of ROI are less obvious. However, that doesn’t mean that they’re any less important or that they shouldn’t be considered at all. Read on to learn how four hidden sources of ROI in your ERP implementation can transform your entire company, making it more profitable and sustainable.

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Finding the ROI in Higher Productivity in Your ERP Implementation

If you’re looking into investing in an ERP system, you’ve read about all of the benefits that they bring to organizations. One of those benefits is higher productivity.

Productivity gains are considered a hidden source of ROI because they’re harder to quantify. However, they’re no less important than other advantages that ERP systems bring to companies. Read on to learn how you can harness the power of increased productivity thanks to an ERP implementation.

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Where’s the ROI on Your ERP?

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.

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Hidden Sources of ROI for Your ERP Implementation: Lower Operating Costs

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.

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Error Reduction: The Source of ROI You’ve Never Considered

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.

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Where’s the ROI? In a Single Version of Truth

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?

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ERP ROI: Make Better Decisions

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.

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Use ERP workflow to improve your ROI

ERP workflows will help your bottom line. We link the steps we are supposed to take in our process as connected ERP transactions. Errors caused by disconnects, when one person performs a transaction and a second person makes a transaction that doesn’t fit with the first, are usually eliminated.

Workflows can be a short series of regular tasks or a lengthy annual process. Whatever form they take, they can greatly benefit a business that wants to reduce errors and cost.

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Gain Simplicity, Agility, and Value with Microsoft Dynamics AX

Microsoft Dynamics AX is designed to empower your people to be more productive and your systems to last longer, with the ability to scale to accommodate growth while delivering the insight you need to respond quickly in an ever-changing world of business.

Simple to Learn and Use
Simplicity is at the core of Microsoft Dynamics AX. It is easy to learn and use because it works like and with other familiar Microsoft technologies, such as Microsoft Office. And Microsoft Dynamics AX works the way you work, so it’s easier for you and your employees to make better decisions and get more done. Simplicity is built into every aspect of your experience”from initial purchase and deployment to ongoing maintenance and upgrades.

Delivers Agility in the Face of Rapid Change
Today’s business landscape is changing at an ever-increasing pace. To stay ahead, you need a business management solution that is designed to help you meet evolving demands. Microsoft Dynamics AX delivers the agility you need to adapt new business processes and extend functionality quickly, making it easier to enter new markets, add capabilities, or reallocate existing investments. In addition, Merit Solutions offers Microsoft Dynamics AX Cloud ERP to give you flexibility to expand or contract as business conditions change.

Drives Value for Your Business
Microsoft Dynamics AX delivers value for your business in three important ways. First, you can increase your return on investment as you boost productivity and create new ways to control expenses, helping to drive profitability. Second, Microsoft Dynamics AX offers interoperability with the other technologies you already use in your organization to help lower your total cost of ownership. Finally, you can achieve maximum benefit from your technology investment through improved time to value, especially when you don’t want or need an extensive IT infrastructure.

Whether you choose an on-premises or a cloud ERP deployment model, Merit Solutions RapidOn Implementation Methodology can get you up and running quickly with tools to accelerate installation, set up and extend core functionality, and migrate data from your legacy systems. And there’s more. Microsoft Dynamics AX is backed by a commitment from Microsoft that includes a 10-year support life cycle for each major release”combined with an ongoing investment in research and development”so that you can grow your business with confidence, knowing that your business management solution can keep up with your ambition.


Reduce IT Costs with Microsoft Dynamics AX

Challenged to do more with less, many IT departments are finding that the cost of maintaining outdated, legacy business systems is simply too high. The cost of not having a system”or the wrong system”however, can be much higher. With the right tools in place, you can eliminate many of the costs associated with IT.

Control your IT costs with a business solution that can help you:

  • More easily manage data during implementation and initial migration, as well as across disparate systems.
  • Leverage common skill sets, helping to ease customization requirements and reduce training time for new IT staff.
  • Increase productivity and efficiency by simplifying and streamlining common IT tasks.
  • Reduce support requirements by eliminating duplicate data entry.
  • Integrate your enterprise resource planning (ERP) system with existing IT assets to increase productivity and maximize return on investment (ROI).

Microsoft Dynamics AX is built to help IT teams simplify and streamline common IT tasks, ease integration to help your business get the most out of its existing IT investments, and help reduce costs. Here’s how:

  • Microsoft Dynamics AX runs on Microsoft products that you may already be using, such as Windows Server or Microsoft SQL Server. By reusing existing servers and licenses, your company may be able to lower its total cost of ownership.
  • Extending the reach of ERP with a series of programmable tools that enable quick integration with outside data sources, such as Web services and legacy applications.
  • The skills needed to deploy and maintain Microsoft Dynamics AX are readily available – often from your current IT staff.
  • Handle custom configuration and modification easily by taking advantage of a model driven layered architecture and an object-oriented development environment.
  • Providing employees with rich, self-service functionality and easy-to-use tools to ease the burden of tasks commonly placed on IT, such as updating personal information and reporting tasks. Quickly scale your ERP system to accommodate new companies or multiple sites.

Nucleus Research has found that Microsoft Dynamics AX customers achieve returns in areas of increased visibility, increased productivity, and reduced costs. 44% of Microsoft Dynamics AX Customers were able to reduce IT costs. Read the full report: The Real ROI of Microsoft Dynamics AX.

Feel free to use our Microsoft Dynamics AX ROI Calculator to calculate the potential annual savings you could achieve by implementing Microsoft Dynamics AX!