ERP software or MRP software has become essential needs of every organization today be it manufacturing industries or trading business. ERP software has been now a day’s considered as a foundation for many companies as ERP software enables companies to perform basic business operations in the most efficient way. Further to Add more ERP software not only serves specific industries there are many modules available for different industry that ensures best of best processes has been applied in the specific modules with timely implementation and cost effective solution.
One of the biggest advantages of using ERP software is that it integrates with all your other departments that ensure powerful linking to the functionalities of other departments. Usually before ERP implementation a Trading business or manufacturing business deploys Multiple software which is not integrated with other software therefore cannot interchange data in real time. Also deployment of multiple software for different departments require management of vendor, customizations challenges and upgrades issues.
Normally, assessing Return on Investment for an ERP software system can be a very exhaustive—and sometimes difficult task, and one that many IT managers and even ERP vendors tend to overlook. Sometimes, this is because IT managers don’t know how to properly measure the ROI, or they simply aren’t interested in measuring the ROI on ERP implementation at all. For example, in many larger manufacturers, the common sense is that ERP is an essential part of the organization infrastructure cost and therefore there is no reason for assessing ROI it’s simply a tool absolutely necessary to do business in the first place.
Understanding the ROI of your ERP software depends on understanding that a reliable answer will requires – many of the benefits are intangible and gained through such things as the streamlining of processes, improved availability of information, real-time integration of data centers, and other competitive advantages that are often hard to assess.
While assessment of ROI for your ERP software you much consider the various cost that is involved in the implementation of ERP software. Some of the cost that includes the Licensing cost, software cost, implementation cost, development & Customization cost, training and so on . . . . These costs must then be measure against the revenue advantages gained, which might be directly quantifiable based on reduction in cost or improvement in productivity as an example one of our client who was having large ecommerce website and other market platforms such as Amazon, eBay and so on handling orders more than 1000+ from all these platforms deployed more than 30 + people in his company but after implementation of ERP software integrated with these market platforms he reduce the head count from 30 to 14 employees only, This was implemented 3 years back. Therefore you can understand how much
Therefore ROI should include both the tangible and intangible aspects of your business such as time reduction in manual entries, sales management, Customer relationship management, streamline of every departments and so on . . .
How to achieve Return on investment from ERP implementation
Few years back we covered a blog post on how to achieve ERP ROI quickly which includes the areas to concentrate such as
People and Processes : People are one of the most important areas while implementing any ERP software as they know very well the in and out of business processes
Costing, Timelines Estimations: There are many instances where companies who implement ERP solution underestimate the cost and timelines rather concentrating on go live and pilot testing.
Always know where to end an ERP implementation: Sometime if you have not understood the end of your project then ERP will be ongoing process with multiple time investment
Be Flexible for Long term : As we said that before ERP implementation one should make sure to draw the finish line of the project further an organisation should be flexible in the long term to accept the new change in the solution which ensure ERP investments to be fruitful in the long run.
Expect High from ERP: Set your expectations high with ERP software as ERP take your business to the next level.
Other Articles related to Enterprise Resource Planning Software (ERP)