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   Kaytek IT - ERP Consulting |
Consulting
Software
ERP
Entrepreneurs / C-Level
CFO's
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Kaytek IT - ERP Consulting |
 Computing ROI (Return on Investments) on ERP ? Business value needs to be quantified from the capital expenditure incurred on ERP projects.All ROI calculation approaches and figures where anticipated or actual have to be internally developed. Background contextual information, assumptions and linkages with all relevant information in the ERP Requirement / IT Strategy Studies / IT Roadmap must be clearly provided to effectively value-add on the same. Like any other IT Projects, four types of returns are generated as follows: Money, Time , Knowledge and Brand Returns. The first two are tangible, the next two are Intangible. For more on ROI computation, you may refer to the simple 4 step ROI Estimation Process with Visual for Calculations. Should One depend on ERP Vendors for ROI figures ? Actual examples of ROI figures pertaining to any ERP implementation, regardless of vendor can be used as good starting benchmarks. The ERP vendor websites would be a good place to check out for ERP success stories and ROI figures. All figures (internal or external) must be scrutinized in fine detail for a thorough analysis. You can take vendor ROI figures as a starting benchmark (to be validated and verified independently) in case the same pertains to similar installations (similar Industry vertical, similar IT Maturity of End-Users, Similar Modules, similar geographies, etc.) |
However, every ERP installation is unique and different and needs an independent ROI calculation. Various ROI Tools and Templates are available and can also be internally developed (.e.g. MS Excel Spreadsheets) to track and measure the same. ERP Decisions are Foundational and often Irreversible. The external IT environment itself being quicksand like in terms of rapid technology & business model changes, reasonable caution has to be exercised at all times for IT investments. Many organizations do multiple independent ROI / IT Project Validation exercises before investing in the same. If not already done, this could be perhaps explored as a future target activity. Money can surely be saved here. |
Comparing ERP ROI Figures across Organizations and Industries ? Different businesses (with or without ERP softwares) have different sizes, market dynamics, geographies, challenges, constraints and different IT Maturities. Return on Investment - ROI figures across businesses in different verticals cannot be compared. It is like comparing Apples to Oranges. Save Money on ERP. SAP-Specific Missing SAP ROI's ?  SAP For Free ? SAP Project Cost Components. ERP - Tips for Procurement ! India-Specific - Organizations considering ERP can perhaps strive to get better IT value by asking vendors to peg future IT asset unit price commitments in terms of USD rather than Indian Rupees to be able to take advantage of the strengthening Rupee over the next few years. Weblogs Are ERP Consultants delivering enough value to organizations ?
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