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What Return can a company expect from Its ERP Investment

It is difficult to calculate the Financial benefits provided by any ERP System because sometimes ERP increases revenue and decreases expenses in intangible ways that are difficult to measure. However, the return on an ERP investment can be measured and interpreted in many ways.

Because ERP eliminates redundant effort and duplicated date, it can generate savings in operations expense. Because an ERP System can help produce goods and services more quickly, more sales can be generated every month.

  • In some instances, a company that doesnt implement an ERP System might be forced out of business by competitors that have an ERP System how do you calculate the monetary advantage of remaining in business?
  • A Unified and well integrated ERP System can save a companys personnel, suppliers, distributors, and customers much frustration a benefit that is real, but difficult to quantify.
  • ERP System gives visibility of all strategic information across all branches, departments in one central screen. This allows the companies to take their decision faster.
  • ERP System s provide real time data, allowing companies to improve external customer communications. Better communication can improve customer relationships relationship and increase sales.
  • Sales revenue growth due to enhanced sales and customer service experience

These are the benchmarks for capital investment. In other words, the expectations of a manufacturer considering to purchase a capital machinery should be little different to those placed upon ERP purchase determinations. The focus should be long-term, on adding tangible value to the company, on producing real-world ROI.