Boosting the ROI of an ERP project – Part I

Since the early 1990s, when Gartner first used the term, ERP has been used to mean many things, but it is impossible to overstate the importance of its current avatar in the modern economy. Enterprise Resource Planning (that is what ERP stands for, by the way) has become the go to solution for companies looking to integrate systems and processes, cut down waste, and improve efficiency. But with passing time, companies have started raising a question – are ERPs worth it? This series of blog posts looks to answer this question along with another – how can you boost the ROI of your ERP implementation? Along the way, we’ll also discuss these issues –

  1. Why should you measure the ROI of your ERP?
  2. What parameters should you use to measure the ROI?
  3. What are the potential costs and benefits of an ERP?
  4. How can you ensure that you are deriving the greatest possible value from your ERP?

Enterprises around the world try to follow ERP implementation best practices in the initial stages, but are not always sure about the ROI of the project. However, just like any other part of business, the impact of ERP too needs to be measured to ensure that you are getting all the benefits you can, and are utilising the full capabilities of a multi-faceted and powerful tool.
Measuring the ROI of an ERP system is an important endeavor for businesses all across the world and it is done in a number of ways, but the questions that need to be answered with the process remain (almost) the same. These include queries such as –

  1. Will ERP decrease our operating expenses?
  2. Will ERP help to increase revenue?
  3. Will ERP shorten our order-to-delivery cycle time?
  4. Will ERP shorten our time to market?
  5. Will ERP decrease our inventory investment?
  6. Will we be able to reduce our material costs through improved supply base management?

The last two points are critical ones for readers of this blog and we will talk more about them (inventory control and procurement cost savings) in this series of blog posts. Just keep an eye out for the next instalment of the series in which we discuss the parameters used to measure the ROI of your ERP implementation.


Further Reading –

Blog – How to increase ROI on ERP investments with Data Governance?

White Paper – The Million Dollar Question: Master Data Management Before or After ERP

Case Study – Leading Electric Utility taps Verdantis for help executing Massive MDM and ERP Upgrade Initiative

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Vipul Aroh

Vipul Aroh

Vipul Aroh is a part of the Marketing team at Verdantis. Although relatively new to the field of master data management and data governance, he is fascinated by the topics and is becoming more passionate about them by the day. Vipul holds a Master’s in Business Administration from Sydneham Institute of Management, Mumbai.

One comment

  • Great post.Thanks for providing such useful information. The given information is really very helpful to me. Hope, I will get more information regarding the same in future.

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