How to manage ERP Investment Justification

Enterprise Resource Planning – ERP investment justification is an important step as your company decided to implement an ERP software for your organization there are few questions which certainly arise with respect to the decision some of them include – The time require to complete the ERP Project, the Failure probability, Vendor capability and obviously the cost of implementing ERP software which plays an important role in making or breaking ERP decision. In this blog post we will cover points on how as a manager you can justifying ERP investment by understanding answers about your organization ERP implementation.

• How your organization understand ERP 

Understanding the ERP knowledge within your employee and resource is important. You first need to understand and determine about the employee who know about ERP software or has used ERP solution previously. This can create a base for your justification. If the user is not aware about ERP system then it may be difficult for them to accept the new software. Although in today’s world any business small to big always use ERP or standalone software.
You can also check if there are employees who have expertise or knowledge of implementing ERP software this helps you to allocate project managers for implementation of different modules and can reduce your ERP implementation time and cost.

• Understanding your current business processes?

Documentation plays a crucial role before implementing any ERP software – You need to understand and define the current operations and workflows in a documented format so that everyone is on same page during discussion.
If documentation or processes are not defined then it is better to initiate with Business requirement Analysis for ERP. Business requirement analysis helps you to understand the current flows and differentiate the standard and customized processes which you may need in the ERP solution.

It also helps to determine the challenges that your business faces, as well as opportunities for improvements. By conducting extensive research into current workflows, bottlenecks and areas of waste can be fully understood – providing justification for ERP system implementation to improve revenue and productivity.

• Justify the vision for your organization?

Once you complete the processes creation you can justify the vision on the workflow improvements, efficiencies, workflow streamlining and revenue enhancement. During the implementation it is important to examine whether these goals can be achieved by current technology and processes or there is a need to change your current processes for betterment.

• ERP Cost Justification

Cost plays an important role in approval or disapproval of ERP projects. ERP implementation cost can be high and that is the only main reason many business fail to implement ERP even after being in industry. There are various cost involved while implementing ERP software which is as follows :

• • • Product:

This include the ERP software which your company is selecting plus the Computer hardware, operating system, database software, networking equipment, and tools (including installation, start-up, and testing) – dependent on deployment chosen

• • • Modules or Apps –

There are many ERP software which are based on Pay based on Modules –

• • • Licenses –

ERP software licensing, installation, configuration and data conversion

• • • ERP cost for Server –

Annual licensing and maintenance fees for software

• • • Vendor Implementation or Service Charges –

This can include development customization charges

• • • On-site v/s Offshore development ERP cost –

These cost are based on the way your company want to carry ERP implementation

• • • Maintenance –

Future system expansion and customization, Cost can vary based on various other factors which your organization and vendor needs to decide before implementing the ERP software.

Read Complete Article : Different Cost for ERP implementation

• Understanding Return on Investments?

Return on Investment is one of the challenging aspects of ERP justification as understanding the total cost for implementing ERP is easy but projected savings can be more difficult to calculate. One can easily measure the direct benefits of implementing ERP solution such as waste reduction, decreased in overtime, enhancement in marketing and sales department but indirect advantages of ERP such as higher employee productivity, streamline processes are not easily measurable.

Read Complete Article – How to Achieve Return on investment with ERP

In determining whether ERP software worth justifying your company’s investment, you need only ask your company several questions to make your decision. Globalteckz offers ERP software development with its proven Implementation method through which we have delivered more than 100+ ERP projects successfully with Positive ROI

For more information you can email us on sales@globalteckz.com

Our Articles related to ERP Software:

• 10 Important steps before implementing an ERP system
• Odoo ERP Software Development Methodologies
• How to evaluate Manufacturing ERP Software and Vendors
• Manufacturing ERP with Odoo Software
• Globalteckz is an official partner of Odoo
• Enhance your Business with Customize Odoo ERP solution