What Is ERP (Enterprise Resource Planning) – A Complete Guide
Apa itu ERP? ERP singkatan dari Enterprise resource planning. Baca penjelasan terperinci mengenai ERP dan…
CynthiaMay 17, 2023
A lot of ERP implementations fail because the goal of implementing an ERP is unclear. Most of the companies we talk to just want to “upgrade from their current systems.”
Ideally, business leaders should know what it is that prevents them from growing their companies through data and having discussions with their customers, employees, and suppliers.
By doing so, they will know what it is they should start doing, stop doing, and continue doing. And it will be clearer for them to see how an ERP software can help them achieve their goals.
Once you know how an ERP software can help you achieve your goals, you can quantify those benefits (even if it’s just a rough estimate).
Some examples would be:
Click here to download a Google Sheet template to estimate your operational cost savings from getting an ERP system.
Once you know what your goal is, you will know exactly what features you need and what you don’t. When you speak with ERP implementers, they would then be able to provide a more accurate cost estimate.
Generally, ERP costs include:
We often find companies who want everything and they end up having to pay more than what they need. Eventually, they don’t use the features they requested. Don’t waste your money.
You are getting an ERP because you want your company to be more profitable. Therefore it is important for you to know your rate of return from investing in an ERP software and when you are going to break even.
Return on Investment = (Total Expected Benefits – Total Costs) / Total Costs x 100%
Break Even Point (in months) = ERP One-time Costs / (Monthly Expected Benefits – Monthly ERP Costs)
Although there is no rule to this, we generally think that if your break-even point is less than 2-3 years, you should get an ERP software.
Impact Insight Team
Impact Insights Team is a group of professionals comprising individuals with expertise and experience in various aspects of business. Together, we are committed to providing in-depth insights and valuable understanding on a variety of business-related topics & industry trends to help companies achieve their goals.