ERP Business Case Tips
If an ERP implementation isn’t fully thought out or executives and stakeholders aren’t on board, there is only one possible outcome: project failure. Developing a thorough business case for ERP is a remedy for both those issues. A business case gives you the opportunity to explore which software systems and features are necessary to add value to your business and demonstrate this value. This will bring you a step closer to obtaining the right ERP solution as well as project approval.
Because we know how important it is to build out a strong business case for ERP, we’ve provided the following tips.
Identify Business Needs
The C-Suite pursues higher level goals, so it doesn’t always see the little things that are impacting business performance. By speaking with mid-level managers, you can find out which issues employees face every day. Perhaps people are spending too much time on manual data entry and searching for information. Maybe accountants are experiencing bookkeeping errors. Or the quality team is taking too long to manually inspect products. Document these pain points in the business case and explain which specific ERP features can solve problems.
But executives and stakeholders aren’t just thinking about the present. Make sure you also consider future business requirements. Is your business thinking about expanding its product line, adding overseas locations or modernizing shop floor equipment? Identify ERP vendors with scalable solutions, global management capabilities and cutting-edge features, such as IoT functionality. This is the kind of software that will drive sustainable business growth.
Prove ERP Value
Nobody in the C-Suite will back a project that doesn’t demonstrate its worth. Therefore, you’ll need to crunch the numbers to prove that ERP will add value to your enterprise. To do this, you’ll have to calculate total cost of ownership (TCO) and return on investment (ROI). Several expenses will have to be factored into the TCO, not just the base cost of the software platform. You must also consider maintenance, customization, upgrades, consulting and fees.
Once you’ve calculated TCO, you can show how the benefits of ERP will outweigh the costs. Quantify the impact of your current company pain points. Do some tasks take too long to complete? Calculate the savings in productivity and labor costs that will ensue after implementing new software. Experiencing errors? Determine how much your ERP will help you save in fines, penalties and lost customers.
ERP consists of comprehensive modules, deep insights and automated workflows that can add to your bottom line. Calculating ROI and showing how these benefits will affect your specific processes will help convince executives and stakeholders to support an implementation. Additionally, buttress your calculations with success stories or data from potential ERP vendors. This information will further demonstrate how ERP improves productivity, customer relationships and decision making.
Aren’t we too small for ERP? We don’t have the resources for new software. How can we avoid going over budget? I still don’t see why we need ERP.
These are all questions and rebuttals that you’re likely to hear from business leaders. Considering some of the high-profile ERP failures, it’s understandable that they’d be hesitant. But the software has come a long way. Cloud computing has made ERP affordable for manufacturers of all sizes. Success rates have dramatically risen. Vendor resources and consulting firms simplify the implementation process. At this point, there’s no excuse for going without ERP. Make sure to anticipate arguments and demonstrate how project risk can be mitigated.
Another tactic is to show that not investing in ERP actually poses a bigger risk than an implementation. As your company and industry changes, your current IT infrastructure and strategies might get in the way of business growth. An Aberdeen report finds that businesses on the latest version of ERP performed better in several areas, including inventory accuracy and customer satisfaction, than those with outdated or no ERP system. In your business case, detail how choosing to go without ERP could be a costly decision for your organization.
An enterprise technology investment shouldn’t be taken lightly. That’s why you should present a compelling ERP business case to ensure executives and stakeholders understand why and how the software will add value to the company.
One vendor you’ll want to consider as you develop your business case is Epicor. Epicor has been designing leading ERP solutions for manufacturing for nearly half a century. One study found that Epicor ERP generated 264% ROI, providing substantial savings and process improvements to a wide range of businesses.
Datix is an Epicor Gold Partner committed to executing ERP projects from start to finish. Our certified consultants will do everything we can to maximize ROI and drive business growth. Contact Datix today to speak with one of our ERP experts!