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Our upcoming ERP Boot Camp is in Southern California in December. In these intense, three-day ERP training sessions, we typically advise attendees on how to quantify the potential business benefits of their enterprise software initiatives.

Quantifying the business benefits of a potential ERP implementation can be tricky, and is something that most organizations and teams struggle with. It requires you to understand the vision of your organization, and to foresee the ways that technology can help drive higher revenues and lower costs – something that doesn’t come easy if you don’t do this for a living.

With this in mind, here are a few tips to quantify the potential benefits of your ERP project:

Start by defining the goals and objectives of your ERP implementation. Long before you start evaluating potential ERP systems, you should be thinking through the ways that technology can drive quantifiable enhancements to your business and its financial results. For many of our clients, they are selecting and implementing new ERP software because they have to – either because the vendor no longer supports the system, or because the organization can no longer scale for growth with the existing systems. However, this alone isn’t a good enough reason. Executives and their project teams need to go one step further and define specific ways that a new system will improve their business, whether it be inventory reduction, increased efficiency gains, better service to customers or a host of other potential business benefits.

Base your business benefits on your business requirements. It is impossible to define and quantify business benefits without first understanding your current business processes, your future or desired business processes and the corresponding business requirements. Once you have a clear sense of your current operational pain points and how those pain points can be effectively addressed by enterprise software, then you can start to quantify the business benefits. Oftentimes, this exercise will help identify the multitude of inefficiencies and opportunities for improvement, which can all be translated into the business benefits side of your business case.

Don’t forget to define how you will realize business benefits as well. You can spend all the time you want quantifying business benefits, but none of this will matter or come to fruition without setting targets, holding people accountable for those targets, measuring post go-live results and remediating benefit shortfalls. This should all be defined as part of your ERP benefits realization plan, which is just as important – if not more important – than the actual definition of business benefits. Too often, we see considerable time and money spent on quantifying potential benefits, only to see those business cases collect dust on a shelf rather than being used as a mechanism to drive actual results. Business cases should always be used as a tool for managing those results.

At the end of the day, you are probably considering a new ERP system for good business reasons. Too often, those reasons get lost during the chaos that ensues during implementation. Taking the time to carefully define expected business benefits will ensure that your ERP implementation is one of the relative few that is implemented on time and delivers actual business results.

Learn more by registering for our ERP Boot Camp on December 9-11 in Anaheim, CA.

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