Quantifying the business benefits of a potential ERP implementation is something that most organizations struggle with. It requires an understanding of the your organizational vision, and an ability to foresee the ways technology can drive higher revenues and lower costs.
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. 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 customer service 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, desired business processes and 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 ERP software, then you can start to quantify business benefits. This exercise helps identify 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. You can spend all the time you want quantifying business benefits, but none of this will matter unless you set targets, hold people accountable for those targets, measure post go-live results and remediate benefit shortfalls. This should all be defined as part of your ERP benefits realization plan, which is just as 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 rather than being used as a mechanism to drive actual results.
While you may be considering a new ERP system for good business reasons, those reasons often get lost during the chaos of implementation. Taking the time to define expected business benefits will ensure that your ERP implementation aligns with your organizaitonal vision.