ERP Return on Investment (ROI)


A Comparison of Implementation Resources Versus Benefits and Impact

Process manufacturing involves a multitude of materials, suppliers, actions, and compliance aspects. The manufacturing industry is consuming more data and real-time actionable insights than ever before. The overarching goal is minimizing the risk exposure, ensuring resource availability, prioritizing waste management, improving response times, and quickly adapting to evolving regulatory requirements.

However, before implementing a manufacturing ERP solution, it is important to establish an economic case for the investment. Essentially, you need to compare whether there is financial and business viability in the time, cost, effort, and other resources that go into the implementation. In addition, you need to understand the cost of inaction to switch to a better ERP solution. Consider carefully whether you are paying more to use an outdated legacy system or one that is inadequate for your business needs.

Read on to learn more about the potential costs and benefits associated with manufacturing ERP ROI.

Establishing Financial & Business Viability for Manufacturing ERP Implementation

Are you stuck with a transactional legacy ERP system that fails to:

  • Offer real-time information?
  • Support fast decision-making capabilities?
  • Provide collaborative or social networking style features?

With inadequate ERP systems, the overall process inefficiencies, inflexibilities, and errors are likely to lead to lack of agility, inability to trace key metrics, and income loss due to scenarios, such as missed payments, wrong decisions, and so on.

A good ERP solution for your manufacturing business must deliver:

  • Streamlined processes and improved productivity
  • Greater information access and reliability
  • Intelligent data gathering and reporting

Regardless of the type of manufacturing process you are involved in, an intelligent manufacturing ERP solution can give you immediate ROI in terms of cost and productivity. It will also drive your digital transformation journey by enabling strategic business decisions related to resource optimization, inventory management, IT efficiency, and revenue and profitability improvement.

Typical Cost Factors for ERP Implementation

As business owners or key decision makers, you may have to weigh the operational and capital expenditure of a manufacturing ERP solution to establish the expected ROI. If your projected ROI exceeds the Total Cost of Ownership (TCO), it is easier to justify the time, effort, cost, and resources that go into the ERP system implementation.

Here are some of the typical costs to consider that can help you project the potential financial and business benefits of an ERP upgrade:

  • Acquisition cost (perpetual license versus Software-as-a-Service i.e. SaaS), including system deployment, supporting hardware, and infrastructure upgrades
  • Customization expenses to fit the ERP system to your business model and specific requirements
  • Testing and upgrades, including staff manhours for technical tests and the cost of adding extensions for improved system functionality
  • Consolidation and migration of existing data and information to the new system, plus any additional transitioning costs for retiring the old system
  • Workforce reorganization, training expenses, change management initiatives and ongoing support to staff.

How to Achieve Maximum Benefits and ROI

Choosing the right manufacturing ERP solution is key to designing efficient processes and delivering safe products that are traceable across the supply chain. Here are some ways of maximizing the benefits of your ERP system post deployment, while keeping costs under tight control:

  • Use quantitative data, as well as qualitative feedback from your ERP implementation team and key resource planning personnel
  • Identify and address the areas that require improvement
  • Enable the necessary changes for software development and improvements in people processes.

Explore the Innovative and Versatile SAGE X3 Manufacturing ERP Solution

A carefully planned and optimally customized manufacturing ERP solution, such as SAGE X3 can make your company highly streamlined, agile, and profitable. Get real-time insight and solid support for complex processes and transactions. Manage your business in a cost and time efficient manner on a global scale. Due to its intelligent, powerful, and feature-packed capabilities, the SAGE X3 manufacturing ERP system can be a solid enabler for any organization’s digital transformation journey.

The experienced team at Panni Management can help you build a number of key scenarios that help you make the right decisions for your organization. This includes a conservative and prudent cost-benefit estimate for investing in SAGE X3, as well as assessing the cost impact of not switching to a better ERP system.

Contact us to speak to one of our ERP solution experts at Panni Management today. We look forward to assisting you in your digital transformation journey.

Transforming businesses since 2009

For over a decade, Panni has helped companies transform their businesses to lead, innovate and be profitable. With the right combination of technology and experienced developers and consultants, we help companies with Change Management to achieve the organizational objectives. We believe in long-term relationships with our clients and provide top-notch support with fast turnaround times.

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