In our previous post we looked at two key ROI components when evaluating the implementation benefits of an ERP system in your business. We created that post, and this, for the benefit of a particular client, but then we felt the information was worth sharing more widely. Today we follow up with four more ROI areas to review when looking to cost justify an investment in ERP.
3. Morale matters. The attitude, energy and satisfaction of the team (i.e., their ‘morale’) matters too. While not a hard cost per se, consider the value of a team member whose job is made that much less tedious if ERP and a PC can relieve them of the worst parts of the job. Tedious, repetitive typing and tracking fall into this ‘drudgery’ category. While harder to quantify, the staff will tell you that there is value in making jobs more interesting, challenging and rewarding.
As a side note, ask yourself: Does your staff do a lot of grunt work in order to give the bosses what they want in the way of reports, information, etc.? And is it possible that effort is not universally recognized or appreciated? Do they know how hard it is for you to give them the information they need to run their business? There’s a morale issue inherent in that consideration as well.
4. Time counts. Count time. How much time does your staff spend chasing down details… following-up on orders… “expediting” (i.e., special-rushing orders, or following up with customers on “When’s my order gonna’ ship…” or, “We’re tracking that order now…”)? Over time, as you gain better, more proactive control over your schedules, shipments, etc., you can start to diminish the time spent “catching up” to customers, or their complaints, their shipments and their issues. If you count the hours spent in these completely non- (or even counter-) productive pursuits, you’ll realize not only considerable cost-savings, but also improved customer service. “Expediting” should be the exception, not the rule.
5. Scattered silos of information. The ability for all the right people to get the right information in timely fashion, on their own, is critical in fast-paced, high-growth environments (like yours?). Consolidating critical business information needed to make the right business decisions – accessible to all – into the fewest possible containers (i.e., into a single ERP system), is a worthy and time-saving goal. You want to strive for fewer disjointed, disparate spreadsheets and more centralized record keeping and sharing. While more difficult to calculate, consider: What is the collective cost to the firm of having data spread across so many people, and not always available to those who need it? ERP represents an investment in a strategic repository for all kinds of meaningful data that is meant to be shared across the organization.
6. Customer responsiveness. While this benefit will come later in the implementation process, the ability to respond more quickly to client requests (single repository of information)… the ability for many people to have the same “view” of the customer record (CRM, accounting)… and perhaps farther down the road, the ability to create some kind of “customer portal” (for customers to check their own order status, for example) are all examples of potential customer service improvements. They will not come right away, but rather gradually, over time, and with deeper investment in your system. But all are possible, and the result should be an improvement to both customer service and to top line sales, in the long run.
We’ve presented in these two posts a few key areas to think about, and as best as possible, to try to quantify into labor-dollar-savings or efficiency improvements, as well as some thoughts about the value in customer service. Your numbers will be unique to you, and will no doubt extend beyond the guidelines above. Our tips are meant to be just a start, an aid to your own thought process about the deep and lasting value of process improvements and ROI. Now it’s up to you.