To determine an ROI for the ERP project, you can consider the following areas that typically hold waste that is improved by an integrated enterprise system:
- Reduction in Inventory levels (cost of inventory and carrying costs)
- Improved Inventory turns
- Reduced order cycles (both in procurement and in sales order processing)
- Reduction in labor to prepare financial reporting
- Reduction in labor for duplicated data entry points
- Reduction of customer service costs if data is visible to customers on the Internet (ie. a customer service portal)
Gather the costs associated with continuing to do these items inefficiently and compare that to the cost of the new system. You might be surprised on how the ERP will pay for itself in the first year!