We hope you enjoy reading this blog post.
If you want Integrative to handle your IT challenges, click here.
How to Calculate ROI of an ERP System?
Implementing or improving your BPCS ERP solution can help your organization to:
- Minimize operational cost
- Boost productivity
- Provide features to automate tasks and save energy and time
But having a dedicated BPCS ERP system, which is also one of the most popular ERP systems integrated into your business operations, requires an extensive amount of investment.
The licensing, training, implementation, and maintenance can raise the total cost of ownership of an ERP system. So, does that mean you should not include powerful BPCS ERP solutions in your business workflow?
Of course not. Why would you want to remove a business asset that provides multiple benefits to your business right?
So, how can you measure if your ERP system is valuable to your business? How can you calculate the ROI of the ERP?
Don’t worry. We’ve got you covered.
We’ll discuss the simple steps and factors you need to follow to calculate the ROI of your ERP system.
So, without further ado, let’s get started.
Steps Involved in Calculating ERP ROI
The ROI can be calculated by comparing the implementation cost of the ERP solution to the benefits of implementing an ERP over a specific time.
The larger the quotient of anticipated returns of ERP divided by the ERP cost, the better it is for your business. You’ll have a better view of the productivity of your business and can take long and short-term decisions based on the calculation.
You need to calculate two factors to get your desired ROI result:
- ERP returns
- ERP cost
So, you’ll be able to calculate the ERP ROI in three simple steps.
- Calculate the ERP returns by estimating all the benefits your organization will get directly or indirectly.
- Calculate the ERP cost by underlining major and minor factors like hardware, maintenance, integration, and consultation costs.
- The last step is to divide ERP returns by ERP costs to get the desired ROI results.
The simple these steps sound, the reality can be completely different from calculating the ROI of an ERP system; you need to bypass multiple misconceptions and challenges.
To help you with this aspect, look at a few things you need to keep in mind before starting the ROI calculation process.
Factors Before figuring out the ROI
There are things you need to remember while measuring the ROI of an ERP solution:
Organization of data
You need to select and evaluate a large chunk of your business data to precisely measure your ERP’s ROI. You need to communicate and take insights from all the departments to ensure that the data is biased and consistent.
It can be a daunting task to collect accurate data to measure the ROI, but you need to take your time and get the best data sets for better and effective ROI calculation results.
Focus on Processes and People
Don’t jump into the technical aspect of the ERP solution; if you are looking for better ROI calculation and results from the ERP system, try to manage business processes and people effectively.
You need to understand how a BPSC ERP will improve your teams’ business workflow and productivity and the results these improvements will have on your business.
Let the professional handle all the technical elements of your ERP system and improve its effectiveness.
Understand the Effort and Time for ERP Implementation
Try to stick to real numbers and benefits for your ROI benefits. Estimate the project cost, time, and effort by consulting an expert in the industry to have a brief understanding of the ERP implementation.
You’ll have a better calculation analysis if you choose to associate with the top experts like Integrative Systems to handle ERP implementation and maintenance. We can help you understand all the nitty-gritty involved in the implementation process to have better ROI calculation results.
ERP cost Forecasting
One of the vital elements in your ROI calculation of an ERP system is forecasting the cost of the ERP solution. You can calculate the license and hardware cost of the ERP system easily, but there are multiple aspects you need to consider while calculating the entire cost of an ERP system.
From consultancy to SaaS subscription, you need to consider certain factors from user costs to maintenance. Let’s have a better understanding of these aspects.
The entire quote from your ERP vendor will be based on the deployment and modules your company requires. You need to answer a few questions before getting a brief estimate of your ERP cost.
- Do you want your ERP to be hosted on your local IBM i servers or cloud servers?
- The consultation and the vendor’s cost to implement and plan out the strategy to optimize an ERP system.
- Maintenance cost to stay completely updated with the latest advancements in the industry and ensure smooth functioning of your ERP system.
- Your employees’ training cost ensures you can extract most of the vital benefits from your ERP solution without relying on a third-party service provider.
These are some important things you need to consider to effectively measure the ROI of an ERP system and use it to its maximum potential.
But it would be best if you had experts to help you manage your BPCS ERP system most effectively.
So, who can help you with that?
Where do Integrative Systems Come in?
With a talented pool of system and technical experts with rich experience in managing and integrating BPSC ERP systems for organizations, we at Integrative Systems provide the best-in-class BPCS services.
We provide offshore application development and have proven support capabilities to offer you tailored BPCS ERP as400 software solutions for your business.
Our BPCS experts are skilled at improving growth, minimizing risk, enhancing operational efficiencies, and meeting all your desired results within your budget limits.
Use all the functionalities and benefits of BPSC ERP effectively with our help. We follow industry-standard procedures to provide solutions that deliver the best results for your existing or new BPCS platform.
We have professional strategists to plan out the strategy to integrate and maintain a pitch-perfect working environment for your enterprise. Integrative Systems follow a consultative-led approach that can provide you with a road map to achieve your desired outcomes.
Experience the best 360°end-to-end consultation and service in BPCS ERP from Integrative Systems.
Get in touch with our experts to further discuss your requirements – firstname.lastname@example.org.
Frequently Asked Questions
Q. What are the benefits of BPCS ERP?
There are multiple benefits of BPCS ERP for your enterprise. Here are a few:
Efficient collaborations: The BPCS environment’s architecture will help you instantly avail all the information related to multiple business tasks and take a well-informed action related to those tasks. It provides embedded social networking, which makes communication easier and faster. You will be able to improve the overall productivity of your business workflow to achieve desired results.
BPCS ERP functionalities allow you to maintain supply, manufacturing, and distribution processes and evaluate the business state. It allows manufacturers to ensure complete agility and efficiency.
You’ll not experience any hiccups with the performance and effectiveness of ERP solutions.
Different manufacturing model: The solution allows and supports multiple models, including batch, stock, lean manufacturing, repetitive, and engineer-to-order. There’s no limitation, and you can achieve your desired goals easily.
Q. Why choose Integrative Systems for BPCS services?
We have 20 years of domain experience and have served multiple multinational companies with BPCS ERP services. We have dedicated experts who can plan out to improve your effectiveness, operational efficiency with flexibility with different enterprise functions. There’s complete transparency in our communication, and you’ll not experience any lag with our project workings. You’ll be kept updated with all the implementation and execution processes at regular intervals. Our support team will be available 24*7 to solve all your problems and technical queries. We can provide support to the new and existing BPCS ERP platforms with equal dedication and quality. We also provide planning support for different enterprises to develop a strategy to transform your existing business workflow.
Q. Why are BPCS ERS services costly?
There are numerous reasons behind the high cost of the entire BPCS project. As it’s not a short-term goal-focused project, it’s a long-term goal-oriented project, so it requires a higher amount of effort and workforce. You need to perform it all, from the BPCS development and customization services to implementation and integration. You also need to maintain the entire system for its smooth functioning. With all the effort and time, the cost of the BPCS ERS solutions increases. But they provide considerable benefits to an enterprise to scale their business and climb the top of the ladder.