How do you calculate the Return on Investment (ROI) on an ERP System?

Traditionally a ROI calculation on software implementation is based on the knowledge that a business will see instant tangible benefits from the new software as soon as it is installed. However, as an ERP solution usually means an improvement in business processes and procedures this can take some time to become measurable or even apparent. Therefore whilst it is easier to calculate the cost of an ERP solution, it is difficult to put a figure on the expected efficiencies and business improvements, as several gains from installing and ERP are vague and difficult to measure.

This does not mean however that is isn’t possible. It’s not only possible but imperative and this analysis is a crucial part of the decision making process. A properly done ROI investigation builds a business case for the implementation. 

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