A group (and website) called Proformative provides a web forum (www.proformative.com) for “corporate financial professionals” (Controller, CFOs, etc.) that provides useful information to its audience about a wide range of finance-related topics from HR and Recruiting to ERP and Excel Shortcuts, and much in between. Proformative boasts of having over 100,000 registered members.
Recently, under the title “ERP Implementation Methodology Best Practices & ROI” (found here) several contributors voiced their opinions about what to expect from ERP. You can peruse the article yourself, but we thought we’d highlight a couple comments that caught our eye.
Bob Scarborough, CEO of Tensoft, Inc. listed 5 important things he thinks you should consider:
- IT Costs – It’s more than just the software, but still the easiest to count.
- Productivity Impact – Rectifying data input errors & redundancy are valid ROI components.
- Visibility Impact – When new systems provide more/better data access or velocity, it matters.
- Audit & Compliance Impact – Better controls & repeatable processes reduce audit costs.
- Risk Impact – How much risk is built into your current system? This cost is real, if tough to count.
Len Green, a Consultant at BT Partners suggests looking out 3 to 5 years for costs from day one. He notes that some improvements occur only after implementation, so allow for progressive improvements, not 100% gain in year one. He adds that software costs are only part of the story: additional staff during implementation and integration with other current business systems may affect overall costs. And don’t count headcount reductions that do not equal a whole FTE.
Emerson Galfo, CFO at C-Suite Services questions whether ROI is really the best metric. He cites Amazon as having invested heavily in technology since its inception for reasons including pursuit of market share or to support a business vertical. If they’d evaluated Amazon Fire solely in terms of ROI, it might never have happened. Yet it has contributed, he notes, “to a thriving Amazon ecosystem.”
And finally, this from Wayne Spivak, CFO at SBAConsulting.com adds: “Implementing a new ERP system that is well thought out in advance, with clear understanding of the pitfalls, the problems, the issues and the costs of both dollars and time will yield better (I’ll never say perfect or even great) results out of the box. We need to see larger pictures than dollar and cents on every investment…”