Dispelling The Myths About ERP – Is It Possible To Get Quantifiable ROI From An ERP System?

Posted by Fergus Gilmore, Managing Director on March 31, 2014

ERP Return on investment

Client case study - Consulting firm achieves positive ROI

A simple Google of “ROI from an ERP system”, will return a plethora of mixed opinions on this subject. It’s fair to say that ERP systems are not always viewed in a favourable light, and off the back of some horror implementation stories often carry a bad reputation. In a new series of blogs, I hope to dispel the myths surrounding ERP systems and show you definitively that adopting an ERP system purpose built for your industry will be a positive investment for your business.

In this first blog I’ll focus on proving that return on investment from an ERP system is not a mythical notion, but an achievable reality. When I first meet organisations, large or small, the first questions I am inevitably asked are ‘How much will this cost? How long will it take to implement? And when will we see the paybacks?’' Fair enough, implementing an ERP system is a significant investment for any business. But when should it become a consideration for Professional Services companies? If your aim is to grow your business but also service your clients to an excellent standard while having visibility across the business then an ERP system should be considered.

How to prove ROI

My advice would be to first benchmark your current situation with only your most important KPI’s and set realistic targets. The reason ROI analysis has fallen into some disrepute in recent times is that projects often have over ambitious speculative returns forecast, which make the end results difficult to justify. For example you could argue that improvements in CRM technology can help you win more new business. However as we all know there are many different variables involved in winning new business and the outcome is binary (i.e. you either win or you lose), so I wouldn’t advocate including that KPI in an ROI analysis for CRM. I like to focus on tangible, cashable returns, for example improvements in aged debt which are incontrovertible.

Case study proof

Don’t just take my word for it when it comes to achievable ROI. Steve Slade, the Financial Director of Buro Four, a 100 man consultancy firm has been using Deltek’s ERP purpose built for project-based organisations for 7 years and has positive results to show for it. In this short video, Steve shares his experiences on using the system and how this has enabled Buro Four to more accurately price their client projects, manage profitability and deliver business information in real time. Therefore resulting in some impressive figures equating to 2% more turnover for Buro Four - watch the video below to find out more.