Any Implementation finally boils down to the question, is the implementation live up to its standards and did it achieve its goals... Basicall the question that is asked is what is the Return on the investment.
ROI is nothing but the ratio of the project’s benefit to the value of project’s cost. However the problem with calculating ROI is that we cannot account for the intangible benefits and costs. For
So the alternative method choosen by some companies to see the value of the implemention is the Net Present Value (NPV), and Internal Rate of Return (IRR).
It is difficult to calculate the returns from an ERP implementation because the company perceives of profit in different way. However some of the beneifits of switching to an ERP system is the savings the company enjoys in operations, the improvements in the management of inventory, the real time data availability, better customer visibility .
The other intangible benefits enjoyed are improvement in the processes, efficient and effective work environment, reduced cycle time, increased accurancy etc.
As per Peerstone Survey 63% companies achieved some form of benefit. 39% of these companies achieved ROI. Successful implementation have shown to have their ROI target before launch of the ERP project. Companies that use ROI have shown more success than others..
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