Shulou(Shulou.com)06/03 Report--

The relationship between return on investment (ROI) and ERP is usually cited, but this is not always the case. It doesn't matter whether you choose a new ERP system, part of implementing ERP, or using ERP-reviewing ROI is the best way to ensure that ERP adds value to your business.

Step 1-start with the opportunity

Quantify where you think you can achieve a return on investment.

In which aspects of your business do you suffer the most, and how much money can you save by eliminating this pain?

Where do you think you can add value, will the new process provide more opportunities for your market, or are your customers willing to pay extra service for it? How much extra profit will this bring to your business?

Contact your ERP vendor and where do their other customers get a return on investment? What makes them feel obvious pain or gain in your area of business?

Internally and externally, can you ease the pain in the supply chain, such as through automation or integration? Will this translate into a supplier price reduction or a customer price increase?

Step 2-give priority to return

Once you know the size of the potential benefits, you need to prioritize. Realize that you can't do it all at once. Classify the list according to its importance (potential benefits) and difficulty.

Step 3-Planning and delivery

Set up a project team to deliver revenue. Identify key "value seekers" in your business-individuals with the right personality (communicators, negotiators, champions, analysts) to lead the team. Then, make sure you have the experts you need in each identified area of return.

List the goals that the project needs to achieve and make them SMART (specific, measurable, achievable, relevant, time-bound).

Develop a realistic plan to ensure that you do not overestimate the time it will take for the team to implement the changes or underestimate how long the activity will take.

Support the plan from the top, create a high-level steering committee to monitor the progress of the plan, and make the ROI plan the central theme of enterprise operations.

Step 4-celebrate success and identify more

Now, measure your success against your original goals. How much return on investment has been achieved? How much more can you achieve? What do I need to do to get the salvage value?

Reward people who are involved in generating a return on investment and ensure that they are recognized in the business they deserve. Make sure that all employees in the business know what has been achieved. Share metrics and show off to stakeholders: employees, customers, suppliers, how much return on investment you have made in your industry.

Plan your next step and return to the original priority list. Are there any items in the "do now" list that you can do now? How much value will that be realized? Return to step 1-how much has your business changed since you last checked the process and the ERP system? Look for new opportunities for return on investment brought about by this difference.

In short, to achieve a return on investment, follow these four simple steps. And repeat it.

Determine the return on investment opportunity

Give priority to return

Planning and delivery

Measure, celebrate and start over

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