"We believe that customers' continued success depends on obtaining measurable return from IT investments," SAP spokesman Andy Kendzie said in an e-mail.SAP recently rolled out a number of Value Engineering tools and services, some of which are available at no cost, for benchmarking system performance and developing business cases for new projects.
While the total cost of ERP ownership is important to monitor and optimise, focusing solely on TCO is no longer sufficient. Organisations must not consider ROI of ERP projects in order to justify continued investment and maximum benefits.
With the downturn in the economy, an imprudent reaction may and has in some cases been to stop any discretionary spending on ERP projects just when their cost-saving, operation improving potential is needed more than ever.
According to research carried out by the Aberdeen Group, many companies now feel compelled to make an investment in ERP as a necessary infrastructure to support their business. However, best practices for maximising the benefits from such a solution involve the measurement of the reduction in costs, improvement in schedule performance and customer satisfaction, and the ability to redeploy employees to add more value to the organisation.
The most regularly cited reason for not measuring ROI of ERP projects is that it is too difficult to measure. The most successful ERP implementations have clear objectives which should be easily quantified and measured so that full gains can be realised.
24% of SMEs point to a lack of tools to measure ROI, however, most if not all of the tools are available within the application for which the ROI is being measured.
The pressure to remain competitive in the dynamic, global economy forces organisations to consider the results-based approach where the question 'Will we see a return on investment (ROI)?' is central.
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