![]() Also keep in mind that savings will not happen automatically, nor right away. Think positively but realistically. If your company is product based (for example, a distributor or manufacturer), you might envision a significant inventory reduction – but do your homework to understand what result is typical. Also consider the projected benefits when calculating your ERP return on investment, recognizing that those benefits will be realized over time. Remember that a key motivator to change systems is to add new functionality to remain competitive – so include a realistic estimate of upgrade costs for the legacy system.īe thorough. Make sure you have gathered each and every cost estimate: for acquiring the new system, getting it implemented, and operating it effectively. In many cases, new system operating costs will be less than existing system costs. ![]() To do this, you need to enumerate current costs to maintain your legacy system as well as future ERP upgrade costs. Look for cost differences between the legacy system and the replacement ERP system. Use a reasonable time frame for ROI analysis. To ensure your analysis will cover the full lifecycle of both costs and benefits, consider a time frame of at least five years.
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