11 ways to monitor your ROI in ERP

When planning an ERP project, one of the first tasks is to measure the return on investment (ROI)( check our Free ROi calculator) that new technologies and efficient processes can bring to your organization to make it more productive.

At the most basic level, more productive outputs will result in reductions in operating, inventory, and labour costs thus providing the most direct return on investment. However, there are also advantages that are indirect.

You can streamline your ordering process, eliminate physical inventory, improve production quality, and make scheduling more efficient. Improving operational data access allows for more precise material preparation, manageable reporting, new dashboards, and better, data-driven decisions. It will also increase customer loyalty, improve supply chain coordination, enhance delivery efficiency, and other factors that can all contribute to ROI.

Dynamics365 ROI

UNDERSTANDING THE VALUE OF ERP ROI

Dynamics-365 erp

If you are wondering what’s the ROI for Microsoft Dynamics 365, let us help you. The ROI will serve as the basis for the rationale of your project. It will assist in the availability of apps and will have areas of focus and assessment, helping you to determine the progress of your transition.

FORECAST THE COSTS OF YOUR ERP:

The quest for possible ROI begins with these 11 key process areas when your company sets out to make the business case for a better or entirely new ERP solution:

Financial Management

 

Management and the entire company benefit greatly from greater trust in financial statements and analysis, faster information access, quicker closing and period-end operations, and efficiencies generated by the reduction (or elimination) of outside-the-system spreadsheets.

Forecasting

 

Comprehensive Sales & Operations Planning (S&OP) skills include greater knowledge and analysis. It is possible to more accurately predict demand, make more informed decisions, rely on trends, and, most importantly, manage sales demand more quickly, precisely, and proactively. Besides, it is easy to navigate market transitions, volatility, and economic shifts.

Inventory Management

 

Efficient forecasting and better visibility into sales demand allow more effective inventory management, lower carrying costs, and better visibility into slow-moving and dead inventory. 

Pricing and Margin Management

 

Efficient pricing tools boost margin/profit analysis, allowing for better strategic positioning and, when combined with Product Lifecycle Management (PLM) analysis, providing information that can be used to manage product portfolios better and drive higher profitability.

Product Development

 

PLM enables successful management of product lineup and mix, as well as R&D expenditures, and the identification of products that no longer fulfil the company’s strategic objectives.

Production Management

 

Better capacity planning is made possible by enhanced production management capabilities and the ability to perform a thorough analysis of production bottlenecks, routing times and material movement, staff utilization, plant and equipment utilization changes, maintenance schedules, and system uptime.

Quality Management

 

QM tools enhanced product output visibility, RMA root cause analysis, visibility into rework operations, and better information on raw material quality supplied component goods and third-party services.

Sales Management

 

Customer Relationship Management (CRM) capabilities allow detailed sales performance analysis and provide valuable insight into customer purchasing trends, customer demographic data, sales activities, and sales performance.

Supply Chain Management

 

Improved inventory management allows for improved management of the entire supply chain, resulting in lower logistics costs, more efficient supplier/vendor management (and higher performance), shorter lead times, and data that can be used to help strategic procurement and vendor negotiations.

Warehouse Management

 

WMS technologies increase speed and accuracy by using high-efficiency and control pick-up/put-away, barcoding, and routing.

E-Commerce

 

Enabling direct-sales platforms and enhancing current e-commerce performance and customer experience provides a major competitive advantage and costs savings. A strong e-commerce capability leads to increased customer loyalty, repeat purchases, improved forecasts, and higher margins. Besides, re-organizing warehouse operations to support efficient pick-pack-ship will result in better efficiency, especially in a less-than-case-order setting.

The next step is to measure the return in these – and other fields, which is a major challenge. An outside ERP advisor like DFSM can assist with market benchmarks by implementing Dynamics 365 marketing ROI.

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