Software ROI: Much More Than Cost Savings

Software ROI

As a forward thinking MD you have identified a few areas in your business where you could make cost savings. Streamlining business processes, rationalising IT databases, reducing working capital tied up in invoices and stock and giving your people a single view of your customers to name but a few.

Although you can see a clear need for new software, how can you justify the spend and prove you are right to invest? In today’s terms, return on investment has evolved and we need to be thinking more about short term savings, longer term speculation and finally the ‘soft’ benefits of your investment.

Long-Term Benefits

For too long companies have believed that ERP is just about delivering software, but it is so much more than that. It is about a roadmap of business improvements that will grow with you over time. Providing you with the platform and flexibility to enable your business to change and grow over time, supporting not only your business process now, but also your IT strategy and expansion plans moving forward.

With changing regulations, IT teams and companies need a platform that will grow with them and with the changing external environmental. Enabling changes like SEPA to be quickly and easily implemented will help businesses not just to be competitive, but to survive.

Short-Term Benefits

Quantifying short term benefits is far easier as these are about the visible benefits an ERP solution provides. Measuring a reduction on the amount of dual data processing, a reduced amount of inventory you have to keep on stock or streamlined maintenance of multiple applications and databases are simple to qualify- but let’s face it, they become business as usual in a very short period of time, forcing us to think about the bigger picture.

Soft Benefits

These benefits are far less tangible to senior management, but will be felt by your people in most areas of your organisation – it is important to gain end-user feedback to ensure you measure the benefits of new software felt by your people. These include:

Reliability – The inability to access software can cost businesses thousands of pounds a year. Think of the BlackBerry melt down in 2012, and the multiple banking disasters that stopped millions of customers accessing their funds. Reliable applications and platforms to run them are a quantifiable benefit and should be qualified where possible.

High user engagement with software – Most software vendors will tell you that their software is ‘easy to use’ and they have an ‘easy to navigate user interface’ but user adoption is as much more than that. Make sure you bring your end users on the journey with you, get your people involved in the selection process, data cleansing, and testing and I guarantee you will have much more engaged end users.

Reduction in errors – This can be more about the cost of ‘doing nothing’, but still a measurable benefit with the right reporting.

Better customer service levels – This benefit comes through increased visibility of information, and helping your people gain customer centric access to information rather than user centric data silos. Customer attrition is easily measured and should be a key measure of success, as well as ROI.

Free your people up to focus on higher value tasks – This is simple, let your ERP solution do the menial tasks while your people focus on your customers. Engagement with the ERP solution is key here – simple access and user defined log-on and processes will help ensure that your people are utilising the solution to its maximum benefits.

Simple upgrade path – As with all software, new features and technology will come into the market place. Ensure your ERP Solution supports you now and in the future, not only with the basics but with add-ons that will make you easier to do business with.

Choosing an ERP solution is the first step on the road to making improvements across your business, I cannot stress the importance of setting out your criteria to measure success right from the outset, this will help you make the decisions that are right for you, your team and your business whilst giving you the platform to communicate upwards the rewards of your hard work. A well-chosen and implemented ERP solutions should be seen and used as the IT back bones for mid-market companies, and as an open platform to connect all of your business processes together.

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Benoit Gruber

Benoît Gruber joined Sage in 2008 and is the VP of Product & Alliances for Sage ERP X3. He is responsible for Product Management & Marketing for Sage ERP X3 globally, and is in charge of ensuring that the Operating Company (OpCo) teams are aligned behind the product strategy. He also serves as the Sage ERP X3 solution expert in relationships with thought leaders, analysts and press. Prior to working at Sage, Benoît worked for management consulting and technology services companies dedicated to ERP, Business Intelligence and new technologies. Benoît has also owned a company in Media and Publishing.