SAP ERP to achieve faster Return On Investment (ROI)

Return on Investment (ROI) is a performance measure used to evaluate the efficiency of an investment or compare the efficiency of a number of different investments.

Before investing in any solution or project, you want to know what the return on investment is likely to be and that it’s worth your time and money. You wouldn’t be an astute finance leader if you didn’t. ROI can be measured in different ways – hard and soft returns.

Faster Return on Investment

ROI is a bit problematic particularly in terms of unquantifiable figures. But it offers a measure of success or otherwise of the project. ROI measurements help in many circumstances specially buy-in from project stakeholders, which enhances the chances of successful completion of the project.

Tech Point is a leading SAP Consulting and service provider for Enterprise Business Solutions. They specialize in SAP S/4HANA license procurement, implementation, installation, customization, training & support and integrating add-ons.

There is no standard method of calculation of ROI for an ERP project but a structured method of analysis is achievable. It may be too cumbersome and subjective to factor in intangible benefits. But these factors are important for creating an overall business case and in many instances, where ROI is not calculated, form a baseline objective for the project.

First step is to determine the cost of various components of the project such as consulting fees, license fees, modification and implementation cost, hardware cost, etc. Maintenance fees for a predetermined period (say for three or five years) should be added to arrive at Total Cost of Ownership over the specified period. The estimated expenditure should be time-phased over the period, used to calculate TCO.

ROI is a bit problematic particularly in terms of unquantifiable figures. But it offers a measure of success or otherwise of the project. ROI measurements help in many circumstances specially buy-in from project stakeholders, which enhances the chances of successful completion of the project.

Faster time to value

• Move your IT at the speed of your business with standard best-practice content for all key business functions
• Rapidly deploy SAP S/4HANA Cloud across the organization, with the possibility of a two-tier deployment approach for subsidiaries and divisions

Increased automation with a digital assistant  

• Achieve zero-touch processes with the SAP S/4HANA digital assistant
• Drive actions and decisions at the speed of thought with machine learning

Rich user experience

• Reduce training time and enable fast user actions and decisions with the solution’s intuitive interface and responsive design
• Improve productivity and employee buy-in with ready-to-use applications

The cost reduction savings are easy to measure such as:

• Reducing overall operating expenses
• Increasing inventory turns or billable hours
• Accelerating response time for returns or recalls
• Minimizing Accounts Receivable days outstanding

Following are key factors of the SAP ERP Return on Investment:

• Better, faster decision making.
• Improved customer service
• Improved cash flow
• Staff retention
• Growth without the growing pains;
• Growing without the associated people cost
• Customer goodwill
• Inventory holding Optimization

Some other SAP ERP ROI benefits that are not so easily calculated can include:

• Improving staff retention through ease-of-use and productivity
• Effectively fixing errors in a timely and economical manner
• Centralizing documentation online for constant availability of a single source of truth
• Making faster decisions due to increased visibility