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Why haven't more companies done a better job measuring their return on investment (ROI)
in enterprise resource planning (ERP) software?
What are some of the benefits of ERP software?
Why is it important to consider process improvements before choosing the appropriate technology
solution?
What is the most important element for the success of an ERP project?
Why does Omnion focus exclusively on the Oracle E-Business Suite?
What advantages does the Oracle E-Business Suite have over other solutions?
How can I measure ROI for an ERP project?
How can I get the people in my organization to participate in our ERP project?
What role should managers play?
Why should I outsource my ERP project?
What should I expect to spend on ERP software?
How long will it take to get our ERP system up and running?
Will I benefit from a positive ROI immediately after I complete implementation of my ERP software?
Why haven't more companies done a better job measuring their return on investment (ROI) in enterprise resource planning (ERP) software?
| There are many reasons, including the following: |
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Many ERP projects were implemented during the late '90s, when companies were
more interested in becoming Y2K compliant than they were in measuring ROI.
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Companies typically focused on technology, but ignored people and process issues.
As a result, they often failed to achieve a positive ROI. |
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Many of the benefits of ERP are difficult to quantify; measuring ROI can be complicated. |
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Some companies invested in ERP for reasons unrelated to ROI. For example, they may have wanted to replace out-of-date systems or to replace many systems with a single platform. |
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ERP software provides a foundation for ongoing IT development. Once ERP is in place,
it should be enhanced frequently. Such enhancements can provide a significant ROI. |
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What are some of the benefits of ERP software?
| ERP creates an environment for automating and improving business processes throughout an organization. As a result, among other things, it can: |
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Standardize processes
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Improve customer relations |
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Improve partner relations |
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Expedite time to market |
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Reduce operating costs |
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Speed order fulfillment |
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Control inventory levels |
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Create new business opportunities |
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Improve accuracy of information for orders, inventory, raw materials and other factors |
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Improve customer service |
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Improve management of working capital |
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Improve cash-flow management |
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Generate demand forecasts more accurately |
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Speed production cycles |
Why is it important to consider process improvements before choosing the appropriate technology solution?
Technology must be tied to specific project goals. Unless those goals are clearly identified in advance, the technology cannot be designed to meet the project goals.
What is the most important element for the success of an ERP project?
For an ERP project to succeed, it must have support at the highest levels of the organization. Without "C-level" support, a project may be abandoned or lower-level executives may try to have an impact on the project to favor their department or division. As the scope of the project expands, it becomes unwieldy and can no longer be supported. Without support at the highest level, the organization will be unable to sustain the long-term, enterprise-wide support necessary for the project's success.
Why Omnion focus exclusively on the Oracle E-Business Suite?
Omnion principal and consultants have many years of experience working with Oracle technology. While we believe other excellent ERP solutions are also available, we believe that Oracle is currently the best software for meeting the needs of most organizations.
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What advantages does the Oracle E-Business Suite have over other solutions?
Unlike other ERP solutions, the Oracle E-Business Suite is fully integrated, scalable and highly configurable. As a result, it can be used as easily by middle-market companies as it can by large companies. Because it is a fully integrated system, the E-Business suite is the only platform you'll need to manage transactions and information throughout the company. You can integrate sales, manufacturing, service, finance and other operations. Because it is scalable, you can start with just what you need today and add on as your business grows. You can buy just the modules that are most important to you and then add additional modules at a future date, based on your business needs and budget. Because it is configurable, it can be adapted for use by many different types of companies.
How can I measure ROI for an ERP project?
Start with statistics that show results from best practices in your industry. By baselining current processes against these best practices, you can determine which areas most need improvement. Once the ERP project is implemented and fine tuned, you can compare new results with previous results, then divide by your costs to determine your ROI. By comparing improvements with the best-practice benchmarks, you also determine any competitive advantages gained as a result of your ERP project.
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How can I get the people in my organization to participate in our ERP project?
First, employees at all levels must be educated not only about how the project will benefit the organization, but about how it will benefit them. They will also need to understand their role in the project implementation. Expectations should be reasonable and should be communicated clearly to employees. Frequent updates are important to reinforce your messages.
Employees should also be trained not only to use the ERP system within their department, but to understand how it integrates processes throughout the organization.
What role should managers play?Managers need high-level training. They need to understand the technology's capabilities, so that they have reasonable expectations and do not demand more than the technology is capable of providing.
Why should I outsource my ERP project?
Few middle-market companies have the internal capabilities to design and implement an ERP project. A typical
enterprise goes through the process only once, so the probability is great that no one on staff has ever managed an ERP project before.
In addition, an external consultant can provide an objective, non-political perspective and choose the ERP software that is best for the organization, based on pre-determined goals.
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What should I expect to spend on ERP software?
Depending on your company's needs, implementation of Oracle ERP software can cost anywhere from less than $100,000 to several million dollars. In contrast, Meta Group found that the average cost for ERP implementation, based on a survey of large companies, was $10.6 million.
How long will it take to get our ERP system up and running?
Meta Group found that it takes an average of 23 months to get an ERP system up and running. It typically takes another six months to a year after implementation is completed to work out any bugs and begin operating efficiently, although in some cases it has taken much longer.
Will I benefit from a positive ROI immediately after I complete implementation of my ERP software?
It is highly unlikely. The Meta Group study cited above found that the companies surveyed incurred a negative ROI of $1.5 million over a period of five to six years after implementation. With careful planning of process improvements and an adequate investment in training, a positive ROI can be achieved much more quickly, although probably not within the first year.
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