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By: Evin Davis

ERP Implementation: Calculate The ROI Before Going Ahead

Functional Odoo 14

With the turn of the century, the use of digitalization and tools allocated with it came into existence all over the world. Moreover, in the early years of the current century, the use of computers and electronics was booming as was the technology and the tools implemented in them. The use of software solutions which will simplify the life of the people as well as the offices came into existence. Today these software solutions run the world from the gadgets that you use to the advanced technologies used in the military as well as space exploration. The same level of innovations can be seen in the business environment too. Today most of the operations of business establishments, offices, and facilities are run with the help of management software as well as tools available.
Enterprise and resource planning software is one of the solutions which have been widely used today. Although the ideology of the ERPs was established during the end years of the previous century the dedicated tools on it were seen to be fully operational at the end of the last century as well as the early 2000s. Today the ERP solutions rule the business management market through its reliability in business operations, functionality and the user-friendly aspect of running the company in it have paved the way for this success. The ERP solutions can be the one-stop business management software as it has the capable tools to run the entire business from a single platform.
Implementing an ERP will be one of the huge maneuvers that the companies should be faced with as it's one of the big steps of transformation into a new phase of operations. Moreover, you are shifting the entire company operations to be run using software therefore, the employees and the staff should be trained and made adaptable to the newer form of functioning the company. In addition, you will require an expert ERP implementation partner or service provider for the same, because you and your employees will not be having the right expertise to do an ERP implementation with the help of manuals and implementation guides. Furthermore, you should ensure that the implementation partners are the best in the field and have the right expertise and a good track record on successful implementation related to your company's sector.
As per the statistics on ERP implementation all over the world, it is estimated that around half of them fail and there are numerous reasons for it. You can read the following blog where I have described why the ERP implementation fails?:
Now as you have read about why the ERP implementation fails you can read the following blog to understand how to avoid these implementations failures on ERPs:
This blog will describe how you can calculate the Return on investment on your ERP implementation before proceeding with it.
ERP implementations are costly and a time taking process therefore, it is the company managers as well as the executive responsibility to analyze the success rate as well as the percentage of profits the implementation can generate. Moreover, considering small and medium scale establishment the ERP implementation is on the much costlier side and the success rate of the return of the investment will be beneficial before proceeding with the implementation process. Calculating the success percentage and the return on the investments will provide you with an insight into the financial aspects of using ERP and the risk in the implementation. Here are certain aspects of how you can calculate the ROI on the ERP implementation for your company:
Consider the pricing aspects
The ERP pricing is based on your needs and the necessity of the ERP implementation to the company. The pricing will involve the cost of the software or the subscription charges on it. Support and maintenance costs involved for a time period of operations. Annual maintenance contract on the software and the packages which you need to subscribe for. In addition, the aspects such as migration, use of additional add ons for the operations, can be Odoo apps or other software solutions which should be integrated with Odoo.
The return on the investment can be based on the investment you should be doing on the ERP implementation. This can not only be company revenue as well as profits, it can be aspects of productivity on the company operations, employee satisfaction, smooth running or efficiency in functioning, and many more. Moreover, ERP is not a software solution that will amaze you with profits right after implementation but will take time and will be depicted with huge returns in a given time which is longer.
Calculate the viewable and the hidden cost 
The viewable pricing aspects were the ones that I mentioned in the absolve section but, considering an ERP implementation there are certain other hidden costs involved in it. A non-expert or a person who will not know about ERP will associate these hidden costs as miscellaneous expenses. However, these expenses do matter for a company as at certain times the implementation partner will not mention them in the contracts. Moreover, for a small or medium scale company, these hidden costs will come as a burden as they will be strict on their budgets.
Once all the above-mentioned aspects are being calculated, based on the specification and the insights provided by the implementation partner on the rates in which your company will be improved in terms of profits as well as products you will be able to calculate the return on investment. To know more about further things on what should you know before implementing an ERP in your company read the following blog:



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