Page 15 - Logistics News - November December 2022

ENTERPRISE RESOURCE PLANNING

A study by Deloitte showed that for first-time realistic return on investment (ROI) targets for the
buyers of an ERP, the price was the most important investment before the system is adopted. These
factor. However, second-time buyers had learned targets should align with the organisation’s overall
an important lesson: the level of relationship and operational and digital strategies.
support with the vendor became most important.
Where ERP saves money
It’s true that high-end, innovative ERP solutions ERP selection is key to a successful implementation
packages still carry an expensive price tag on them, of an affordable yet effective system. SYSPRO’s
but that shouldn’t matter as each deployment findings also reveal that the average cost of owning
should be custom-tailored for your specific business an ERP system is approximately 3-5 percent of
requirements. You are not just buying a piece of annual revenue for most organisations. Instead
software, you are buying a critical business system of paying for different systems to handle various
that will underpin your entire business for years or parts of the business, an ERP system handles many
decades as it grows and changes. changing parts of the process simultaneously,
reducing overall staff workload, costs and system
So, what about the hidden costs? expenses. It is therefore critical to view an ERP
The implementation of ERP is influenced by several system as a business investment instead of an
variables that differ significantly from one company expense.
to another, costing time and money. Research shows
that organisational (i.e. human) issues, which include ERP systems generate vast amounts of data,
governance structures, resistance to change and which, if integrated and utilised effectively, can
process redesign challenges, are the most common become one of the organisation’s biggest assets.
reason for ERP budget overruns. However, many of This could include optimisation of supply chains,
these issues can be mitigated with a comprehensive customer profiling and other business process
change management plan. insights. It is forecasted that 65 percent of
businesses will use AI-based ERP strategies by the
Another cost-related issue to consider is the end of 2022 to gain a competitive advantage.
right deployment model for your business. The
three primary options are on-premise ERP, hosted/ If you look at the common ERP misconceptions,
managed service ERP and cloud ERP solutions. it is clear how most companies might be missing out
Gartner has already openly predicted that 47 percent on a true opportunity for growth. From finance to
of organisations utilising cloud ERP will move their inventory, manufacturing, reporting and more, ERP
systems to the cloud over the next five years, and gives you a single source of truth that is used across
while it is certainly a trend for organisations, this all the areas of your business to consolidate disparate
doesn’t mean that cloud ERP is necessarily the right systems and eliminate manual processes.
model for your business.
There’s no doubt that ERP is a big investment and
Knowing why you require an ERP solution, as with any other large-scale investment, it brings
whether it’s a new model, an upgrade or a legacy a number of risks. However, with proper planning
replacement model, is the key to making the most and a rigorous procurement approach, together
of your overall ERP investment. SYSPRO’s latest with appropriate strategic input, it is possible to L O GI S T I CS NEWS
research shows that after investing in an ERP system, plan a project to the budget that does deliver high-
businesses on average experience a 16-month value outcomes and exceeds client and executive
payback period. This is why it is important to set expectations. •

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