Be Smarter than Your Competitors: Why You Need to Calculate the ROI Before Committing to a New ERP System
What is an ROI?
A Return on Investment (ROI) is a profitability measure to assess the value and efficiency of the investment by looking at the return. It’s considerably a crucial first step that businesses take in identifying key benefits for their investment.
As a fashion business owner, what would I need an ERP system for?
Fashion business owners look for a fashion ERP software that can string all operation management (production, distribution, shipping, etc.) with one thread to increase efficiency and shorten various business cycle processes. Can’t decide if you need a fashion ERP? We have a short checklist curated for you. And in case you need help deciding what factors you need to consider when selecting an ERP system, check out our blog on “How to Choose the Right Cloud-Based Fashion Software”.
Why should I consider getting an ROI for an ERP software?
An ROI is essentially a cost-benefit analysis; you want to check to see how much profit you will be earning with your investment. Smart companies consider the long-term benefits, sometimes at least 5-10 years into the future. When conducting an ERP ROI, business owners should consider first is scalability.
Questions to ask yourself –
- When my fashion brand grows, does this ERP software have the capabilities to grow alongside?
- Will I need to switch to another software later and possibly “start over”?
- How much manual processes of my business can this ERP software eliminate?
In your answer to the first question, an ERP system that can grow alongside your company’s growth is significant. Don’t waste your time and money in an investment that you’ll need to scrap later because it doesn’t have the capacity for more users or isn’t compatible with the new direction of your company that requires more features for instance.
This leads to the importance of the second question- if you do need to switch to a different ERP software, you may need to re-train your employees or you may find that your company’s efficiency is interrupted for a period while your staff adjust to the new software; this will cost you valuable time and more money than you expected in your initial investment.
Lastly, you’ll want to assess how many manual processes can your ERP software eliminate to justify your investment. Compared, an ERP software is supposed to cut the time in your business management processes in half or more and increase the assets you’ll receive in your visible return rate.
Benefits of an ERP ROI
- Track your business growth at five or ten years interval
- Get an estimate to see how much your ERP will reduce costs (overhead, inventory, etc.)
- See how an ERP system will increase your sales in percentages
- Improve efficiencies in business management and production
Take Advantage of Our Free ROI Analysis
At AIMS360, we walk through with you how to calculate your ERP ROI at your earliest convenience. In just one hour, you’ll feel much more confident in taking the reins of your business and worrying about how to calculate an ROI will be a thing of the past. Moreover, we also help you assess your business processes and management system and see what areas of your business that can be improved.
