Implementing an enterprise resource planning (ERP) solution has a far-ranging impact for your business, and in many times, unexpectedly.
Many of these effects are quantifiable, but some are more difficult to measure than others That’s what a return on investment (ROI) analysis is for. However, in the end, you will still need to use your best judgment depending on the circumstances of the findings.
It is understood that choosing an enterprise resource planning system represents a considerable investment in time and resources, which is why estimating your return on investment (ROI) is necessary before selecting, buying, and implementing an ERP solution. This will help reduce overhead, which is something that most companies can never have enough of.
But, as we will discuss, ROI goes more than just cost savings or reduced overhead. Here’s why.
How is ROI understood within the context of implementing ERP systems?
Return on investment doesn’t necessarily automatically mean to be in the context of reducing expenses and experiencing financial gains.
A return on investment can be quantified in terms of gains in efficiency, productivity, employee and customer satisfaction, or overall improvement as far as processes, or with compliance to regulations. It can be quantified in terms of how much of your business goals you have achieved thanks to your ERP implementation.
That’s why ROI should not be merely thought of in terms of financial gain. Granted, financial gains will eventually rise, but there are certainly other ways in which success can be quantified as far as ROI is concerned.
Here are some ways ROI can be quantified in the context of ERP solutions implementation.
- Agile, streamlined processes. The benefit of enjoying streamlined, efficient processes can be achieved by collating and consolidating data across departments into one solution, and drive revenue and savings as a long-term effect.
- Data integrity and consistency. Optimized processes are a product of solid, consistent, and accurate data across the organization as it is unified under one roof. Synergies are achieved by removing the need for every other department within your organization to store their information assets separately.
- Enhanced productivity. Consistently accurate and up-to-date data removes the hassle of tedious manual work from employees and management, allowing them to focus on their core functions. This makes them more productive by reducing the extra work.
- Minimize redundancy. A central database means minimal redundancy. That’s because only one unique transaction ID is needed for one customer, without the need to store it in compartmentalized departments, and thus preserving the integrity of the record.
- Greater transparency. As earlier discussed, having a single record available in a centralized database helps all employees within your organization the status of the order, regardless of what its status is. This means greater transparency as to what the progress of the order is, and allowing you to focus on what needs to be done.
Why is measuring ROI important?
Business is rapidly changing every moment. There are continually new, emerging tools and technologies, as well as a constantly-evolving set of media that are forcing organizations to constantly rethink their strategies to adapt to new realities and increasing expectations.
For instance, in the realm of marketing, companies have shifted almost entirely from traditional media towards a near-total focus on digital media thanks to the advent of social media.
The same is true for literally every aspect of your business. Now, while some people may say that running concurrent online marketing campaigns at the same time is possible and made easy given the tools and techniques at ready disposal, it’s a little harder to tie the return on investment on the campaigns that were launched.
The truth of the matter is that not everyone is trained to calculate ROI, regardless of whether they are marketers, engineers, product development teams, and everything in between – which should raise a red flag considering the constant pressure businesses face to measure the return of every dollar they spend and ensure it works towards adding to the bottom line, instead of taking away from it.
That said, ERP systems can help you quantify the ROI on your organization’s performance across departments. And we’re going to show you how you can do just that with Odoo.
How does Odoo help businesses measure ROI?
Let’s admit it – tracking, monitoring, and reporting statistics can be among the rote, boring parts of an employee’s job, whether he or she is working in human resources or marketing – but it remains one of the most important functions, because it quantifies the work your employees are putting in.
How many of your employees can quantify the business opportunities they generated in the last marketing campaign? How much revenue did your organization generate based on the advertising campaign you ran on social media? These are questions that need asking.
The reality is that not a lot of your employees will be able to answer this from the get-go without doing their research.
Thing is, if you can’t answer these kinds of questions for your organization, and not know how your teams and campaigns are performing, you will have already wasted a lot of time and resources unknowingly.
Fortunately, Odoo’s ERP solution has this tool called Link Tracker – which is available from its Website module that helps you stay on top of your online campaigns, regardless of how many channels or how many campaigns you are running. At a few clicks, your marketers will be able to see which marketing strategies are bringing in revenue and which ones aren’t.
Odoo’s Link Tracker helps you stay on top of everything, from the first opt-in, to sealing the deal on your online storefront.
Odoo doesn’t stop there – there are countless ways you can employ the use of consolidated, consistent, and accurate data to garner insights and unique views to find out which investments have been paying off, which ones are slacking off, and which ones you need work on.
This is largely due in part to Odoo’s flexibility as an ERP solution that handles everything from website creation, online marketing, supply chain management, inventory management, project management, billing, and accounting – you name it.
ERP solutions, like Odoo, were practically made for this purpose. That’s why you should consider investing in them.