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Ken Jacobsen, The TM Group Inc.

Report: ERP Return on Investment Improving


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There's good news for businesses currently using enterprise resource planning software and an encouraging statistic for companies thinking of adding such a system: The average return on investment from ERP is $7.23 for every dollar spent. This was the determination made by Nucleus Research, a firm that evaluates technology implemented in businesses for both vendors and end-user businesses. While this number is an average and not a guarantee, it's still an encouraging statistic for organizations of all kinds that are using ERP or want to begin doing so.

There are a number of reasons why return on investment has risen for ERP systems during the past few years, according to Nucleus Research. One of the biggest has been an increased investment from vendors into developing enhanced functionality and additional modules that help turn a base ERP platform into a complete system for managing the unique needs at a given business. The release of new iterations of ERP software from the companies that make them is also helping to boost effectiveness and improve return on investment. Microsoft, for example, has recently released significant updates to its Microsoft Dynamics NAV platform for small and midsize businesses, as well as its CRM platform oriented toward sales and marketing efforts.

Technology news provider ERP News pointed out that there's been a 33 percent increase in average return on investment in the past 5 years. This is an impressive rise. While not all businesses can automatically expect such results from upgrading their current systems or adding a new one, there's an obvious increase in terms of positive outcomes relating to ERP use. One of the most important developments is that more people at businesses are becoming familiar and comfortable with ERP, leading to less reliance on an IT department to make software selections. This improvement in knowledge among companies allows leaders to incorporate input from a variety of sources, including IT staff as well as employees in sales, production, accounting, supply chain management and other departments.

Taking advantage of these developments
To guarantee a good return on investment, businesses have to make some important decisions as they begin seeking out ERP partners and determining exactly which system to use. The first step is often finding areas of operation that are inefficient and could be improved by enhanced informational sharing and better organization-wide visibility. Once these deficiencies have been documented and defined, a consensus needs to be reached as far as the type of solution to be used. As familiarity with the concept and results of ERP continues to spread throughout the business world, this step will likely become easier than in past decades.

With an internal decision made, it's easier to seek out the right ERP partner and the specific platform that provides the best fit for internal needs. Because vendors are driving many of the improvements in the current marketplace - and because there are a limited number of ERP options - finding a high-quality partner to help implement, troubleshoot and optimize an ERP system is crucial. One factor to consider when seeking a partner is industry-specific experience. When vendors have existing clients in the same industry, it's easier to suggest effective, relevant add-ons and modules to go along with the base system. Targeted experience also comes into play with technical training and employee education, as vendors can help clients with unique issues related to a specific market or vertical. With ERP software showing an average improvement with return on investment, it's important for interested businesses to maximize their potential for success.

The Right Partner

If you are looking to implement a new ERP solution, it is very important to choose the right partner. The TM Group has been a leading provider of CRM and ERP solutions since 1984 and would love to work with your organization. To learn more about The TM Group please visit our website or contact us via phone at 248-489-0707.

by The TM Group, Inc.

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