April 2010 from IBM – “To determine the ROI, calculate the total costs of your solution by including components such as software, hardware, upgrades, support, maintenance, training, customization, implementation services and more. Compare those costs with the tangible benefits the investment will provide and you will have your ROI. Tangible benefits could be in the form of process improvements enforced by the ERP that have helped your company improve its efficiency, or a rise in revenues or profits because you were able to identify new opportunities.”
180 View – We recently received a link to this article so we have assumed IBM thinks it’s still current thinking. The inconvenient truth with the article and with so many vendors’ promises is that most ERP systems don’t have a positive ROI. However there can still be compelling reasons to invest in a new ERP system without having ROI (such as the old system is no longer supported) and there can be intangible benefits that can justify the expenditure. Also when adding up the costs, don’t forget to include internal costs as IBM has conveniently not specifically included above.