Why You Should Justify the Benefits of an ERP System to Stakeholders

By khameleon

Let’s face it. It can be difficult to justify all of the benefits of a modern ERP system to stakeholders and key decision-makers who don’t understand its importance.

That’s why your ERP justification needs to clearly outline the reasons that having a state-of-the-art system will be beneficial for your organization.

But first, to deliver an effective presentation to your stakeholders, you should know some of the key components to include in your ERP justification.

The Necessary Components of ERP Justification

With a thorough understanding of how your organization will benefit from an ERP solution, your stakeholders will wish it was implemented sooner.

You’ll need to incorporate the following components in your presentation to give them a comprehensive outlook of how the system will transform your business for the better. Here’s what you should do before your justification:

Assess the Current Business Environment

An extensive analysis of the current processes and environment of your business is necessary to determine which departments and accounts will be affected by the implementation of the ERP system.

As an important first step, this assessment will establish credibility for the system. By investigating any challenges that may arise with the ERP, you can take precautionary measures to ensure a smooth transition.

Your stakeholders will be more inclined to support its implementation if the background research is thorough.

Determine Any Workflow Challenges

If you have documentation on how your current workflow is interrupted by manual processes, poor user experience, or segregated data, then mention it in ERP justification.

When you highlight these pain points, you create a need for a solution that an ERP system can provide. Your stakeholders will see evidence that your current system is deficient, and you have a way to improve your business’s efficiency.

One way to gather this information is by allowing employees from each department to anonymously provide feedback on the challenges they currently face that hinder their productivity. Specifically, you want to focus on data that directly refers to the processes that the ERP system will solve.

Show the Expected ROI

This is the part of your ERP justification that will (hopefully) excite your stakeholders. After you agitate the pain point, you want to show them what the future of the system’s implementation could look like.

To demonstrate how implementing a new ERP system is advantageous, you should outline the tangible and intangible benefits that your organization will expect to see.

The Tangible ROI’s

  • Increase in sales
  • Decrease in labor
  • Enhanced prediction capabilities
  • Improved invoice management

The Intangible ROI’s

  • Improved visibility across the organization
  • Optimized workflows
  • Efficient onboarding for staff
  • Enhanced customer service

In addition, Nucleus Research discovered that for every dollar spent on ERP, the average ROI is $7.23.


Average ROI from ERP implementation is $7.23 per dollar


Estimate the Cost of Implementation

Once you’ve analyzed the business environment, determined the current challenges, and discussed the expected ROI, it’s time to reveal the estimated cost of implementation.

Your stakeholders will likely use this aspect of your ERP justification as the main point of reference for their decision to implement the system.

The cost of the system varies on a number of factors, including company size, number of users, and the specific prices of the ERP vendor. As long as you emphasize how the benefits will outweigh the cost of implementation, your ERP justification will be completely valid.

Highlight the System End Goals

Next, you should provide a blueprint for what the ERP system will achieve within your organization. Moreover, what is the ultimate goal that this system will accomplish?

The specific goal you have in mind should take everything into account: business environment, workflow challenges, predicted ROI, and implementation cost.

For example, if your goal is to automate your business operations for optimized efficiency, then you should highlight how the ERP system will streamline all of your processes in one place.

Now that we’ve gone over the key components you should include in your ERP justification, let’s delve deeper into the key benefits of having a modern ERP system.


4 Key Benefits of a Modern ERP Solution

Now, we have already mentioned a few benefits in this article. However, it’s important to continuously emphasize the importance of having an updated system throughout your ERP justification presentation.

Here are the benefits you should keep in mind.

  1. Increased Revenue

    With a fully integrated system, you can expect to see an increase in revenue in your business. The advanced financial tools that a modern ERP system provides will give you an idea of how to make your processes more efficient. This saves you time and money.

    Also, depending on the vendor you choose for implementation, most updated ERP solutions feature forecasting capabilities. This will allow you to predict your business performance and allocate the resources to the areas that need them the most.

  2. Enhanced Visibility

    When all of your important information is in the same place, your organization’s visibility will improve. With improved visibility, you’ll be able to easily share information internally and externally.

    Subsequently, this enhances internal communication. So, you’ll avoid the confusion of working around your system by working directly with it.

    No more headaches of being the middleman between employees and department heads. With an ERP system, you’ll know that the right people are getting access to the right information.

  3. Better Reporting

    Better reporting and faster insights are crucial for managing data instantaneously. With an integrated ERP system that produces reports and key performance indicators from real-time data, you can ensure that you are always getting the most accurate information available at any given time.

  4. Improved Customer Experience

    Great businesses provide great customer experiences. Since your customers are the ones keeping your business alive, their satisfaction should always be a priority.

    The right ERP solution will integrate customer relationship management tools that help your business attract and retain loyal customers.

    Now that you know the benefits and key components to include in your presentation, your ERP justification should be a breeze.

Need More ERP Justification Tips? Look No Further

Take control of your business by upgrading your ERP to a cloud-based software. Not only will it save you time and money, but it will also improve your customer relationships.

At Khameleon, ERP solutions are our specialty. If you need any help convincing your stakeholders or decision-makers why you should upgrade to a modern ERP system, we’ve got you covered.

Schedule a free demo today to see how we can best serve your business with our solutions.


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