7 Steps to Building a Business Case for ERP

October 13, 2011 from Supply Chain Management Review – “To create a business case for an ERP investment and select the right ERP option, organizations should follow a 7-step process:

  1. Describe the business challenge
  2. Assess the potential benefits of the ERP investment
  3. Assess the potential costs of each ERP option
  4. Assess risks and issues that might arise during the implementation
  5. Recommend the preferred solution
  6. Describe the implementation approach
  7. Measure potential and actual ROI…”

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180 View – The article gives examples of challenges, benefits, costs and risks associated with ERP.  However anyone following the advice given is likely to fail making a business case to any CA or CPA. Accountants have been trained as auditors to not believe anything unless there is credible support for the numbers. So don’t throw numbers around without stating your assumptions and backing it up with credible support. As well accountants recognize the time value of money so you want to do a cash flow over at least 5 years and base ROI on Net Present Value. Finally most business cases have a negative ROI – look for intangible benefits that are linked to Critical Success Factors – what an organization must do well in order to be successful.

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