SMB ERP Projects: Don't Forget the ROI

April 1, 2009 from Computerworld – “The average SMB ERP implementation takes 10 months, though the installation work continues long after the go-live date hits, according to recent Aberdeen Group survey data of 920 SMBs. The financial costs can be just as significant: SMBs with less than $50 million in annual revenue will typically pay nearly $300,000 for ERP software and services, while larger businesses (revenues between $100 million to $250 million) will spend $1.4 million, the survey data states.

"Given this level of investment, one would think ROI would be top of mind for most companies,"

180 View – Not surprisingly, we read a lot about ROI (or lack of it) these days. We agree with the article that organizations should determine the ROI of an IT investment. But if ROI was the sole criteria, the investment would usually not happen assuming unbiased building of the business case. But there are other compelling reasons for the IT investment involving intangible benefits and risk mitigation.

The biggest problem with ROI and business case is the underlying assumptions. Be skeptical of the assumptions if the person responsible for the business case will gain by the IT investment. Make sure that the assumptions really make sense and have some supporting documentation.