AFLERO

ROI for ERP

Common ERP ROI #1: Controlling Purchasing Spend

Common ERP ROI #1: Controlling Purchasing Spend

Consider the math…

Common ERP ROI #1: Controlling Purchasing Spend

Consider the math…

If an organization has revenues of $250 million, It is reasonable to expect it to spend, say, 65% of revenues to purchase materials, or $160 million per year

Common ERP ROI #1: Controlling Purchasing Spend

Consider the math…

If an organization has revenues of $250 million, It is reasonable to expect it to spend, say, 65% of revenues to purchase materials, or $160 million per year

What if that spending is not under control?

What if we are paying too much for materials?

Common ERP ROI #1: Controlling Purchasing Spend

Consider the math…

If an organization has revenues of $250 million, It is reasonable to expect it to spend, say, 65% of revenues to purchase materials, or $160 million per year

What if that spending is not under control?

What if we are paying too much for materials?

Potential ROI = Millions

How Can Purchasing Expenditure Be Controlled?

How Can Purchasing Expenditure Be Controlled?

1

We could pay list price and not shop between suppliers

How Can Purchasing Expenditure Be Controlled?

1

We could pay list price and not shop between suppliers

2

We could not negotiate a long term contract with better prices

How Can Purchasing Expenditure Be Controlled?

1

We could pay list price and not shop between suppliers

2

We could not negotiate a long term contract with better prices

3

We could pay a premium to place our orders at last minute

How Can Purchasing Expenditure Be Controlled?

1

We could pay list price and not shop between suppliers

2

We could not negotiate a long term contract with better prices

3

We could pay a premium to place our orders at last minute

4

Use AFLERO to control purchasing

Common ERP ROI #2: Controlling Inventory Investment

Common ERP ROI #2: Controlling Inventory Investment

Consider the math…

Common ERP ROI #2: Controlling Inventory Investment

Consider the math…

If an organization has revenues of $250 million, And it purchases materials of $160 million per year, it is reasonable to expect it to spread all those purchases out over the year so that at any given time it has, say, $15 million of materials in inventory.

Common ERP ROI #2: Controlling Inventory Investment

Consider the math…

If an organization has revenues of $250 million, And it purchases materials of $160 million per year, it is reasonable to expect it to spread all those purchases out over the year so that at any given time it has, say, $15 million of materials in inventory.

What if we could run the same business with less inventory?

What if we could make the inventory “turn” faster?

How can inventory investment be controlled?

How can inventory investment be controlled?

1

We could buy in huge volumes, in order to get a volume discount

How can inventory investment be controlled?

1

We could buy in huge volumes, in order to get a volume discount

2

We could bring material in a long time befre we need it (that’s easier)

How can inventory investment be controlled?

1

We could buy in huge volumes, in order to get a volume discount

2

We could bring material in a long time befre we need it (that’s easier)

3

We could just write of obsolete items as we find (buy) them

How can inventory investment be controlled?

1

We could buy in huge volumes, in order to get a volume discount

2

We could bring material in a long time befre we need it (that’s easier)

3

We could just write of obsolete items as we find (buy) them

4

Use AFLERO to control inventory

Common ERP ROI #3: Controlling Accounts Receivable

Common ERP ROI #3: Controlling Accounts Receivable

Consider the math…

Common ERP ROI #3: Controlling Accounts Receivable

Consider the math…

If an organization has revenues of $250 million, It is reasonable to want to get paid on time, so that if it offers, say, 30 days net payment terms, then at any given time its customers owe it $20 million in Accounts Receivable.

Common ERP ROI #3: Controlling Accounts Receivable

Consider the math…

If an organization has revenues of $250 million, It is reasonable to want to get paid on time, so that if it offers, say, 30 days net payment terms, then at any given time its customers owe it $20 million in Accounts Receivable.

What if Accounts Receivable is not under control?

What if customers are not paying on time?

Common ERP ROI #3: Controlling Accounts Receivable

Consider the math…

If an organization has revenues of $250 million, It is reasonable to want to get paid on time, so that if it offers, say, 30 days net payment terms, then at any given time its customers owe it $20 million in Accounts Receivable.

What if Accounts Receivable is not under control?

What if customers are not paying on time?

Potential ROI = Millions

How can accounts receivable be controlled?

How can accounts receivable be controlled?

1

We could decide not to bother with credit checks and just sell to everyone

How can accounts receivable be controlled?

1

We could decide not to bother with credit checks and just sell to everyone

2

We could decide not to bother customers about paying any overdue bills

How can accounts receivable be controlled?

1

We could decide not to bother with credit checks and just sell to everyone

2

We could decide not to bother customers about paying any overdue bills

3

If someone doesn’t pay us on time, we could just let it slide!

How can accounts receivable be controlled?

1

We could decide not to bother with credit checks and just sell to everyone

2

We could decide not to bother customers about paying any overdue bills

3

If someone doesn’t pay us on time, we could just let it slide!

4

Use AFLERO to control invoicing and collection

Common ERP ROI #4: Controlling the (Hidden) Costs of Process Breaks

Common ERP ROI #4: Controlling the (Hidden) Costs of Process Breaks

Consider the math…

Common ERP ROI #4: Controlling the (Hidden) Costs of Process Breaks

Consider the math…

If an organization has a break in one of its business processes (due to disparate/silo systems or other problems), it can bridge the break using either Manual data entry (extra people cost) or Automated interfaces (extra software maintenance cost)

Common ERP ROI #4: Controlling the (Hidden) Costs of Process Breaks

Consider the math…

If an organization has a break in one of its business processes (due to disparate/silo systems or other problems), it can bridge the break using either Manual data entry (extra people cost) or Automated interfaces (extra software maintenance cost)

How many extra non-value-added clerical people do we need?

How much extra IT cost for non-value-added interfaces?

Common ERP ROI #4: Controlling the (Hidden) Costs of Process Breaks

Consider the math…

If an organization has a break in one of its business processes (due to disparate/silo systems or other problems), it can bridge the break using either Manual data entry (extra people cost) or Automated interfaces (extra software maintenance cost)

How many extra non-value-added clerical people do we need?

How much extra IT cost for non-value-added interfaces?

Potential ROI = Hundreds of Thousands

How can the costs of process breaks be controlled?

How can the costs of process breaks be controlled?

1

Let’s hire some temps to re-key all the data (no errors please!)

How can the costs of process breaks be controlled?

1

Let’s hire some temps to re-key all the data (no errors please!)

2

Let’s hire some coders to write interfaces (no errors please!)

How can the costs of process breaks be controlled?

1

Let’s hire some temps to re-key all the data (no errors please!)

2

Let’s hire some coders to write interfaces (no errors please!)

3

Let’s buy a non-integrated ERP (and replace it in a couple of years)

How can the costs of process breaks be controlled?

1

Let’s hire some temps to re-key all the data (no errors please!)

2

Let’s hire some coders to write interfaces (no errors please!)

3

Let’s buy a non-integrated ERP (and replace it in a couple of years)

4

Use AFLERO to integrate everything

AFLERO has four common ROI opportunities

AFLERO has four common ROI opportunities

  • Negotiate Better Purchasing Spend

AFLERO has four common ROI opportunities

  • Negotiate Better Purchasing Spend
  • Improve Inventory Turns

AFLERO has four common ROI opportunities

  • Negotiate Better Purchasing Spend
  • Improve Inventory Turns
  • Collect Accounts Receivable On Time

AFLERO has four common ROI opportunities

  • Negotiate Better Purchasing Spend
  • Improve Inventory Turns
  • Collect Accounts Receivable On Time
  • Eliminate Costs Due To Business Process Breaks

AFLERO has four common ROI opportunities

  • Negotiate Better Purchasing Spend
  • Improve Inventory Turns
  • Collect Accounts Receivable On Time
  • Eliminate Costs Due To Business Process Breaks

... and many other types of ROI opportunities

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