Como você calcula o período de retorno de seus projetos de BI e ERP?

In my opinion, there are many principles available to address this. The basic NPV, IRR and other mathematical formula provide an indication of what to expect. In addition to this we also have modern numerical and financial formulas which provide more indepth analysis. The key aspects to measure in these aspect in the in-tangibles. There are many aspects that cannot be explained by numbers or they are beyond sophisticated formulas to explain. These include aspects like, what happens if this system is down for a day. What is the comfort level this system brings to the users? What is the disruption if this system ever needs to be replaced? Who will this affect beyond us in case there is an unplanned downtime and more. These are valuable.

The advent of SaaS solutions has muddied the water a little here. In the old on-premise days, payback period was easily calculable. However, now we have SaaS solutions, where the OPEX costs are much higher than normal (and the initial CAPEX costs much lower), a longer total cost of ownership (TCO) assessment period has to be considered. Example: we would expect on on-premise ERP to payback in 3(ish) years and we would measure the TCO over 5 years. For SaaS ERPs we are more likely to measure TCO over 10 years and carry out a side by side cost analysis between SaaS and on-prem. Makes the whole calculation of payback period and TCO much more complicated.

Payback Period Definition: The payback period is a metric used to determine how long it takes to recover the initial investment in a project. It answers the question: When will the total revenue from the project equal the total investment? Formula for Payback Period: The formula is straightforward: Payback Period = Initial Investment / Cash Flow per Year. The cash flow represents the revenue generated by the project during a specific time frame.

To calculate the payback period for BI and ERP projects, first define the project scope: Define Scope: • Objectives: Improved decision-making, streamlined operations, cost savings. • Deliverables: Fully implemented ERP system, KPI dashboards. • Costs: Initial setup, software licensing, infrastructure, training, maintenance. • Benefits: Cost savings, increased revenue, reduced operational costs. • Time Horizon: 3, 5, or 10 years. • Discount Rate: To calculate Net Present Value (NPV). Understand Payback Period: • Payback Period = Initial Investment / Annual Net Cash Inflows. Calculate Payback Period Defining the project scope is crucial for accurate payback period calculations.

The time frame matters. Strategically select the time frame for payback period analysis, considering factors such as project lifespan and expected benefit realization timelines. A well-defined time frame provides clarity on the duration over which benefits are assessed, enhancing the accuracy of payback period evaluations.

Cost Estimation: Identify all project expenses, including software licenses, implementation fees, training costs, and any additional infrastructure expenses. Benefit Calculation: Determine the expected benefits such as increased efficiency, cost savings, and revenue growth. Net Cash Flow: Calculate the net cash flow by subtracting expenses from benefits for each period. Cumulative Cash Flow: Accumulate the net cash flows until they cover the initial investment. Payback Period: The payback period is the time it takes for cumulative net cash flows to equal the initial investment. Be thorough in your cost estimation and benefit calculation to ensure accuracy in determining the payback period.

Estimating the costs of ERP projects requires a comprehensive approach to account for various factors. Begin by identifying the direct costs, including software licensing fees, hardware expenses, and implementation services. Factor in any customization or integration costs specific to your organization's needs. Additionally, consider indirect costs such as training, change management, and ongoing support. It's crucial to involve key stakeholders, including IT experts and department heads, to gather diverse perspectives on potential costs. Leverage historical data from similar projects, if available, and consult with ERP vendors to obtain accurate pricing information.

once the scope is clear, we move on to the cost estimation. This involves listing all potential expenses such as software licenses, hardware requirements, implementation services, training, and ongoing support. For example, for a Microsoft Dynamics ERP implementation, consider costs like consulting fees, user training programs, and any necessary infrastructure upgrades.

Employ dynamic forecasting techniques to anticipate potential fluctuations in project costs over time. Account for variables such as market trends, technology advancements, and organizational changes to maintain accuracy and adaptability in cost projections.

Die laufenden Kosten für Lizenzen, Hosting und Wartung basieren in der Regel auf dem mit dem ERP-Anbieter abgeschlossenen Vertrag. Daher können die Werte aus dem Vertrag übernommen werden. Es ist lediglich darauf zu achten, dass diese Kosten bereits während der laufenden Implementierung anfallen können.

To calculate the payback period of BI and ERP projects, divide the initial investment by the expected annual benefits. For instance, if the ERP project costs $100,000 and yields $25,000 in annual savings, the payback period is 4 years ($100,000 / $25,000). Estimating project benefits involves identifying potential cost reductions, revenue gains, and efficiency improvements. This can include factors such as lowered operational expenses, increased profitability from better decision-making, time savings from streamlined processes, and enhanced customer satisfaction. Collaboration with stakeholders is crucial for accurate benefit estimation.

This is a really well thought out point. I think a big part of this estimate depends on the industry for the organization that is implementing. Lets compare two industries. In Mining, the product is typically sold at a market price (depending on the material) and its one or two products. You know what you can sell and how much for. but your costs are highly variable. In distribution, there are lots of products and the cost of what you sell is known, but dont know "who is buying" and "what they are buying". So the benefit to a mining organization is how do I keep my costs down and ensure I limit downtime? The benefit to a distributer is who is buying my stuff and how can I identify how to sell more of it? Industry is key!

It starts at requirements gathering - every department. What is the transaction? How many? How long? Who does it? What's the error rate? What happens when we fail? Who else is affected? What's the downstream cost of that? How many fails a day/week/month/year? We then lay out a spreadsheet model (Highlight inputs because the CEO is sure to question that and want to put in his own). There's labor cost, time, there's calculations for cost with growth rate of X, X+10%, X+20% - and that's just the start. We've been refining this for over a decade. Then factor in average performance ramped via learning curve. Oh this happens pre-selection because we want to measure & report identified metrics and so on... so more to it than you'd think.

Establish clear metrics, benchmarks, and performance indicators to quantitatively assess the impact of BI and ERP projects on key business objectives.

Next, focus on the benefits. This is where we identify and quantify the potential gains from the project. Benefits might include increased operational efficiency, reduced manual processes, improved decision-making capabilities, and better compliance with regulatory standards.

For calculating the net benefits of your projects: Sum up all the expected benefits from the project over its lifetime. Deduct all associated costs, including implementation, maintenance, and operational expenses. The result is the net benefit, which represents the overall financial gain or loss from the project.

The formula is simple but determining the true benefits as well as making sure you calculate the full cost! When looking at benefits do not forget to consider risk reduction, compliance, and security as benefits. In the same way make sure you are looking at the full costs annually for licensing and maintenance during your time horizon as well.

After estimating the costs and benefits, calculate the net benefits by subtracting the total costs from the total benefits. This gives us a clear picture of the financial impact of the project. For example, if the total benefits amount to $500,000 over three years and the total costs are $300,000, the net benefit is $200,000.

To calculate the payback period for ERP projects, first, determine the total initial investment, including costs for software, implementation, and training. Next, estimate the annual cash inflows from cost savings or revenue gains due to improved efficiency and decision-making. Divide the total initial investment by the annual cash inflow to find the payback period in years. For instance, if the project costs ₹50 lakh and yields annual savings of ₹10 lakh, the payback period would be 5 years.

Payback Period = Initial Investment / Annual Savings Let's say your BI and ERP project has an Initial Investment of $500,000 and generates Annual Savings of $100,000: Payback Period = $500,000 / $100,000 = 5 years So, the precise payback period for your projects would be 5 years.

BI and ERP projects are different. ERP projects consists internal projects like sales, procurement, logistics, HR etc. However BI projects usually focus on one target, most probably top management primarily. While calculating Payback period, "Net benefit" is important and not easy at all. As an example BI benefits can be calculated via Version 1: (Actions taken daily incurred from BI usage) / (Daily reach, run or usage of BI) Version 2: (# Daily reach, run or usage of BI)/ (Number of existing Reports - Dashboards) Version 3: (# of report dashboard which run at least one time a day) / (# of report dashboard) Same can be implemented for ERP, but ERP benefit calculation becomes much complicated to calculate Payback Period.

To calculate the payback period for BI and ERP projects, start by summing up all project costs, including implementation, training, and ongoing expenses. Next, estimate the annual benefits, such as cost savings or increased productivity, and subtract the ongoing costs from these benefits to get the net annual benefit. Divide the total project costs by this net annual benefit to determine how many years it will take to recoup the investment. For instance, if a project costs $500,000 and yields $150,000 in net benefits annually, the payback period would be about 3.33 years. This simple calculation helps gauge how quickly the project will pay for itself through the benefits it delivers.

Evaluating the results involves assessing whether the payback period aligns with the strategic goals and financial constraints. If the payback period is too long, you might need to reassess the project scope or look for additional benefits to justify the investment

It's important to note that the payback period doesn't provide a complete picture of the project's value. It doesn't consider the net benefits beyond the payback period, profitability, or internal rate of return. Therefore, it's essential to use the payback period alongside other financial metrics and qualitative factors when making decisions about your projects.

Calculating the payback period for ERP projects involves determining the time it takes for the initial investment in the system to be recouped through the project's generated benefits. To calculate the payback period, divide the initial investment by the annual cash inflow attributable to the ERP project. The payback period is reached when the cumulative cash inflows equal the initial investment. It serves as a valuable metric for assessing the project's financial feasibility and gauging the time required to start realizing a positive return on investment. A shorter payback period generally indicates a quicker return on the ERP project investment, while a longer period may suggest a more extended time frame for realizing benefits.

Es importante tener en cuenta que el período de recuperación es solo una medida de rentabilidad y no tiene en cuenta el valor del dinero en el tiempo ni considera los flujos de efectivo más allá del punto en que se recupera la inversión inicial. Por lo tanto, es recomendable complementar este análisis con otras medidas de rentabilidad, como el valor presente neto (VPN) y la tasa interna de retorno (TIR), para obtener una imagen más completa de la viabilidad financiera del proyecto.