Did anyone do a real ROI analysis after implementing?

I’m a little curious if anyone did a rigorous year of year ROI analyis a year after implementing. If so, what were your results?

It seems like we ballpark this figure a lot. I know that the nature of the calculation makes it inherently an estimate, but depending on our standards we can get a more or less accurate view.

[Poll]

Sadly I think very few companies do this. In general they are happy they got there, and feel that things are better now.

The driver for performing a full ROI needs to be suggested by the NSC BEFORE signing the contract, and they should push the customer to make this a deliverable. This wll help everyone keep on their toes during implementaton, adn make sure that everythign is done for a reason. I do try to get clients to do a PIR, but often because it was not part of the initial project suggested by their NSC, it never gets done, and the budget just isnt there, thus its hard to show the value, i.e. What is the ROI in investing in an ROI. Of course it helps the NSC to get stronger, and it helps the next customer, but how does it help the current customer?

In fact it helps them a lot, and they should do it.

But I am very interested to see what the feedback is on this topic. Maybe even add a poll. If you want I can add one into your post.

Microsoft were very hot on this a few years ago and it was to focal point of the sales message, however whilst they could quote figures and the benefits etc it was used purely as a selling tool. Whilst many customers will know the tangible investment the intangible is not recorded accurately, then there are also differing reasons for the growth in the investment and whether the implementation is phased or not. Then there are the measures for the return, what constitutes them, but more importantly if the measurements can be taken prior to the implementation to measure post implementation (given an appropriate settling in period). I am of course talking about the more detailed definition of ROI rather than the straighforward (kind of) calculation based upon the time element required to claw back the investment.

That may look as though I am anti-ROI, however I am very pro-ROI. The simple reason is that the customers always seem to concentrate on the small parts that are not working, rather than the massive savings made from the implementation. Now whilst I agree the small parts need fixing the customer should also sit back and be pleased with the parts that are working - they made the right decision regarding the partner and the software. The project team can also present the ROI elements back to the board to justify the financial and time investment in the project.

A good idea that gets lost in the frantic fight for a successful live and then the adjustment period to the new software prior to ploughing onto the next project, phase II or just taking a breather!

Off topic I know, but that reminds me of an implementation I was involved in once, where ROI was the driving force for going with NAV.

http://wiki.dynamicsbook.com/index.php?title=ROI_through_Staff_reductions

A perfect example of the ROI factors knowing the details and therefore having no incentive to implement.

I was involved in a quick web based retail site a few years ago where we implemented painfully in 10 weeks. One element of this was to automate the website orders directly into Navision. Two weeks after live 6 of the 8 order processing staff were let go, they no longer needed people to manually key the website orders! In this case they had no input to the project, were not aware of the details, so did not prevent live. However the owner did, and the increase in accuracy and reduction in overhead created a very fast quick cut over ROI, so he was VERY keen.

Whoa, harrowing stories. Actually, though, I think it points out a part of the problem with the angle that folks often have when looking at ROI. Frequently, they see an implementation as cutting costs (jobs) and that’s where your return is. I think its far preferrable to think of it as increasing productivity.

It’s just that increased productivity is difficult to measure.

Here’s what I think people believe they can do when doing ROI: well, the system cost me $x, and I fired $y, so therefore I made a good/bad decision.

Here’s what I think they should do: my business has been growing at this rate per employee, and now it is growing at that rate per employee. Here’s how my competitors grew/per employee over the same time period (to account for market variances). This was my marginal increase. Multiply by size of business and compare to the cost of the system.

Also, instead of judging growth per employee, you could judge growth per use of capital so that why you capture not just how it has made your employees more productive, but how you use your assets more effectively (inventory decisions, etc.)

Could you add a poll, David?

Is that OK, not sure what options you wanted?

That’s perfect David. Thanks.