ERP Return-on-Investment by saving time for employees is one of the suggested methods to calculate your ERP implementation Return-on-Investment (ROI).
Researches
Several types of research showed that employees during working hours spend a significant amount of their time in time-consuming tasks like searching for information whether in documents (electronic or hardcopy) or asking their colleagues for information and this shows in the below reports:
IDC reports that workers who manage, create, or edit documents for a company were spending up to 2.5 hours per day searching for what they needed. Other surveys find that the time spent searching for information averages 8.8 hours per week. Also, IDC’s Information Worker Survey says workers spend 5 hours per week searching for documents.
McKinsey reports that employees spend 1.8 hours every day searching and gathering information.
Gartner says that professionals spend 50% of their time searching for information, and on average, take 18 minutes to locate each document.
As information is a valuable element to run the business and activities inside the company, and as a conclusion from the above researches, on average searching for information takes around 25% of the employee time.
ERP Return-on-Investment by saving time calculation
To give a calculation example, we will assume that we have a company with 10 full-time employees and every employee’s salary is £1,000 per month.
Based on the researches above, the example company employees spend 400 hours per month searching for information and that costs the example company £2,500 per month.
If the salaries and number of employees did not change during the year, then the cost of the example company will be £30,000 per year for the time spent by the employees searching for information.
So, using ERP solutions like iX ERP can save the example company up to 35% of the cost related to lost time in administrative tasks, by saving the employees time searching for information. That presents the value of £10,500 per year for the example company.
If the ERP annual subscription value for the example company goes around £10K per year or less, so the ERP Return-on-Investment is achieved in the first year of the ERP implementation.