ERP project benefits estimate
ERP project benefits have been estimated ERP project team is often overlooked an important part. A feasibility study report, we often see the words, often "greatly improve efficiency," "significant cost savings" and other vague terms. If there are no estimates of project benefits analysis, then the business decision-makers on the ERP project's investment is a kind of impulse, or by virtue of a better vision of the project subjective assumption. In this way, the project would create many difficulties, the most immediate obstacle is to cut project costs and minimize investment, resulting in the project due to shortage of funds into a dilemma. So do the project revenue estimate is an important task for project evaluation.
Enterprise ERP project proceeds generally divided into two parts, one after the implementation of ERP projects to improve labor productivity gains, and the other part of the ERP project on-line after the direct cost savings into earnings. To improve labor productivity gains, the most direct and obvious choice is to cut down the number of working hours. We can use the time to be converted into income in the form of currency. That is, the time saved into a monthly accounting of a multiple of the standard working hours, and then multiplied by the ERP project the user's average monthly wage, the result is reflected in the form of money to improve labor productivity gains. After the ERP project on-line direct cost savings, I think that includes not only the savings in maintenance costs, purchase of supplies expenditures, updating equipment, overhead, etc., but also to be launched this project because of the state in order to encourage enterprises to such an act, made available to the enterprise Satyam enterprises of all kinds of preferential policies should also be taken into account a variety of benefits. The sum of the above-mentioned two kinds of benefits to an enterprise ERP projects total revenue. Then, according to the estimated project life cycle, will be in years to predict as the unit revenue of the project cash flow sequence this value for estimating the project preparation.
ERP project valuation
Our corporate ERP project should be based on its own characteristics, time value analysis during the project, to engage in systematic reflection is possible more accurate assessment. Therefore, with the difference between the above two estimates of the results obtained in accordance with discounted cash flow method to estimate its value can be quantified. Including discounted cash flow method commonly used indicator is the net present value (Net Present Value, NPV) and internal rate of return (Internal Rate of Return, IRR). Because we want the enterprise to assess the value of ERP projects, it uses the net present value method. The so-called net present value refers to the specific investment program of the present value of future cash flows and the present value of future cash outflows for the difference between. Only when the net present value is positive, companies can consider whether to invest. Specifically, we get through the cost evaluation of the cost of ERP project, through the benefit assessments to be ERP project benefits, and assess the benefits with ERP after subtracting the cost of ERP assessment methods converted into present value by discounting (discount rate of return according to the project's requirements the rate of exchange) that is the value of ERP projects.
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