The ROI of Cloud ERP Implementation

ROI Return On Investment SaaS Cloud ERP

ROI is the key determiner in deciding which investments give the greatest return. In other words, ROI is a comparison of the expected benefit of a particular investment measured in monetary units, compared to the cost of that investment in the same monetary units.

The lack of efficiency and the great limitations of spreadsheets, basic accounting software, and even paper make running a business at optimum performance a little difficult. Without a proper ERP solution, businesses are struggling to get a greater ROI.

The ROI Benefits of the Various Aspects of ERP Are Greater Than You Might Think

The reduction of costs for IT is massive. There’s an anonymous technology company using a cloud-based ERP software that saved more than $100,000 in hardware and software purchases and avoided hiring at least three full time employees for its IT department.

Cloud ERP allowed companies to replace outdated accounting packages like QuickBooks, which, while inexpensive to purchase, were costly in maintenance, integration, and manual data entry.

There’s A More-Than Noticeable Increase in Productivity.

Sales and marketing teams are better able to serve customers. If you have a sales call and want to update the customer database, you don’t have to write a note and remember to do it when you get back to the office; that is very inefficient. You actually can just make the direct changes right then and there, adding notes within the ERP for everyone to see!

Moving from paper, spreadsheets, and accounting packages to cloud ERP solutions helps companies speed up collections, reduce the quote to cash time, and increase the accuracy of their billing. Monthly or yearly financial close has been simplified as well, due to financial consolidation and the ability to more easily access and manage financial data.

Decreasing inventory levels through better inventory planning reduces costs. Inventory management systems improve the tracking for movements. This is not only an important factor, invoice accuracy can reduce collection cycles, which in turn improves cash flow.

The Statistics of ROI for Cloud-Based ERP Solutions

Even though cloud ERP only represents 2 to7 percent of the total ERP market at present, the revenues it generates are expected to double by 2015 compared to 2010. Nucleus calculated the ROI achieved by using cloud ERP, and noticed most companies reported a higher than 150% ROI. One client of Netsuite’s said, “There is information about the customer and what they ordered. They can see history without tracking people down and see a complete picture of sales, ordering, and fulfillment. That has made us 20 to 30 percent more profitable.” Can you imagine how much this benefits customer service? The answer, according to this company, is 20 to 30 percent more profit.


The ROI for a cloud-based ERP system heavily outweighs what a cluster of non-integrated, lacking software offers. Not to mention, the returns are far better on a cloud-base than an on-premise ERP software. With the right ERP system, businesses are able to properly track and measure all of the various benefits of a proper ERP system to see their returns grow continually.