8 min read
October 19th, 2024
Deciding whether or not to invest in a next-level accounting solution with enterprise resource planning (ERP) capabilities, is a big decision.
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Key Takeaways
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While the customization, in-depth features, and vast capabilities of Sage Intacct can revolutionize the way you manage and run your business, it is not an inexpensive product. So, businesses should weigh the costs and the benefits of purchasing and implementing ERP software before pulling the trigger to ensure positive outcomes that improve your business operations and your bottom line.
A cost-benefit analysis of ERP software that could potentially improve efficiencies across your organization is a fairly complex undertaking that involves a lot of research and forecasting to establish a reasonable estimate of the costs, benefits, and overall ROI of a big expense like ERP software. So, the process is best broken into parts.
First, you'll need to look at the costs of purchasing and implementing new software in your business. Sage Intacct offers individually designed packages of core accounting software, extended modules, and third-party integrations, so businesses must speak with a Sage representative about their needs and goals in order to obtain a quote for the software's total cost.
Read More: The Pros and Cons of Outsourced Accounting Services for Businesses
Beyond the basic price of the software to be purchased, you should consider the costs associated with deploying it in your business. This might include the acquisition of new equipment and employee training in addition to capital costs that might arise as a result of fitting the solution into your new business model. Additionally, integration and data migration will need to take place to synch your new software with existing technology.
Once the new systems are in place, there might also be costs associated with initial (and ongoing routine) system testing to ensure your business is successfully leveraging the complete capabilities of the software. Business owners should also consider the potential costs that could arise as a result of upkeep, reviews, and upgrades that might become necessary over time as a business changes along with its procedures and needs.
Estimating the benefits of an ERP solution is a more complex process than figuring out the costs because ERP software can potentially impact almost every aspect of a business. Plus, all of the figures you come up with for placing a dollar value on the benefits will be based on projections and estimates - and some kinds of benefits are difficult to quantify in terms of monetary value.
Start estimating the benefits by considering the following:
When considering the benefits of investing in an ERP solution, business owners must remember to measure these benefits over the long term because it is likely the software system will be in use and continue generating an ROI for years to come.
Due to the many estimates and assumptions that must be made, cost-benefit analysis is complex and difficult to get right. Plus, the implementation of an ERP solution doesn't occur overnight. There is a learning curve for employees and a "piece by piece" process that can take some time to complete. As a result, the full benefits of a powerful ERP solution won't be reaped overnight.
Read More: Mastering Sage Intacct: Your Comprehensive Roadmap
We recommend business leaders temper their expectations by bearing this in mind. For this reason, business leaders should be conservative with benefits projections and honest about the probable costs of implementing the software. Setting unrealistic expectations or goals for implementation can paint an actually successful implementation process as disastrous, impacting the perception of success.
Instead of producing a single cost-benefit analysis, business leaders should actually produce cost-benefit analyses for worst-case, best-case, and most-likely scenarios. This allows leaders to assess all possible outcomes of investing in ERP software and properly assess the risk before making a decision.
When implementing new software systems that are as far-reaching and all-encompassing as an ERP solution, having a flawless plan for roll-out and implementation is essential to maximizing success and ROI. The plan should include details of the technical processes that must be performed to transfer systems and data in addition to employee training, employee buy-in, and departmental roll-out. New systems should be routinely and frequently reviewed and checked to ensure accuracy, efficiency, and proper use.
Whenever possible, businesses should have systems in place for measuring performance before implementing an ERP solution to ensure the ability to measure and compare company-wide performance before, during, and after implementation.
To understand how Sage Intacct improves ROI through cost savings, you must be aware of all of the software's potential benefits. Depending on each business's structure, operations, goals, and industry, the potential benefits of Sage Intacct software can vary. However, there are some features and capabilities that impact all businesses in the same way, providing the following advantages:
All of the potential benefits of Sage Intacct can contribute to its ROI. However, these benefits are dependent upon the successful implementation of the software in addition to a business's ability and efforts to use the tools, features, functions, and capabilities provided by the software system and its countless integrated applications.
While it can be difficult to analyze the potential cost-benefit of implementing Sage Intacct in your own business, you can look at the success and stories of other businesses that have already transitioned to Sage Intacct as an ERP solution. Forrester Research conducted a study that looked at the total economic impact of Sage Intacct by closely analyzing and interviewing four businesses that completely upgraded their financial software stacks with Sage Intacct and its integrations.
With the study, Forrester generated a composite organization as a representation of the average experience and economic impact of Sage Intacct. This composite company generates $30 million in annual revenue, has 300 employees, and experienced 20% annual growth via acquisitions. Before implementing Sage Intacct, the composite company was using labor-intensive, inaccurate, and heavily siloed manual processes to gather data and generate financial reports.
Some of the study's key quantified findings included the following results over three years for the composite company:
The study also produced numerous benefits that were not quantified, including:
Overall the three-year quantifiable benefit to the composite company equaled $1.7 million and an ROI of 441% - a much larger figure than the 250% ROI advertised on Sage Intacct's website.
If you think your business could benefit from more powerful accounting software and seemingly limitless integrations for organization-wide data collection and resource management, we encourage you to consider implementing new technology and tools with a highly experienced team. The key to generating the best ROI from Sage Intacct software is understanding how best to implement and use it in your business.
At GrowthForce, our accounting experts are highly experienced and knowledgable in using Sage Intacct, helping businesses select the modules and integrations that will work for them, and establishing systems for leveraging this technology to improve their businesses. With outsourced expertise, you can take the guesswork out of performing a cost-benefit analysis of Sage Intacct for your business. We can help you determine whether the potential ROI of Sage Intacct is worth your business's money and time - and we can help you make the most of this versatile ERP software solution in your company.