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Use an ROI Analysis to Make the Case for Sage X3

Published on: May 03, 2017

Sage X3If you need to build a business case to boost support for Sage X3, one great way to support your request is through an ROI analysis. ROI stands for “return on investment.” Management likes to see figures that support new technology initiatives. An ROI analysis can help you build the case to purchase and use Sage X3.

A Forrester poll of IT decision makers shows that 93 percent agree that providing a written business case to justify new work or software requests is very important. In a manufacturing environment, where every penny counts, completing an ROI report may make the approval and adoption of Sage X3 easier.

What Is Sage X3?

Sage X3 is a powerful enterprise resource planning tool that enables your organization to track, monitor, and report on all the important business metrics you need. From supply chain management to warehouse management, sales and service, marketing and accounting, all groups within your company will benefit from using Sage X3.

For a detailed look at how Sage X3 works, IWI Consulting Group presents a free virtual tour. Just visit our website and take the tour for details on Sage X3. You can use this information to enhance your ROI and business case proposal, too.

Create an ROI Analysis

Even if the decision makers in your company are convinced of the value of Sage X3, building a business case is helpful. You can use the business case exercise to identify milestones, metrics, and the rationale for including Sage X3 in your company’s business software. You’ll also be able to draw a direct correlation between business needs and Sage X3, which can be used as a guideline for future implementation steps.

A traditional ROI analysis usually focuses on both the business and IT aspects of adopting new technology. For a manufacturer, it’s helpful to take it a few steps further. The risks, uncertainties and strategic impact of Sage X3 offer more insight than a simple ROI analysis.

To conduct your own ROI analysis, Forrester’s Total Economic Impact methodology may be useful. TEI measures the solution’s costs, benefits, and the flexibility against risks. This combination should be equal to the TEI of the investment. It’s a more insightful formula that takes into consideration numerous factors that impact your organization.

The TEI framework includes:

  • Quantifying benefits: What are the benefits derived from the solution? These benefits may be both quantitative and qualitative, but if qualitative, a number must still be assigned to it to work in the TEO calculations.
  • Reporting costs: What are the costs of implementation? Costs include both the initial investment in software as well as training, support, and other implementation costs.
  • Evaluating flexibility: How will the new software be used? Is it for one department or many? Will it make an impact in one area of your company or across many areas?
  • Adjusting for risk: Risks include support and training, so factor in the time and/or investment needed to manage these risks.

Among these factors, both evaluating flexibility and adjusting for risk are unique to the TEI method.

By balancing the costs against three important factors, TEI provides a more realistic picture of a project than a simple ROI calculation.

Forrester conducted an ROI analysis on Sage X3 and found it to provide 177% ROI. Now that’s a number that’s sure to impress even the most hardened skeptic. Take a look at this infographic to get more details. If you are ready to calculate your own numbers, contact IWI and ask for the TEI Calculator.

Although no one framework can accommodate all costs and benefits, TEI represents one of the most realistic methods of determining a project’s worth. You can use this method or a simple ROI calculation of costs measured against benefits to build strong support for your Sage X3 project. There are so many benefits and few risks to implementing a Sage X3 that your calculations should convince any skeptics that it’s time to add or change your ERP system.

IWI Consulting

IWI Consulting Group helps businesses gain insights into their operations, inventory, and profitability. We provide software and support for a wide range of industries throughout Canada. For more information, please visit IWI Consulting Group or contact us today.