Short Term VS Long Term Value of SAP/ERP Implementation

The decision to implement a SAP/ERP system can be daunting, especially when weighing the cost against the perceived value. In this conversation between D4M and Eric, they delve into the differences between cost and value in SAP/ERP implementations, shedding light on the benefits that arise after the initial implementation phase. 

Jean: Can you go through the differences between the cost and the value when it comes to a SAP/ERP implementation – for people who are on the fence?

Eric: That’s a very interesting conversation. Particularly because there has been, over the last 30
to 40 years of experience of the ERP implementations where the value has beenvquestioned.

Eric: The value ofvthe ERP implementations, and SAP specifically, comes from this realization: right after the implementation, when the standardization is done, that means that when you have a standardized solution the value of being able to have a user from plan A, to go to plan B and being able to support them in a day-to-day operation or in the troubleshooting situation, that value is huge.

Eric: And it’s huge at the operational level. And the response and customer satisfaction is huge.
And that is realized on Day One after the implementation of this SAP ERP solution. The measurement of that one, is basically measured over the time because of the ability to maintain the day-to-day operation without any interruption or impact.

Eric: In the midterm, the additional value that happens is by being able to enable ongoing improvements into the plan, process and solutions.

Eric: And some people question the ability to do quick changes. Having an environment of ongoing
improvements leads to a global standard solution. But, I will argue with those people because you will have, in this case, in the scenario that we talk about 60 plants (in 60 months), where 60 plants will be able to give better feedback of an ongoing improvements that can be implemented in parallel to a specific template and that means it’s something that makes sense within the global organization could be available for Plan A implemented, and that specific process and solution could be rollout to whoever is interested in that particular ongoing improvement that was identified.

Eric: Then ongoing improvements are something key and easier to implement and easier to leverage between one plant and another. And that is a value realization that happened in the midterm after the implementation.

Eric: Unfortunately, that it is not on Day One of after the implementation. It takes realistically around
three to nine months to start realizing that specific value.


Eric: Those are the two key values that I see in there. If we continue mentioning other values, we
would discuss the support cost. And I’m not talking only about IT support cost I’m also talking about operational support cost. Why? Because now they’re standardized and it’s easier to understand it and easier to maintain and potentially there with less resource intensive. 

D4M is a Michigan based company specializing in helping manufacturing customers leverage digital technologies to bring them closer to Industry 4.0. After 10 years and more than 150 Manufacturing System projects, we are confident that our methodology and experience provides the roadmap that can help bring clarity and efficiency to their manufacturing operation. To find out how we can help with your SAP environment, or to learn more about how we rolled out SAP to 60 locations in 60 months, use the form below or call us at the numbers listed.

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D4M International is an IT consulting company focused on transforming manufacturing and operations for optimal performance with SAP and DELMIA. 

We have expertise to help our clients assess, deploy, and maintain key solutions, driving productivity that impacts the bottom line. 

Leaders in Automotive, with expertise in other industries with advanced manufacturing, we operate in North and South America as well as Europe, enabling us to support our clients globally.

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