Chapter 3
Benefits and Cost of an ERP System
LEARNING OBJECTIVES
After reading this chapter, you will be able to understand:
- Benefits of an ERP system
– Strategic benefits
– Operational benefits
– Managerial benefits
– Organizational benefits
- Intangible benefits
- Cost of an ERP system
- Cost-benefit analysis
3.1 INTRODUCTION
In the previous chapters, we learnt that an ERP system is a semi-finished product that has to be configured for the host company. We also learnt that an ERP project costs between 1 to 3 per cent of revenue of the host company if all modules of the ERP system are implemented. A company spends money on the ERP system because it expects to benefit from the system. An ERP system may deliver strategic benefits, operational ...
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