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However, the most comprehensive ROI models largely fall short in their ability to accurately measure the total value of an enterprise software investment. Why? Most ROI models are focused on quantifiable measures of return. While this is useful, it leaves little room for defining the qualitative factors. Instead, a more complete analysis of return looks at the overall payback that a company can expect from enterprise software. Enterprise software payback includes quantifiable improvements in bottom line functionality and more qualitative measures – such as new business opportunities, improved customer and partner relations, and improved time to market. Executives who understand the overall payback approach will be able to make more informed choices that lead to success, not just in software deployment, but in overall business functionality. According to Enterprise Applications Consulting of Daly City, California, “One of the few companies pioneering the use of a more inclusive payback model in describing the value of enterprise software is IFS, which calls this model enterprise resource payback. The results of our research show that IFS is able to deliver more than just the standard ROI parameters that most vendors use to describe their products: Every IFS customer interviewed found that the payback for their IFS software exceeded generally accepted ROI measurements.” Cost savings for business operations are a significant source of enterprise resource payback. National Semiconductor, for example, reports that immediate improvements in cash flow mean that the initial cost of its IFS implementation was recovered in six months. Another IFS customer decreased its IT spending by 9 percent in the first year of operation. Others cite long-term payback as a key part of the value of their IFS implementation. One expects to see a fourfold increase in profitability as a result of the efficiencies enabled by IFS applications. Payback can also drive significant new business opportunities. The ability to model new processes and manage new products or services can open up new opportunities. This is true in regard to direct e-commerce as well as traditional manufacturing, distribution and development areas. The modularity and flexibility of IFS applications, backed by complete integration across all functions, makes it possible to employ new and innovative business methods knowing that the enterprise systems will fully complement and support them. Indeed, IFS component technology, which provides the ability to add new capabilities quickly in a step-by-step way, combined with the flexibility and speed of the company’s 60+ applications, allows users to maximize their opportunities for both new and existing business opportunities. Whether you are concerned about the current bottom line or future growth, keeping an eye on the total payback and not just on ROI can mean the difference between flying high or speeding to destruction. IFS Applications and the IFS Enterprise Resource Payback model can help you avoid a crash.
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