Prior to launching an ERP implementation, usually an analysis of project costs and savings is necessary in order to secure project funding. From a financial return on investment (ROI) standpoint, sr. management is typically looking for the hard numbers. While there are many potential benefits associated with ERP that can positively impact the financials, many organizations mistakenly base a significant portion of the project justification on employee staff reductions.

Of course, a new system may result in fewer employees. But when evaluating ERP packages, many become dazzled by the vendor’s software demonstrations and then failed to do their homework to understand the real productivity affect. Other managers have a tendency to insist on staff reductions that are not really feasible. After all, it is brand new software and it costs a lot of money. In either case, ERP becomes all things to all people and then staff reductions are way…