- ERP Simplifies ROI Tracking: All business data is collected on a single platform, making it easier for you to accurately track ROI.
- ROI Steps: Define investment goals, use ERP data for costs and revenue, then easily calculate ROI.
- Optimize ERP: Use analytics features, ensure data accuracy, and conduct regular reviews for consistently relevant ROI.
You might all encounter this business issue:
Having invested in new kitchen equipment or hired additional staff, but still not knowing the real impact of that investment.
Is it truly profitable? Or has it become a burden?
This scenario might be familiar to business owners, especially those in the F&B industry. Amidst piles of data and financial reports, it's tough to accurately track ROI.
If you feel the need for a "magnifying glass" to see the impact of your investments, an ERP system might be the answer.
Let's discuss how an Enterprise Resource Planning system can help you find ROI more simply and efficiently!
Where Is ROI Hiding?
When talking about ROI (Return on Investment), we often wonder,
"Has the money spent really turned into profit, or is it just passing through?"
But finding this answer isn't always as easy as flipping your hand over.
As a business owner, calculating ROI can feel like looking for a needle in a haystack—especially if data is scattered across various systems.
It can cause anxiety,
"Is this investment really profitable?"
That's why an ERP system can be the "guide" that helps you find the ROI that may have been "hiding."
No more drama with messy data.
Advantages of ERP Systems in Tracking ROI
With ERP, all data from various business lines, from operational costs to team productivity, can be gathered on one platform. So, you no longer need to search for data in different places.
Can you imagine the hassle of checking data manually one by one?
ERP simplifies this process. All data is available in real-time and structured, ready for you to access whenever you want to perform faster and more accurate analysis.
Moreover, ERP automatically generates easy-to-understand reports, including graphical visualizations or diagrams that make it easier for you to read massive amounts of data.
Steps to Track ROI Using ERP
Step 1: Define Your Investment Goals
Before going further, the first thing you need to do is determine the goals of your investment.
Do you want to increase efficiency, reduce costs, or increase revenue?
Knowing your main goal is crucial, as it will influence how you measure the success of that investment.
This will be the basis for monitoring whether your investment is going according to plan or not.
Step 2: Use Operational Cost Data from ERP
After goals are set, ERP will help you collect data in real-time. All your business expenses will be neatly recorded in the system, so you can see spending trends more clearly.
To start looking for cost data, you can access the operational costs section.
Here you can view inventory data, daily, weekly, or monthly expenses—and also spending trends that can help you assess whether your costs are efficient or not.
Step 3: Track Revenue Data Generated
After identifying costs, the next step is to track the revenue data generated after the investment. ERP will make it easier for you to see revenue increases directly related to investment decisions.
Sometimes, the impact of an investment isn't immediately visible, so be patient and check regularly. Continue to monitor its performance to get a more accurate picture.
Step 4: Compare and Calculate ROI from ERP Data
After you've gathered cost and revenue data, it's time to calculate ROI!
Simply compare the total investment expenditure with the total revenue generated to find out the result.
If you're still confused, we've discussed how to calculate ROI before. You can check out our article.
For example, if you invested Rp10,000,000 and the revenue generated after the investment is Rp15,000,000, then the ROI is:
ROI = ((15,000,000 - 10,000,000) / 10,000,000) x 100 = 50%
So, your ROI is 50%!
Case Study: The Role of ERP in Tracking ROI for a Restaurant Business
"Selera Nusantara" restaurant recently invested Rp20,000,000 to update the kitchen and Rp15,000,000 for digital marketing with the goal of increasing operational efficiency and attracting more customers. This investment is expected to improve operational efficiency and revenue from sales.
Investment:
- Kitchen Equipment: Rp20,000,000
- Digital Marketing: Rp15,000,000
- Total Investment: Rp35,000,000
Results:
During the 6 months after the investment:
- Revenue Before Investment: Rp150,000,000
- Revenue After Investment: Rp200,000,000
- Operational Costs Before Investment (6 months): Rp70,000,000
- Operational Costs After Investment (6 months): Rp60,000,000
The ERP system helped in recording all operational costs, tracking expenditure sources down to the unit item, and recording revenue by food category. The system also tracked the impact of digital marketing, such as the increase in orders from online platforms and conversions resulting from marketing campaigns.
ROI Calculation:
1. Operational Savings:
Savings from the efficiency of new kitchen equipment are:
Rp 70,000,000 - Rp60,000,000 = Rp 10,000,000
2. Additional Revenue from Marketing:
The increase in revenue is:
Rp 200,000,000 - Rp 150,000,000 = Rp50,000,000
3. ROI Calculation:
Total profit from investment (additional revenue + savings) is:
Rp 50,000,000 + Rp 10,000,000 = Rp60,000,000
ROI is calculated using the formula:
ROI = ((60,000,000 - 35,000,000) / 35,000,000) × 100 = 71.4%
The ROI for Selera Nusantara over 6 months is 71.4%.
Tips to Optimize ERP Use for More Accurate ROI
Use the Analytics Features in ERP
One of the best features in an ERP system is the analytics feature.
This feature allows you to generate detailed reports, see emerging trends, and gain deeper business insights.
With analytics, you can monitor ROI more accurately, as the system processes data from various business lines and presents it in an easily understandable form.
Don't hesitate to explore this feature further—from cost reports, revenue, to team productivity.
All this data can help you understand how investments impact your business.
Ensure All Departments Input Data Accurately
For optimal results, make sure all departments in your business input data into the ERP accurately and up-to-date.
Without accurate data, the ERP system can't provide insights that truly reflect your business's condition.
So, ensure that all teams—whether finance, marketing, or operations—regularly update data.
This is crucial because inaccurate data can lead to misleading ROI results.
Try to create standard procedures or reminders so that data entered into the ERP is always up-to-date and accurate.
Conduct Regular Reviews
ROI is not something that can be calculated once and done. Over time, business conditions and markets will change, as will the results of the investments you make.
Therefore, make sure to review regularly.
Every few months, revisit your ROI data, check for significant changes, and adjust strategies if necessary.
By reviewing regularly, you can ensure that ROI data remains relevant and the decisions you make are always based on the most accurate information.
A Conclusion: The Great Benefits of Tracking ROI with ERP
Tracking ROI with ERP offers various advantages that can increase efficiency and accuracy in your business.
With an ERP system, you can make more precise, data-driven decisions and gain a deeper understanding of the profitability and success of the investments you have made.
So, don't hesitate to start using ERP in tracking ROI—because with this system, everything becomes clearer and more controlled.
If you're looking for a practical ERP solution for tracking ROI, Opaper LinkPro might be the right choice. Opaper LinkPro comes with features like inventory management that allow you to record all raw material transactions, including stock quantities and supply times.
With neat recording, you not only avoid potential stock loss or overstock but can also know which materials are most frequently used and which may need to be reorganized.
Moreover, Opaper LinkPro also has a Real-Time Reporting feature that is easy to access. With this report, you can check the overall business performance—from inventory to sales—in one place.
This will help you track costs and revenue per outlet or even per product, making it easier to calculate ROI accurately. Imagine, all data in one integrated system without the hassle of switching between applications.
In essence, with Opaper LinkPro, you not only manage stock efficiently but also have a tool for transparent and accessible ROI tracking.
Let's start exploring how LinkPro can help you understand the value of investment in your business more clearly!