of ownership (TCO) of ERP over the first two years. Among the 63 companies surveyed-including small, medium and large companies in a range of industries - the average TCO was $15 million. But there was a payback. After 31 months, Meta found median annual savings of $1.6 million. On that basis, it would take nearly a decade to reach break even!

Such experiences, together with the downturn inAnyone involved in high value capital sales, such as enterprise software, will know life can be a roller coaster. One day everyone is on a high as a major deal is secured. Another day everyone is distraught when after many months of work, it comes to nothing. Losing out to another vendor is an accepted part of the game.

More annoying is the situation where you have been told you are the preferred supplier - and after all the euphoria, nothing happens. Typically any enquiry reveals that the proposal is "still with the board", or "has been put back until next quarter". The reality is that it’s a dodo; kicked out because the project team failed to build a compelling business case for the investment and the resources have been allocated elsewhere. The vendor team only have themselves to blame. They should have identified that funding for the project had not been authorized and helped the project team develop the business case.

In the 90’s organizations invested heavily in enterprise resource planning (ERP), and customer relationship management (CRM) systems. In the current decade, the focus of much IT spending is predicted to switch to corporate performance management (CPM) suites; integrating previously stand-alone application areas such as budgeting, scorecards and costing to provide better insight into current and future financial performance.

But a lot has happened in the last decade. Many organizations invested heavily in ERP and are still not convinced of the benefits. Global IT analysts, the Meta Group, recently did a study looking at the total cost of ownership (TCO) of ERP over the first two years. Among the 63 companies surveyed-including small, medium and large companies in a range of industries - the average TCO was $15 million. But there was a payback. After 31 months, Meta found median annual savings of $1.6 million. On that basis, it would take nearly a decade to reach break even!

Such experiences, together with the downturn ineferred supplier - and after all the euphoria, nothing happens. Typically any enquiry reveals that the proposal is "still with the board", or "has been put back until next quarter". The reality is that it’s a dodo; kicked out because the project team failed to build a compelling business case for the investment and the resources have been allocated elsewhere. The vendor team only have themselves to blame. They should have identified that funding for the project had not been authorized and helped the project team develop the business case.

In the 90’s organizations invested heavily in enterprise resource planning (ERP), and customer relationship management (CRM) systems. In the current decade, the focus of much IT spending is predicted to switch to corporate performance management (CPM) suites; integrating previously stand-alone application areas such as budgeting, scorecards and costing to provide better insight into current and future financial performance.

But a lot has happened in the last decade. Many organizations invested heavily in ERP and are still not convinced of the benefits. Global IT analysts, the Meta Group, recently did a study looking at the total cost of ownership (TCO) of ERP over the first two years. Among the 63 companies surveyed-including small, medium and large companies in a range of industries - the average TCO was $15 million. But there was a payback. After 31 months, Meta found median annual savings of $1.6 million. On that basis, it would take nearly a decade to reach break even!

Such experiences, together with the downturn inlame. They should have identified that funding for the project had not been authorized and helped the project team develop the business case.

In the 90’s organizations invested heavily in enterprise resource planning (ERP), and customer relationship management (CRM) systems. In the current decade, the focus of much IT spending is predicted to switch to corporate performance management (CPM) suites; integrating previously stand-alone application areas such as budgeting, scorecards and costing to provide better insight into current and future financial performance.

But a lot has happened in the last decade. Many organizations invested heavily in ERP and are still not convinced of the benefits. Global IT analysts, the Meta Group, recently did a study looking at the total cost of ownership (TCO) of ERP over the first two years. Among the 63 companies surveyed-including small, medium and large companies in a range of industries - the average TCO was $15 million. But there was a payback. After 31 months, Meta found median annual savings of $1.6 million. On that basis, it would take nearly a decade to reach break even!

Such experiences, together with the downturn in) suites; integrating previously stand-alone application areas such as budgeting, scorecards and costing to provide better insight into current and future financial performance.

But a lot has happened in the last decade. Many organizations invested heavily in ERP and are still not convinced of the benefits. Global IT analysts, the Meta Group, recently did a study looking at the total cost of ownership (TCO) of ERP over the first two years. Among the 63 companies surveyed-including small, medium and large companies in a range of industries - the average TCO was $15 million. But there was a payback. After 31 months, Meta found median annual savings of $1.6 million. On that basis, it would take nearly a decade to reach break even!

Such experiences, together with the downturn inof ownership (TCO) of ERP over the first two years. Among the 63 companies surveyed-including small, medium and large companies in a range of industries - the average TCO was $15 million. But there was a payback. After 31 months, Meta found median annual savings of $1.6 million. On that basis, it would take nearly a decade to reach break even!

Such experiences, together with the downturn in most western economies, have depressed IT spending in recent years and boards are right to be skeptical about further spending. This puts the onus on project teams seeking to secure funding for Corporate Performance Management initiatives to develop a credible and compelling business case with a break even that comes sooner rather than later. Step one is to identify the total cost of ownership year by year over a suitable period of time. Beside including the obvious cost of software, hardware, professional services and training, it is important to include the cost of internal staff.

Step two is to quantify the benefits. For instance, most of the quantifiable benefit of implementing a new budgeting application is likely to come from a reduction in resources in the finance function. If budgeting was previously done using spreadsheets, it is likely that there was an inordinate amount of work involved in preparing schedules, chasing submissions and re-keying data. Implementing a new system will remove much of this work and these savings should be costed and included in the business case. The cost saving of one part qualified management accountant over a five-year period will get you well on the way to break even.

At the same time, implementing a new budgeting system is likely to reduce the amount of time it takes line managers to prepare and review their budgets. The opportunity cost of saving three working days a year for two hundred cost center managers with an average benefits package of $75, 000 is sizeable. I calculate this to be an annual saving of $210,000 - o