A strong ERP business case explains the problem, compares realistic options and shows what each would cost and deliver. It also sets out who will run the project, how people will be supported through the change and how the organisation will measure benefits afterwards. That gives a board or trustees a sound basis for deciding what to approve, whether the answer is a new system or better use of an existing one.
Why an ERP business case matters
Few decisions touch as much of an organisation as an ERP investment. It changes how finance, operations and frontline teams work, and the board will judge it against the business case that approved it. Gartner predicts that by 2027, more than 70% of recently implemented ERP initiatives will fail to fully meet their original business case goals.
In our experience, many of those shortfalls start before the project does, with a business case that is vague about outcomes, optimistic about cost or built around a preferred system.
A business case should do more than just secure approval for an ERP or digital transformation project. It should set the goals your board will measure the project against, the budget it has to work within and the benefits everyone expects to see.
At Optimum PPS, we have supported more than 300 ERP and digital transformation projects across manufacturing, engineering, charities and other sectors. That experience has shown us the value of defining the expected outcomes before a project becomes focused on a particular system or supplier.
Those outcomes also give the organisation a way to judge the result. If the business case promises “better visibility” or “greater efficiency” without defining what those mean, it will be difficult to tell whether the project delivered them. A detailed business case helps leaders make the investment decision and assess its value after go-live.
What should an ERP business case include?
Whether you are seeking approval for a discovery and assessment or a full ERP selection and implementation, your business case should answer these five questions:
1
Business need
Why change now?
Current problems, strategic priorities and relevant triggers
2
Options
Why this route?
A fair comparison of improvement, integration and replacement
3
Costs and benefits
Is the investment worthwhile?
Full costs, baselines, expected outcomes and owners
4
Delivery
Can we do it?
Capacity, governance, timescales and risks
5
People
Will the change take hold?
Staff involvement, training and benefit reviews
1. Explain the business need
Begin with what the organisation is trying to achieve. A request for a new system may reflect genuine problems with the software, but it can also point to gaps in processes, data or the way teams use the tools they already have.
For a manufacturer, the priority might be more reliable stock figures or consistent planning across sites. A charity may need clearer financial oversight or better information to support frontline teams. Link the proposed change to a goal the board already recognises, then describe what happens today and what would improve.
Client example
The Action Group
The starting point for its TAG Evolve programme was an operational concern: staff retention and reliance on agency workers were affecting continuity of support. We helped the charity review its service model, roles and ways of working. The example shows why a digital business case needs to account for the organisation around the technology, even when systems are part of the wider change.
2. Compare the options fairly
The recommended investment becomes more convincing when leaders can see the alternatives. Judge each route against the same criteria: requirements, cost, risk, timescale and internal capacity.
Maintain the current approach for now
What the case needs to establish
The cost and risk of waiting, and when to review the decision
Improve the existing system
What the case needs to establish
Whether process, data, configuration or training changes will deliver enough value
Integrate or extend it
What the case needs to establish
Whether the gaps can be addressed without creating more work to maintain
Replace it
What the case needs to establish
Whether the benefits justify the cost, disruption and delivery risk
The “do nothing for now” option deserves an honest assessment. It may be sensible to defer a project while another change is under way, provided the organisation understands the cost and risk of waiting. Equally, replacement can be justified when a system cannot reasonably support the way the business needs to operate.
Client example
Samson Materials Handling
We were asked to assess whether Samson’s existing ERP remained fit for purpose or should be replaced. The Health Check found that its processes and organisational structure had not kept pace with a change in business model, while data ownership also needed attention. We recommended addressing those issues and getting more from the existing system before reconsidering replacement.
That recommendation gave Samson a practical route to improvement and a stronger starting point for any later implementation. An independent assessment can make room for that answer because it is not tied to selling a particular platform.
3. Measure the full cost and the expected return
Start with a baseline. How long does month-end reporting take? What percentage of deliveries arrive on time? How many hours go into re-entering information or checking spreadsheets? Which measures already exist, and which need a short period of observation before they can be trusted?
Then count the full cost of each option. Alongside software licences and supplier fees, include:
• Internal staff time and project management
• Process design, data cleansing, migration and integrations
• Testing, training and support through the change
• Ongoing running costs and future improvements
Where costs remain uncertain, say so and show the assumptions. Our ERP selection guide explains how to assess the full cost of ownership in more detail.
Set out benefits in the same disciplined way. Some examples are shown below:
Faster reporting
Current position
Days spent producing and checking the monthly pack
Proposed measure
Time to produce an agreed set of reports
Benefit owner
Finance Director
Better delivery performance
Current position
Current on-time delivery rate
Proposed measure
Comparable rate after the change
Benefit owner
Operations Director
Less administration
Current position
Hours spent transferring or reconciling data
Proposed measure
Repeat the time study after implementation
Benefit owner
Relevant team lead
Staff time released for other work should be described as capacity unless it leads to a demonstrable cash saving. Better service, stronger control and lower risk can also matter, even when a reliable value is difficult to assign.
Client example
Fern Plastic Products
Fern needed to get more value from its new business system after moving from a make-to-order model to a supply chain-driven one. After we realigned and optimised its supply chain processes and system, the results were:
75% to 98%
Customer delivery performance
75% to 95%
Supplier delivery performance
75% lower
Additional transport costs
4. Show how the work will be delivered
A board needs confidence that the organisation can carry out the proposed change alongside day-to-day work. Explain who will sponsor the project, who will make decisions, what the supplier will deliver and what internal teams must contribute.
Be realistic about the time needed from finance, operations and frontline staff. They will help define processes, clean data, test the solution and support colleagues. If the plan assumes they can do all of that without making space in their schedules, the delivery case is incomplete.
Identify the main dependencies, such as data quality, integrations and the availability of staff for design, testing and training. Prosci’s benchmarking research found that projects with excellent change management were around seven times more likely to meet their objectives than those with poor change management.
Client example
Finsbury Food Group
At Finsbury, acquisitions had left eight UK manufacturing sites with their own systems and ways of working. We added specialists in project management, change management and data migration to Finsbury’s own team and rolled out Infor M3 site by site, carrying the lessons from each site into the next.
5. System benefits, staff involvement and training
Benefits do not appear automatically when the system goes live. Someone needs to own each outcome, review progress and address the reasons a new way of working is not taking hold.
Explain who will be affected, how they will help shape the design and what training and support they will receive. Plan for the period after go-live too. Reporting may improve only after teams have agreed definitions, entered reliable data and learned to use the new processes consistently.
Client example
RoSPA
More than 70% of staff took part in workshops during the early stages of a wide-ranging systems programme. That involvement helped us understand how work and information moved across the charity before defining the future approach. Staff input strengthened both the case for change and the plan to deliver it.
Put a clear decision in front of the board
The final paper can be short. A board or trustee summary should make seven things easy to find:
- 1The problem and the outcomes sought
- 2The options considered and the recommended route
- 3The full expected cost and its main assumptions
- 4The benefits, baselines and named owners
- 5The principal delivery risks and required capacity
- 6The milestones for reviewing progress and results
- 7The specific approval requested
Supporting detail can sit behind the summary.
For a commercial board, the case may put more weight on margin, working capital, service and operational performance. Charity trustees may place more emphasis on outcomes for service users, value for money, governance and financial sustainability. Both need credible assumptions and a way to check results over time.
What happens to the business case after approval?
Keep the business case active after approval. Review its measures at agreed points during delivery and after go-live. If costs, scope or expected benefits change, bring that back to the decision-makers while there is still time to respond.
Making the case for the right change
An ERP business case should bring the organisation’s priorities, options and delivery capacity into one decision. It needs a clear baseline for the benefits, a realistic view of the full investment and named people who will own the results.
The aim is to give leaders enough evidence to make a sound investment decision and enough clarity to judge the outcome later. That may lead to a replacement system, an optimisation programme or an initial discovery and assessment exercise to understand the requirements properly.
Find the right starting point
Optimum PPS can independently review your current position, test the available routes and identify the evidence your board needs for its next decision.
Frequently asked questions
What should an ERP business case include?
It should explain the business need, compare realistic options, account for the full cost of change and set out expected benefits, delivery risks, responsibilities and measures of success.
How do you calculate ERP return on investment?
Compare the full project and running costs over an agreed period with benefits supported by a current baseline. Keep cash savings separate from released staff capacity and outcomes that cannot reliably be converted into money.
Who should own the business case?
A senior sponsor should own the overall case. Give each major benefit an owner in the part of the organisation that will deliver and measure it after go-live.
Do we need to choose a supplier first?
No. Define the business need and assess the options before approaching suppliers. Refine costs and benefits when requirements and supplier proposals are more detailed.
How long does it take to build an ERP business case?
It depends on the size of the organisation and how well its processes and requirements are already understood. A focused case can come together relatively quickly through a discovery and assessment, while larger or multi-site organisations may need a detailed Blueprint phase first.