What is a good ROI for an ERP project?

Many businesses plan for payback within 18 to 36 months. Results depend heavily on how many manual hours and errors the system actually removes, which is why every input is editable.

What are the hidden costs of ERP?

Data clean-up, internal staff time, training, integrations, post-go-live support and change requests. Include them in the annual running cost or implementation cost fields.

Why apply a realisation factor?

Benefits are usually partially realised in the first year. A 75% default reflects typical shortfalls; set it to 100% to see the theoretical maximum.

Is my financial data stored?

No. The calculation runs in your browser and the share link holds only the numbers you enter, with no personal information.

How is payback period calculated?

Month by month: the implementation cost is paid at month zero, benefits start after the ramp period, and running costs accrue monthly. Payback is the first month when the cumulative result is positive.

Free ERP tool

ERP ROI calculator

Model the annual savings, payback period and three-year ROI of an ERP project from time saved, inventory reduction and fewer errors. All assumptions are visible and editable.

Your business

Your ROI

3-year ROI

57%

Payback

22 months

Annual benefit

₹20.8 lakh

after realisation

Benefit vs cost by year

BenefitCost

Yearly benefit, cost and cumulative result
Year	Benefit	Cost	Cumulative
1	₹13.9 lakh	₹26.4 lakh	-₹12.6 lakh
2	₹20.8 lakh	₹4.4 lakh	₹3.8 lakh
3	₹20.8 lakh	₹4.4 lakh	₹20.2 lakh

Annual benefit before realisation

Labour: ₹9.3 lakh
Inventory carrying cost: ₹10.6 lakh (at 20% of inventory value)
Fewer errors: ₹7.8 lakh

Methodology and assumptions

How savings are calculated

Three benefit streams are modelled, then reduced by a realisation factor because not every planned benefit materialises.

Labour: staff affected x hours saved per week x annual cost per person / 40 (annual cost per weekly hour).
Inventory: inventory value x percentage reduction x 20% annual carrying cost (storage, capital, shrinkage).
Errors: annual revenue x losses from errors, rework and write-offs (as a share of revenue) x expected reduction.
Realisation factor (default 75%) haircuts the gross benefit.

Payback and ROI

Benefits begin after the go-live ramp (months with no benefit). Costs are one-time implementation plus annual running cost (licences, hosting, support). Payback is the first month in which cumulative benefit exceeds cumulative cost. Three-year ROI is (total benefit minus total cost) divided by total cost.

Default implementation and running costs are scaled from typical market ranges in your country and are placeholders; replace them with a quote or the output of the ERP implementation cost calculator.

Limits of the model

It excludes revenue growth, cash released from inventory, tax effects and discounting. It is a planning aid for a business-case conversation, not financial advice.

Last reviewed 3 November 2026. This tool gives planning estimates for general information and is not a quotation or professional advice.

Frequently asked questions

What is a good ROI for an ERP project?: Many businesses plan for payback within 18 to 36 months. Results depend heavily on how many manual hours and errors the system actually removes, which is why every input is editable.
What are the hidden costs of ERP?: Data clean-up, internal staff time, training, integrations, post-go-live support and change requests. Include them in the annual running cost or implementation cost fields.
Why apply a realisation factor?: Benefits are usually partially realised in the first year. A 75% default reflects typical shortfalls; set it to 100% to see the theoretical maximum.
Is my financial data stored?: No. The calculation runs in your browser and the share link holds only the numbers you enter, with no personal information.
How is payback period calculated?: Month by month: the implementation cost is paid at month zero, benefits start after the ramp period, and running costs accrue monthly. Payback is the first month when the cumulative result is positive.