An ERP feasibility study is an analysis of a business model or operational approach in regards to your ERP system. The focus of a feasibility study is to answer the very fundamental question “should we go ahead with this project?”
The ERP feasibility study occurs on the front end of an ERP project. It is a significant step in a conversation for integrating systems, upgrading ERP software, migrating vendors or implementing an agile ERP system if a merger or acquisition is in the works (a growing trend).
An ERP feasibility study targets three primary areas: industry or market, technical resources, and financing. Aggregating the results of each of these elements will determine if the project is plausible.
The dynamics of a company reflect the industry and market in which they do business. ERP projects among industries largely differ in scope and are determined by products, logistics, service offerings and customers they serve. The study should evaluate the long-term potential an ERP project could bring to the industry and end user.
Financing is fundamental to investing in any infrastructure project, however it should not be the overall factor in the final decision making process. At this point, it is only necessary to take a break-even analysis to determine at what point new revenue will equal the cost of receiving the revenue following the ERP project. This provides key sponsors with a margin of safety, or a point which the new value presented to the business exceeds its overall cost.
Feasibility study in ilia is done in accordance with the following steps:
- Understand the status quo:
- Understanding ICT Infrastructure.
- Identify strengths and weaknesses and threats and opportunities SWOT.
- Identify business processes and sub-processes.
- Identification of information systems.
- Identify the status of human resources in terms of organizational culture and readiness for change.
- Formulation of system matrices, system purpose, system-needs and etc.
- Cognitive Report.