How many years an ERP project takes to recover its upfront cost from staff time saved and other annual savings.
Enter the one-off cost of the project, any grant or credit that reduces it, and the net annual saving you expect once the system is stable. Net means: hours saved × loaded hourly cost, plus hard savings (retired software, fewer stock write-offs, avoided hires), minus any increase in annual subscription and support compared with what you pay now.
The calculator grows the saving by the yearly percentage you enter and counts the years until cumulative savings cover the net upfront cost. Net benefit over the horizon = savings added up over the horizon − net upfront cost.
Worked example (illustrative): a $90,000 project, no grant, saving a net $32,000 in year one and growing 3% a year. Cumulative savings reach $32,000, $64,960 and $98,909 after three years, so payback is about 2.7 years. Over five years savings total about $169,900, a net benefit of about $79,900.
Limits: no discounting, tax or financing cost, and it assumes savings start immediately. In practice there is often a dip in productivity for several months after go-live; reduce year-one savings to allow for it. See the payback worked example for how to estimate savings honestly.
Worked Costings and Selection Checklists
Illustrative ERP project timelines by business size, the phases and decisions in each, Australian calendar dates to avoid, and how delays add cost.
Worked Costings and Selection Checklists
How to estimate ERP savings honestly, net them against higher running costs, and calculate payback, including a post-go-live productivity dip. Illustrative figures.
Worked Costings and Selection Checklists
How SaaS subscriptions, licences, implementation work and hardware are generally treated for Australian tax, the $20,000 small business instant asset write-off, GST credits and where to check.
