The Total Economic ImpactTM
of Epicor ERP
Study reveals Epicor transforms manufacturing businesses
and delivers an ROI of up to 264%
Measuring the Cross-Business Benefits of Epicor ERP . . . . . . . .3
ERP—The Gift of Greater Visibility . . . . . . . . . . . . . . . . . . . . . . .4
Forrester Study Measures the Impact . . . . . . . . . . . . . . . . . . . . .5
Benefits of Epicor ERP 10—A Summary . . . . . . . . . . . . . . . . . . .6
Inventory and Supply Chain Management . . . . . . . . . . . . . . . .8
Planning, Scheduling, and Production Management: . . . . . .10
Customer Experience, Revenue Growth, and Front-Office . .12
Analytics, Financial Management, and Risk Management . . .14
Information Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
Epicor ERP—The Smart Move for Manufacturing . . . . . . . . . .17
What’s Inside
2 | The Total Economic ImpactTM of Epicor ERP
Measuring the Cross-Business
Benefits of Epicor ERP
If you’re a manufacturing business in the market for an enterprise resource
planning (ERP) solution, this study is for you .
1 “The Total Economic Impact™ of Epicor ERP,” a Forrester Consulting study commissioned by Epicor, August 2017
2 All quotes in this eBook are taken from the Forrester study referred to in footnote 1 above.
You’ll either be investing in ERP for the first
time—to replace software silos that are holding
your business back—or you’re looking to replace
legacy ERP technology that isn’t flexible, scalable,
or advanced enough to support your digital
transformation and growth plans.
With ERP software increasingly becoming the
backbone of modern manufacturing operations,
you need a solution fit for the factory of the future.
ERP providers will claim a variety of benefits for their
solutions, but can they back them up? To provide
evidence for Epicor ERP, we commissioned a study
by Forrester Consulting1 to give you a framework for
measuring the many benefits Epicor ERP can deliver.
This eBook presents the key results from
the study. In it you will:
XX Learn about Forrester Consulting’s
methodology for the study
XX Delve into the capabilities of Epicor ERP
that can give a typical manufacturing
customer a return on investment (ROI)
of 264% over three years
XX Discover the important role of
cross-enterprise visibility and insight
in realizing this ROI Epicor understands job costing
and how the guts behind
the scenes work. … With
other companies, you talk to
them about manufacturing
concepts and it’s like talking
to a blank wall.
—Operations Manager²
3 | The Total Economic ImpactTM of Epicor ERP
ERP—The Gift of Greater Visibility
In a sector shaped by Industry 4 .0 technologies, manufacturers are busy
transforming their businesses into the factories of the future .
Why ERP?
Probably the most frequently cited reason for
investing in ERP is transformation of operational
efficiency. When you manage diverse processes in
one place—the core function of ERP—it is simply
much quicker and easier to do business, and
your factory becomes much more productive and
responsive with less effort.
If we delve more deeply—asking how it is that a
good ERP solution transforms efficiency—we quickly
realize that it’s not just about saving time by joining
up processes or automating what used to be manual.
It’s just as much about giving people greater
visibility—through access to information that
previously wasn’t readily available, including insight
into what is happening downstream and upstream
from their own jobs.
It’s this enhanced visibility that helps businesses:
XX Do things they couldn’t do before, such as
identify and fix problematic processes or push
information to customers as soon as it’s needed
XX Collaborate more effectively, for example by
enabling someone to cover for a colleague at a
different facility
XX Make more informed decisions more quickly,
such as making the case for investment in new
technologies based on concrete, accurate data
about process costs
Fundamentally, greater visibility adds to overall
business efficiency, agility, intelligence, and
customer responsiveness, enabling even greater
competitiveness and growth.
4 | The Total Economic ImpactTM of Epicor ERP
Forrester Study Measures
ERP Impact
When you’re exploring ERP solutions, you’ll want to know more than “this
will help us drive business transformation and growth .” You’ll want concrete
information about the improvements you can expect and what they will mean
for your manufacturing business .
³ For a more complete description of the Total Economic Impact™ framework and methodology, please refer to the full study at
www.epicor.com/teistudy/
The game changer
was the dashboards,
real-time data, reporting,
and customizability.
—Interviewed Manager
To this end, the Forrester Consulting study,
Total Economic ImpactTM of Epicor ERP provides
a framework to evaluate the potential impact of
the Epicor ERP solution on your bottom line.
Methodology in brief3
Forrester designed a composite organization
based on the characteristics of four manufacturing
firms interviewed for the study, each with years
of experience using Epicor ERP. It then used its TEI
methodology3 to construct a risk-adjusted financial
model representative of the interviews, in order to
determine the impact of Epicor ERP in financial terms.
The composite manufacturer
The composite organization has these key
characteristics:
XX Industrial goods manufacturer
XX ~$350 million annual revenue
XX Headquartered in U.S., serving customers globally
XX 1,000 employees (500 on the production floor)
XX Six manufacturing facilities
XX One distribution center
5 | The Total Economic ImpactTM of Epicor ERP
Benefits of Epicor ERP 10—
A Summary
Before the composite manufacturer deployed Epicor ERP, some of its facilities had
legacy ERP systems, while others had different siloed software suites on the shop
floor and for financial functions .
Deployment of Epicor ERP 10
In a six-month timeframe, the manufacturer
implemented a variety of Epicor ERP 10 modules in
an external hosted environment:
XX Customer relationship management (CRM)
XX Sales management
XX Financial management
XX Production management
XX Enterprise performance management
Unquantified benefits
Increased versatility
with deployment
options such as the
Epicor cloud offering
Flexibility to
customize
the software
Access to deep
expertise in
manufacturing
best practices
Faster time to market
for new products or
geographical expansion
Additional efficiencies and savings
with implementation of additional
Epicor ERP capabilities such as social,
mobile, and business intelligence
XX Governance, risk, and compliance
XX Planning and scheduling
XX Project management
XX Supply chain management
XX Product data management
XX Global business management
The manufacturer also took advantage of the
Epicor service-oriented architecture, for example by
integrating a separate system for RFID in production.
Beyond the results quantified within the
Total Economic Impact™ (TEI) model, the
interviewees talked about other benefits of
choosing Epicor ERP, including:
6 | The Total Economic ImpactTM of Epicor ERP
4 For the calculations behind all of the results presented in this eBook, including the PV discount rate, please see the full study at
www.epicor.com/teistudy/
5 PV is present value. It means the value has been adjusted for specific risk factors and further discounted to more accurately
reflect the present value of the three-year benefit.
I like the way that Epicor ERP sets us up with the capabilities
for our next acquisition. We like the fact that we can use the
same module in a different fashion. And with the cloud-based
Epicor ERP technology, we are ready for growth.
—Operations Manager, Industrial Parts Manufacturing
Quantified benefits
All of the quantified benefits in the study are given as the total after three years of using Epicor ERP.
Wherever given as PV (present value), it means that the benefit has firstly been adjusted for specific risk
factors, and then discounted to more accurately reflect the present value of the three-year benefit.4
Net PV benefit:
ROI:
Payback:
Within this framework, the
composite manufacturer achieved:
$2.7 million
incremental profit from
increased revenue
The total PV benefit comprised:
$10.2 million
in savings, efficiencies, and productivity
improvements across the business, from shop floor
to top floor, from back office to front office
$12.9
million
$9.3
million
264%
13
months
Total PV benefit5 (gross)
(after subtracting total Epicor ERP costs)
In exploring these results more closely, we’ll discover how Epicor ERP supports
manufacturing growth—and how important greater visibility is to realizing this goal.
7 | The Total Economic ImpactTM of Epicor ERP
6 ‘PV’ is present value. See footnote 5.
For our composite manufacturer, the most significant
overall financial benefit of deploying Epicor ERP is in
inventory and supply chain management, where the
critical role of visibility in building the factory of the
future is clear to see.
If a manufacturer lacks the visibility to accurately
forecast demand or track incoming orders,
procurement will always be under pressure and just-
in-time manufacturing is all but impossible. If it takes
laborious manual counts just to know what’s on the
shelves, discrepancies will inevitably build between
inventory and customer demand.
Inventory and Supply Chain
Management
Take control from the start
Such gaps in visibility typically result in:
XX Planning, scheduling, and production issues
(addressed in the next section)
XX Slow or inaccurate response to customer inquiries
(addressed on page 12)
XX Mounting inventory costs, either from holding
parts unnecessarily—excess inventory—or from
overproducing and carrying excess product
No wonder manufacturers turn to an ERP solution.
With the cross-enterprise visibility delivered by Epicor
ERP, our composite manufacturer can now forecast
demand and plan appropriately, and has minimized
the manual effort involved in inventory counting,
order tracking, and buying.
$4.4million
inventory benefit (PV)6
$65,000+
supply chain management benefit (PV)
8 | The Total Economic ImpactTM of Epicor ERP
Specific results included:
67%
reduction in inventory
counting efforts
Saving 16 hours each for
70 people annually—a total of
46+ days saved annually
Multisite operations? No problem.
For one Epicor ERP customer, the move to real-
time inventory management also increased savings
by allowing bulk buys of materials across multiple
facilities. Increased visibility allowed for easy
coordination between facilities, ensuring that no
facility would run short.
What could your manufacturing business do with
Epicor ERP?
5%
improvement in
buyer productivity
10%
improvement in
material efficiency and
inventory accuracy
Visibility of real-time data was a huge issue for us, and
to get there, we had to [implement] Epicor ERP. … Each
facility makes products for each other, and we transfer
finished goods and materials between facilities all the time.
—IT Manager, Automotive Manufacturing
9 | The Total Economic ImpactTM of Epicor ERP
Even if you hold excess inventory (see previous
section), your ability to grow will still be limited
if your planners, schedulers, and production
staff don’t have full visibility of demand and
production data.
It’s common for manufacturers to come to Epicor
because they’re tired of struggling with delayed
jobs, inefficient line loading, and production
errors—which in turn lead to overtime, rework,
expedited shipping costs, pressure on customer
service, and missed sales opportunities.
With Epicor ERP—by contrast—our composite
manufacturer has the visibility to forecast,
plan, and schedule more effectively, monitor its
Planning, Scheduling, and
Production Management
Transform the heart of your operations
operations more easily, and use its production lines
and labor more efficiently. By doing so it has achieved
faster turnaround times, greater production accuracy,
and greater productivity for its planners, schedulers,
customer service staff, and production line operators.
What keeps you up at night?
Before using Epicor, one interviewed manufacturer
had two issues a week that required expedited
shipping, at $10—20K per incident. These incidents
are now significantly more rare.
What substantial costs could your factory slash with
Epicor ERP?
$1million
planning and scheduling benefit (PV)
$1.7million
production management benefit (PV)
10 | The Total Economic ImpactTM of Epicor ERP
[Epicor ERP] made it a lot better and
a lot faster to get our product out the
door. One person in another facility
could cover for a person in a different
facility if needed, because we were all
sharing information. Flexibility on the
shop floor has improved.
—Interviewed Manager
Specific results included:
10%
greater staff efficiency in planning,
scheduling, and customer service
$500,000+
saved annually by avoiding
expedited shipping
$250,000
saved annually in rework reduction
$600,000+
saved annually in overtime reduction
11 | The Total Economic ImpactTM of Epicor ERP
With improved visibility across the enterprise—
and the resulting operational efficiencies—one of
the most important outcomes for our composite
manufacturer has been growth in revenue as a result
of better customer relationship management.
Customer Experience,
Revenue Growth, and Front Office
Boost your top line
For different manufacturers this may play out in
different ways, but usually involves:
XX Providing more accurate and competitive
quotes thanks to better cost visibility
XX Offering faster, more reliable turnaround on
customer orders through streamlined planning
and production
XX Accessing the latest information to address
customer questions instantly and
communicate proactively
$2.7million
incremental profit (PV)
$400,000+
front office labor savings (PV)
12 | The Total Economic ImpactTM of Epicor ERP
Satisfied customers,
productive employees
Typically, such improvements in customer
responsiveness lead to referrals and incremental
sales. The effect of the resulting growth is magnified
by the ability to scale operations without hiring as
heavily as you would expect, thanks to productivity
improvements delivered by the ERP solution.
Our composite manufacturer has certainly used
the visibility and efficiencies delivered by Epicor
ERP to be more collaborative, proactive, and
transparent with its customers, improving the
customer experience and closing more business.
Instead of hiring additional staff to cater to this
growth, the manufacturer leveraged the productivity
improvements from using Epicor ERP to redirect
front-office staff to production and other work.
What might your growth look like?
One Epicor customer identified a six-fold increase in
its quote hit rate from 5% to 35%, closed contracts
with three times as many customers per year,
gained $50,000 per year in referrals, and found that
increased collaboration and visibility enabled it to sell
parts to more customers.
How much could your manufacturing business grow
with Epicor ERP?
Epicor ERP allows us to address issues while
they are happening. We can go back with this
information to our customers and be more
proactive. … We increase our responsiveness
and push transparency. … We’ve gotten
customer referrals because of this.
—Operations Manager, Industrial Goods Manufacturing
Specific results included:
6%
increase in annual revenue
3 FTEs
labor saved
13 | The Total Economic ImpactTM of Epicor ERP
Analytics, Financial Management,
and Risk Management
Be more agile and well-governed
Ultimately, transformation and growth depend on
effective decision-making and risk management—
strategic or tactical, financial or operational. This is
why it’s so vital to have timely access to accurate data
and readily available reporting and analytics.
Without the right tools, manufacturers struggle to
extract, validate, and manipulate business data for
greater insight. This lack of visibility not only makes it
harder to transform or grow the business, but also to
fulfill regulatory requirements or prove compliance.
Prior to using Epicor ERP, for example, our composite
manufacturer’s six-person analytics team had to work
with the IT department to mine data from back-end
systems to generate reports. The ease of creating
and using dashboards within Epicor ERP has saved
this time and effort, and has simplified end-of-month
financial reporting.
$50,000+
governance, risk, and
compliance benefit (PV)
$150,000+
financial management benefit (PV)
$70,000+
analytics benefit (PV)
With more accurate
information on hand
[through Epicor ERP], we’ve
been able to improve how
our employees can make
faster decisions. With a
shorter lead time, they still
have a more agile response.
—Interviewed Manager
14 | The Total Economic ImpactTM of Epicor ERP
Streamline compliance and
decision-making
The manufacturer has also been able to automate
reporting for compliance purposes, and simplify
the process of coordinating trade and shipping
compliance with different agencies worldwide.
Overall, the increased visibility delivered by Epicor ERP
enables manufacturers to improve agility through
faster decision-making, make better strategic
decisions because of better data quality, and reduce
the risk of fines or other regulatory issues.
When decisions can be made
with confidence
One Epicor ERP customer with its own injection
molding department found that clear visibility of
its cost structure, with concrete cost data, meant
it could look at a proposal for a robotic arm and
justify why the investment made sense from an
efficiency standpoint.
What decisions could your manufacturing business
make more easily with Epicor ERP?
Specific results included:
144
hours saved annually for
financial managers and
accountants
0.5 FTE
saved on the
analytics team
1 FTE
saved in compliance
15 | The Total Economic ImpactTM of Epicor ERP
Whatever efficiencies are gained by investing in
ERP, it’s important that this extends to the IT
department itself.
We’ve already seen that IT saves time if they no
longer have to help the business extract and
manipulate data. Similar time savings will apply
wherever IT no longer has to help staff work across
different systems.
Beyond this, though, our composite manufacturer
has also realized specific IT savings by replacing
multiple legacy systems—and the associated licenses,
fees, hardware, and databases—with Epicor ERP.
7 These savings exclude the cost over the three years to implement and maintain Epicor ERP, which is accounted for in the net PV benefit on page 7.
Information Technology
Simplify growth
You can create a dashboard for users on the fly and give them
insight into what’s happening in a format that they want. It saved a
lot of time for us trying to run queries and give the data to them.
—IT Manager, Industrial Goods Manufacturing
Options for growth
One manufacturer using Epicor as a cloud-based
service noted that it liked the versatility of a solution
that could scale incrementally as the business grew.
It also noted that whereas it had been unable to keep
up with upgrades for its legacy onsite ERP system,
with its switch to the Epicor cloud delivery model
it benefited from automatic upgrades and new
capabilities without additional development effort.
How much more easily could your manufacturing
business keep pace with change if it were using
Epicor ERP?
$2.3million
IT benefit (PV)
Specific results included7:
$800,000
eliminated annually in
maintenance fees and
infrastructure costs
2 IT FTEs
labor saved
$50,000
in annual backup and
recovery savings
16 | The Total Economic ImpactTM of Epicor ERP
As manufacturers step up to the challenges and
opportunities of digital transformation and Industry
4.0, they need the right supporting technology.
Epicor ERP is the result of more than 45 years of
working with manufacturers to help them ease
business complexity, realize their strategic goals,
and profitably grow their business.
You need to realize that
you are operating in a
global landscape. We
needed a system with lots
of versatility, as we had an
aggressive plan for growth.
—Interviewed Customer
Epicor ERP—The Smart Move
for Manufacturing
From a mobile-ready interface to ready-to-use
analytics mapped to the most common manufacturing
needs, Epicor ERP is designed with your industry and
ways of working in mind. As we’ve shown, it can
give you the visibility you need to drive efficiencies
and smart decision-making across your business, and
deliver measurable benefit. No wonder it’s the choice
of manufacturers worldwide.
17 | The Total Economic ImpactTM of Epicor ERP
Next Steps
Go to www.epicor.com/teistudy/ to download “The Total Economic ImpactTM of
Epicor ERP,” a Forrester Consulting study commissioned by Epicor in August 2017.
Contact us today info@epicor .com www .epicor .com
The contents of this document are for informational purposes only and are subject to change without notice . Epicor Software Corporation makes no guarantee, representations, or warranties with regard to the enclosed information and
specifically disclaims, to the full extent of the law, any applicable implied warranties, such as fitness for a particular purpose, merchantability, satisfactory quality, or reasonable skill and care . The results study is based on key assumptions
which may or may not apply to your business . The represented results and benefits are not guarantees of benefits you will receive, as each user’s experience will vary . This document and its contents, including the viewpoints, dates,
and functional content expressed herein are believed to be accurate as of its date of publication, June 2018 . The usage of any Epicor software shall be pursuant to the applicable end user license agreement and the performance of
any consulting services by Epicor personnel shall be pursuant to applicable standard services terms and conditions . Usage of the solution(s) described in this document with other Epicor software or third-party products may require the
purchase of licenses for such other products . Epicor, the Epicor logo, and Grow Getters are trademarks or registered trademarks of Epicor Software Corporation in the United States, certain other countries, and/or the EU .
Copyright © 2018 Epicor Software Corporation . All rights reserved .
About Epicor
Epicor Software Corporation drives business growth. We provide flexible,
industry-specific software designed to fit the precise needs of our manufacturing,
distribution, retail, and service industry customers. More than 45 years of
experience with our customers’ unique business processes and operational
requirements are built into every solution —in the cloud or on premises. With
this deep understanding of your industry, Epicor solutions dramatically improve
performance and profitability while easing complexity so you can focus on growth.
For more information, connect with Epicor or visit www.epicor.com.
