Although there isn't a set formula for calculating ROI for an ERP project, a structured method of analysis is possible. Intangible advantages could be too laborious and subjective to take into account. However, these elements are crucial for building a comprehensive business case and frequently serve as the project's primary goal in cases where ROI cannot be determined.

The first stage is to calculate the cost of the project's many components, including hardware costs, consultation costs, and license costs, costs associated with modifications and implementation, and so on. To establish the Total Cost of Ownership throughout the stated period, maintenance fees for a predetermined time frame (let's say for three or five years) should be added. To calculate TCO, the expected expense should be spread out over the time period.

The more challenging aspect of the process comes next, which is estimating potential benefits over time. There should be much research done before predicting these numbers, and statistics from numerous survey reports should be consulted. Benefits will mostly come from enhanced production, lower operating and labour costs, and lower inventory levels. The reduction in inventory will result in the release of additional cash, which can be ascribed to a yearly value of savings based on the organization's regular internal rate of return, in contrast to the last three factors that will directly affect the profit and loss account.

The relationship between time-phased cost and benefit will forecast a time-phased return on investment (ROI), which will start out negatively and turn positively over the course of the payback period.