As we step further into the 21st century, more and more mid-sized manufacturing companies can look back on at least 10 years of use from their existing ERP systems. Most are still doing a capable job, and despite some shake-out in the market, most are still supported by their original vendor. But how many companies can say that their system still gives them a positive competitive advantage? How many businesses are actually constrained by their inflexible or overloaded IT systems.

The return on investment (ROI) arguments for a green-field first-time ERP implementation are well documented - major reductions in stock, vastly improved information on costs, and much stronger control of the manufacturing process. However, if these benefits were achieved 10 years ago, can they be used again to justify a more modern replacement system? Well, in the first instance, many companies do not achieve those basic benefits, either because the first implementation was not very successful, or because the business has changed and the ERP system is no longer matched to it.

Over and above this, the returns from implementing a modern system tend to be described in terms of improved customer response, higher machine utilization, improved supply-chain connectivity and better information about every aspect of the business. These "soft" benefits can be much harder to put a price on - but we really should try.

What is the cost of a lost customer? Well in the current climate, you shouldn't assume that there are plenty more around. Assume that the business is lost forever and count the lost margin. Wrap into this the supply-chain issues too if you are in automotive or retail. For improved machine utilization, assume just 5% and see if that would avoid the capital, space and staff costs of an extra machine. And for better company-wide information, consider the cost of bad decisions. You could even add up the cost of your senior management team and set aside 20% of that as a tool to improve their effectiveness! Now be more positive and see how much extra business you could win by being more effective, more competitive and more fit.

If these benefits make a strong case for an ERP replacement, remember also that you won't start to make the gains until you have the system in and working - so keep it in your diary as a key project for 2003.