Introduction
The Hidden ROI in Your ERP: How to Make Tech Stack Decisions Like a Venture Capitalist
By Hindol Datta/ July 4, 2025
I have been actively involved in implementing systems across different organizations for much of my career, and my experiences range from rewarding successes to sobering disappointments. Over the years, I have worked with platforms such as NetSuite, Sage, extensions to Everest and Warehouse Management Systems, BaaN, Oracle Financials, and JD Edwards. In some cases, the projects came together well, producing the efficiency, visibility, and positive ERP ROI we had envisioned. In other cases, they fell short of expectations, sometimes quite dramatically. I must acknowledge that in certain situations, the fault lay with me. Early in my career, my implementation approach was very silo-based and followed a rigid waterfall method. This gave me a false sense of control and order, but the reality was that I overlooked structural interdependencies between finance, operations, and reporting. I treated each module as if it existed in isolation and assumed that if each unit was implemented properly, the system would perform seamlessly. Predictably, it did not. Those oversights taught me lessons that no classroom or case study could have delivered with the same impact, and shaped how I now advise clients on ERP return on investment and optimize their financial advisor tech stack to maximize outcomes for both organizations and individual financial advisors.
As I matured as a leader, the mistakes shifted. It was not so much about siloed design anymore, but about failing to unlock the full potential of the ERP systems we had at hand. Often the issue was budgetary constraints, which limited the scope of implementation. But looking back, I recognize that in some instances I could have made a stronger case for additional investment by building a more compelling business case that captured the hidden ROI. I could have fought harder to frame these initiatives not just as cost centers, but as capital investments that directly impacted efficiency, accuracy, and scalability. In that respect, the limitations were not purely financial but also conceptual. The discipline of financial leadership calls for more than balancing budgets: it calls for the courage to advocate for the right long-term solutions, even if they come at a short-term expense.
With time, I came to realize that the most important perspective when implementing ERP systems is to think in terms of enterprise architecture. An ERP is not just a finance system or an operational ledger. It is the digital nervous system of the enterprise. If you start with the enterprise architecture as your guiding framework and work backward from strategic objectives, the implementation decisions begin to fall into place more naturally. What are the company’s long-term goals? What workflows are mission critical? What data must be reliable in real time? Once those questions are clear, you can then discern the right execution path, whether that means configuration, integration, or custom development.
Another important lesson was learning to recognize when to seek external help. Early on, I assumed that an internal team could shoulder most of the work and that bringing in consultants was either a sign of weakness or an unnecessary expense. That mindset proved short-sighted. There are situations where external expertise, particularly from seasoned ERP consultants who have seen a variety of business models and architectures, can accelerate success, reduce risk, and unlock potential that an internal team may not even know exists. The trick is not to outsource wholesale, but to identify targeted areas where external guidance adds disproportionate value.
Looking back across my journey, the unifying lesson is this: ERP implementation is not a checklist exercise, and it is not a static IT project. It is an evolving design problem that demands cross-functional thinking, a clear sense of objectives, and disciplined governance. Some of the pain I endured could have been avoided by adopting that mindset earlier. Yet, those experiences also shaped my conviction today: to treat ERP decisions with the same rigor and creativity that a venture capitalist applies to portfolio investments. Only then can CFOs and executive teams avoid the trap of underutilized systems and instead convert their ERP into a lasting source of competitive advantage.
ERP systems are often treated like infrastructure which one perceives as necessary, costly, and burdensome to change. They sit at the core of finance and operations, capturing transactions, enforcing controls, and serving as the system of record for everything from inventory to revenue recognition. Yet most CFOs suspect, and many know, that the true return on investment from their ERP is far below potential. And in an era where every dollar of spend must be justified, this silent underperformance is no longer acceptable.
The good news is that a well-governed ERP can deliver returns far beyond compliance and continuity. The better news is that these returns are often already latent in the system that are waiting to be unlocked through better design, smarter data usage, and more venture-style decision-making.
Yes, you read that correctly. It is time CFOs started managing ERP decisions the way venture capitalists manage portfolios by funding bets with high expected value, killing off unproductive experiments, and treating capital as a tool for leverage, not inertia.
Let us unpack what this means.
From Cost Center to Value Center
Traditional ERP investment thinking is dominated by risk management: minimize disruption, ensure uptime, close the books. These are essential. But they are not sufficient. When treated solely as a cost center, the ERP becomes a drag on innovation. Upgrades are deferred, integrations are patched, and customization is layered on like sediment: eventually choking system performance.
Venture-style ERP governance flips the question. It asks: Where is the marginal dollar of ERP investment going to deliver the greatest operational leverage? It segments investments into core, growth, and optionality buckets. It avoids overfunding low-return areas and instead prioritizes scale-up bets and those that unlock measurable efficiency or insight.
Identify the Hidden ROI Zones
Most ERPs under-deliver not because they lack functionality, but because the finance and ops teams underutilize what already exists. The key is to hunt for hidden ROI in three areas:
- Process Acceleration
Are there manual handoffs, spreadsheet workarounds, or disconnected sub-ledgers that the ERP could automate with configuration or minor extensions? Look at close cycles, AP automation, intercompany eliminations, or lease accounting. Small improvements can often save hundreds of hours per quarter.
- Data Visibility and Trust
Many ERPs are rich in data but poor in visibility. Reports are buried. Data is stale. Teams export to Excel and rebuild logic. By investing in reporting layers, APIs, and data hygiene, CFOs can turn the ERP into a single source of truth and reclaim decision latency that is costing real money.
- Workflow Integration
Does your ERP talk to CRM, HRIS, procurement, and planning tools? Can it trigger alerts, approvals, or status updates that flow into daily operations? Workflow automation across systems often delivers high returns with modest investment because it multiplies team effectiveness without adding headcount.
Adopt a Portfolio Mindset
VCs do not fund everything. They allocate capital across a portfolio, expecting some failures and aiming for outliers that return the fund. CFOs can do the same by categorizing ERP initiatives into three zones:
- Core Maintenance: Necessary upgrades, compliance, security which turns out to be generally low risk, low return. Fund as baseline.
- Leverage Plays: Workflow redesign, reporting automation, process improvements which is imbued with moderate risk, high efficiency upside. Prioritize where value is measurable.
- Optionality Bets: ML-powered forecasting, embedded analytics, AI copilots in financial operations which carries higher risk but can be potentially transformative. Fund experimentally, measure tightly, scale selectively.
This portfolio approach ensures that ERP spend is not governed by fear or vendor pressure, but by expected ROI and strategic alignment.
Design Capital-Efficient Rollouts
Venture thinking also means sequencing and staging. You do not need to redesign your ERP in one cycle. Instead, identify “beachheads” to address specific use cases where automation, integration, or visibility improvements would unlock measurable benefit. Roll those out, measure results, socialize wins, then expand.
For example, a mid-market company might begin by automating AP invoice processing inside NetSuite or SAP. Once efficiency is proven, the team expands to multi-entity intercompany reconciliation. Eventually, those improvements free up time and talent to tackle analytics, planning, and forecasting modules.
This iterative model not only derisks change but also aligns teams around value delivery, and not just technology implementation.
Metrics That Matter
CFOs must move beyond implementation milestones to value-based KPIs. ERP ROI is not measured in go-live dates. It is measured in:
- Days to close
- Time to insight (e.g., real-time dashboards replacing batch reporting)
- Cost per transaction processed
- Cycle time for approvals or reconciliations
- Finance headcount productivity ratios
- Audit issue reduction or risk mitigation scores
These are metrics that boards understand. They speak the language of capital efficiency and operational leverage. And they turn ERP discussions from IT strategy into enterprise value creation.
Vendor Management Like a Term Sheet
VCs do not just fund startups, but they govern them. Similarly, CFOs must manage ERP vendors and consultants not as one-time suppliers, but as partners with shared accountability for outcomes.
This includes:
- Structuring contracts with clear performance and value benchmarks
- Avoiding open-ended time and materials contracts that reward inefficiency
- Demanding transparency in integrations, data flow, and customization
- Ensuring internal teams are trained to own systems, not depend on consultants indefinitely
This mindset shift ensures that ERP investments remain lean, modular, and responsive and not bloated or locked-in.
In Closing
ERP systems are not going away. Nor should they. They are foundational to the integrity and continuity of modern finance. But the opportunity is no longer just in keeping the lights on. It is in unlocking the hidden ROI that sits dormant in underused modules, disconnected workflows, and stale data.
The CFO who thinks like a venture investor take the calculated bets in allocating capital based on value potential, managing performance across a portfolio of initiatives, and insisting on speed, visibility, and leverage, and if well-orchestrated, this will transform ERP from a cost line into a competitive advantage.
