Whether you are looking to purchase a new enterprise resource planning (ERP) system or leverage a legacy system, the following tips and advice can help you improve your Return on Investment (ROI) from your ERP project.
Choose your ERP system carefully.
Adopting an ERP solution that best suits organizational needs can be an enormous task. As a result, many IT executives jump at the first solution they see – and wind up disappointed (or worse).
That’s why we strongly advise doing some online research. There are numerous websites which offer software comparisons and ratings, which can make this daunting task more manageable. And not every ERP solution may be right for your business – or business processes. Remember, ‘Best in Class’ is not always the best solution.
Define “success” for your ERP system.
Instead of the traditional ‘on-time, on-budget’ delivery of systems, success should be defined in terms of specific, measurable business benefits that the system delivers once it is actually used.
Assign executive ownership for user adoption and ROI.
Organizations need to assign a senior executive to be accountable for ensuring the [ERP] system is used effectively and delivering measurable benefits to the organization. Moreover, we suggest tying ERP performance – adoption and ROI – to the executive’s performance and compensation plan. Quite simply, the executive needs a vested interest in ensuring the system delivers the benefits the organization needs.
Make data quality a priority.
While an ERP system will help you coordinate the where, when, why and how of your data flow, the value of the system is largely determined by the quality of the data moving through it. To make the most of your chosen ERP system, organizations should:
- Perform a data quality audit before ERP implementation;
- Identify business intelligence rules that can be integrated into your ERP as you implement; and
- Invest in an ongoing data quality solution, a third-party data cleansing software package that can work with your ERP or by purchasing a data quality module provided through the ERP itself.
Define business rules and processes.
To get the most out of your ERP system, define business rules guiding business processes and turn these rules into system settings. That way, the system will enable near-real time reporting on transactions and an audit trail will be maintained over time when business documents are reconciled in a timely manner.
Customize the platform to suit your business needs.
ERP software is typically developed as a one-size-fits-all solution. However, implementing a solution out of the box in this manner can lead to reduced user productivity, poor quality reporting and user sabotage with the intent to prove the ineffectiveness of the system.
To get the most out of your ERP system, we recommend working with the software manufacturer or a certified professional services partner to help you customize the software, such as hiding unnecessary fields, adding additional fields and turning specific features on or off.
Customization is the key to a successful and efficient ERP solution, and the degree of customization possible should be part of the software decision criteria.
Invest in ongoing ERP software training.
One of the biggest mistakes organizations make in terms of leveraging their ERP systems is they do not provide ongoing training on how to integrate and use the ERP system. Organizations do initial training, but once implemented, employees move on and their replacements must be trained and existing employees must be cross-trained on related functionality.
Make sure your ERP software is updated.
Many companies assume that their ERP system isn’t meeting their needs. Meanwhile, they are four versions back of the current release, and a simple upgrade will solve the problem – and often provide additional functionalities.
Business Intelligence (BI)
Business intelligence is just a fancy term for ‘getting information out of your ERP system. Rather than fearing BI, organizations should embrace it, especially as most ERP software packages now include intuitive, easy-to-use BI capabilities. And by using these value-added BI capabilities, you can more easily query information stored in your ERP system, analyze trends and make informed business decisions.