Is Your ERP Solution Propelling Your Business—or Hindering It?

As we move through 2019, many smart organizations are taking a hard look at their enterprise resource planning (ERP) solution and contemplating the true value that it’s providing. ERP systems that have been in place for five, 10 years or even longer should be evaluated with that question in mind. The answer may point to an upgrade, modifications or even outright replacement.

So, how do you know if your business is getting full value from your ERP solution? Consider five key areas in which high-performing ERP solutions are measured:

• There’s a clear business case with measurable returns. The ERP system you are using should align with your company’s business objectives and be designed, implemented and utilized to realize measurable results. It should justify its often-considerable up-front cost within a reasonable time period after implementation (typically three-to-seven years), and then continue to add value for the foreseeable future. For example, if you spend $100,000 on your ERP solution, that investment should in turn drive a return in higher productivity, lower material costs, higher quality or another area that more than offsets that $100,000 investment.
• The solution should be relatively current, and well-maintained over time. Ideally, implementation should have occurred within the last five years; be regularly updated with current releases and patches; be enhanced so that it continues to align with business objectives over time; and have a high availability for the end users.
• Processes are well defined, and system functionality is tightly aligned with those processes. Many organizations seek to implement a system as plain vanilla out of the box or highly tailor it to the processes that have developed organically over time. The best method – a hybrid – optimizes processes and tailors the system (minimal to no programming) to those new processes.
• Team members should be heavily trained, engaged, aligned and supportive. By training the team members and engaging them in the process (with support) of aligning the system to the new processes, the team members will strongly support what they had a hand in building. Developing team members as super users (i.e., experts) who serve as go-to resources for all system users is a critical requirement for success. Additionally, all team members should be regularly trained on system usage and updates. Training that is not used or reinforced will disappear over time.
• There should be clearly defined organizational benefits and outcomes that are monitored, tracked and reported on. Ensuring that there is a system owner responsible for monitoring and reporting regularly to senior leadership is critical to realizing the desired benefits.

Oftentimes, systems are implemented with good intent. Yet over time, success is declared when the system is determined to be operational. However, due to high costs and the challenges of implementation, systems are implemented for the benefits and for improving operational performance. It is critical that the real reason for implementing the system is not forgotten or abandoned.

Do you have questions about your ERP, or other business advisory issues? Please contact David Mustin, Vice President – Strategic IT Consulting, Marcum Technology.