A successful ERP solution is the foundation on which companies can launch new initiatives, streamline and improve existing operations, reduce costs, and grow the bottom line. But even the best ERP solutions count for nothing if they are not utilized properly.
ERP (Enterprise Resource Planning) provides the platform to automate, integrate, and digitize business processes. An effective ERP system offers multiple benefits to help with overall business performance and can help your organization with its digital transformation.
However, despite all these very compelling reasons why organizations select, implement, and operate ERP; the track record is not good. According to a researcher, 40% of all ERP implementations or extensions perform below expectations, and that 20% are scrapped as complete failures. Depending on the definition of ‘failures’, the latter figure could be as high as 50%.
Top to bottom involvement is key
Implementing an ERP system is more than just an IT project, it is a business-wide strategy to unlock multiple benefits for stakeholders. Its drivers and business objectives are firmly rooted in the business, and it has a major impact on its people, processes, and culture, so it is important to have the right approach and attitude when embarking on this journey.
For most organizations, irrespective of size or structure, change is not easy, but this can be done more effectively if you have a structured view of your organization that shows the logic of how processes, systems, data, and organizational hierarchies are designed, and moreover has the ability to change or add on to anything in that structural view. Implementing these systems and process is greatly simplified when business and IT work together and communicate effectively.
To give the implementation the best chance of success, you must have top management support, and clear goals, and objectives. Top management – preferably led by the CEO — must remain responsible and accountable for the implementation project. They will need to manage the project and be prepared to accept that there will be setbacks that could happen along the way, but how they are navigated will determine the outcome.
Change management, communication, and user education will also be important role players. You will need to communicate early, often, and in-depth with your people, or they won’t commit to using the system. Training on the system must be mandatory, and users must understand how it works and why it was necessary to implement the ERP. Training should be ongoing as the scale of the implementation, and the capabilities of the ERP system grows.
Utilization of ERP
For many executives within an organization, utilization of an ERP system is not a front-of-mind activity for most. However, utilization of the system is why you embarked on this journey in the first place, and it is only after go-live that the business objective can be achieved.
Success or failure is determined by how well utilized the ERP is, and there are strategies you can and should follow to ensure that the ERP-enabled business benefits and strategic objectives are sustained and optimized.
- Maintenance strategy for utilization ERP: There is a natural tendency for skills and processes to regress. Preventing this requires a deliberate strategy to maintain business benefits and ensure continuous ROI of the system is achieved.
Staying relevant and up to date with the system allows for continuous unlocking of potential. As your business changes so do the ERP and a strategy to ensure both are maintained and aligned is the best way to ensure long-term value.
- Improvement strategy for operating ERP: We learn as we grow and once an ERP is implemented, employees will often seek improvements by wanting to implement improved business processes and add complementary solutions. These improvements should be encouraged, a process should be applied for users to engage with and the business should manage and review this so that the risks, as well as the value add, can be considered and managed.
SYSPRO’s channel partners work to guide your project team to deliver a fit-for-purpose ERP solution, with a focus on business outcomes, not technology outputs. This ensures a successful implementation and continuous improvement roadmap is in place, to guide the business in reaping a return on investment of your ERP project for many years to come.
It is critical to understand that your ERP solution requires ongoing attention, oversight, and support throughout its life cycle. Without the correct level of attention and maintenance, your system won’t work effectively. Like with any investment it is imperative that the system keeps adding value to the organization and that the business strategy looks to ensure this is being delivered.