While selecting an ERP system in itself is a complex piece of business, it can truly be said that the real work begins after that. In our next series of posts, we’ll look at some conclusions drawn by companies who implemented ERP. 170 of them, to be exact. The conclusions are drawn from another of Aberdeen Research’s reports, this one entitled “ERP Implementation and Training” and available directly from Aberdeen. A $399 value, it’s free if you sign up with them to be a member, here.
The benefit companies derive from fully utilizing their ERP systems, and from paying serious attention to training, show up in several ways. These include inventory accuracy; number of days required to close a month; shipments being made complete and on-time; and lower operating and administrative costs along with better schedule compliance.
In fact, according toAberdeen, the best implementers received benefits including:
- 22% reduction in operational costs (that’s huge!)
- 17% improvement in profitability over the past two years
- 46% of employees exceeding key performance metrics
- Their projects came in 6% under budget and took only 9% longer than expected (in contrast to the ‘laggards’ whose projects came in 43% over budget and 35% later than planned).
But… and there’s always a but… it’s not done without certain associated costs, pain points and pressures.
For example, over 40% of surveyed companies cited a ‘lack of internal resources’ for starters. Oftentimes, companies don’t have the IT staff or resources to handle the additional project workload. And there’s always the concern – one we remind our own customers about early and often – that employees have their regular jobs to do, in addition to the requirements (testing, consulting, etc.) associated with implementing a new system.
Additional pressures always include the need to manage and mitigate ERP project costs, and the concern (and efforts) associated with ensuring that the system contains the necessary business functionality — each of these concerns were cited by about a third of respondents.
And finally, there are the management pressures creating the need for a quick return on investment. Growing organizations want to see the quickest return possible in order to prove the money should not have been spent elsewhere.
In the last analysis, efficiently implementing ERP… engaging employees… and utilizing all available functionality possible become key determinants and essential drivers to accomplishing the desired ROI.
In our next post, we’ll look at some other drivers of success and best in class strategies for successful ERP implementations.