Benefits to leverage from ERP
What benefits should you be working towards with a next generation ERP?
Before we can answer that, lets unpack what needs to be in place to ensure benefits can accrue from a new ERP system.
First off is to select the right ERP system. To take the risk out of ERP selection, you need to match applications’ strengths against your needs and the areas where you want to improve your operations. Detailed product demonstrations are the only way to confirm this and they have the added advantage of assessing a potential implementation partner’s skills and system knowledge first hand.
Secondly, you need to run a successful implementation project. That is sometimes easier said than done and whilst it is risky, lessons learnt and the development of risk mitigation strategies have gone a long way to safeguard the process. ERP implementations are fraught with potential pitfalls, so they need strong and structured management and control from both the company and the implementation partner to ensure success. A strong partnership with the implementer is essential.
Thirdly, user adoption needs to be complete. Change management from the top down, the development of super-users and product champions, the complete and on-going training of end users, and effective end user support post go-live, all work towards ensuring this.
And finally, you need to hardcode your expected outcomes into the project’s KPIs. In other words, the project must go into neutral gear until such time each KPI is satisfactorily met.
So, if you’ve done the 1-2-3-4 above, you’ve had a successful implementation and you’re now live on your new ERP system, what are the benefits you should be enjoying?
- Improved processes: The deployment of a new ERP provides the ideal opportunity to streamline, automate and optimise your processes and to standardise them across the organisation. The principal of ‘enter once and make available throughout’, makes key people more productive, improves your right first time rate and works towards improving your users’ and your customers’ experience. 95% of respondents in Panorama Consulting Solutions’ 2018 ERP Report improved some or all their business processes.
- Cost Savings: With one source of accurate information available in real-time, the deployment of a next generation ERP system will reduce operating and administration costs. With the ability to be more pro-active, leaders will manage operations more effectively and identify potential bottlenecks, stockouts and disruptions early thereby reducing stoppages, recalls and rework.
- Keeping ahead of the competition: New ERP systems provide new technologies which if correctly applied have the potential to strengthen and even extend the competitive advantages you have.
- Reporting: ERP software makes reporting easier and more flexible. Users can define and extract their own reports without IT intervention speeding up the process.
- Improved forecasting: When ERP data is kept in a single data source and management are given meaningful insights from clean data, improved forecasting becomes a reality when using an advanced reporting and analytics engine complemented by machine learning and artificial intelligence. The ripple effect will be felt across the enterprise; from improvements in supply chain management, working capital management, distribution requirements planning, materials requirements planning and capacity planning; to improvements in an enterprise’s ability to formulate plans and strategies for the growth and development of its operations, and growth in the products and value-added services it brings to market.
- Security: Next generation ERP systems are in the cloud. Public clouds such as Azure provide exceptional levels of data security and system uptime at 99.9%
- A mobile workforce: The ability to provide your workforce at all levels with secure and controlled access to your ERP is key in the modern workplace. A centralised ERP database allows users to retrieve and process data from in-store, home, the shop floor, or at a customer or supplier.
- System integration: With all information in a single location, the integration of all systems becomes possible. What this means is that you can now integrate different platforms such as in-store retail, manufacturing, human resources, customer management, projects and field service into a combined whole with the side benefit of consistent and accurate data available to users across the organisation. You’ll have access to customer, sales order, inventory, transport and delivery data all in one place.
- Customer Service: It’s much easier to give your customers an improved quality of service if you are using a next generation ERP application. Customer facing employees now have the tools to service customers quicker and more accurately getting it right first time. Information about marketing initiatives and a customer, their preferences and past spend empowers users to advise on promotions and specials. And the messaging and service levels will be consistent across all channels whether it be marketing, sales, call centre or web.
- Improved collaboration and communication: The use of inter‑departmental and inter‑company workflows across disciplines and the recording of informal communications and data throughout a process, ensures that those who have a part to play have access to all the information. Knowing what has taken place so far allows them to make correct decisions and a meaningful contribution to a speedy and successful outcome.
This is not an exhaustive list, nor is it pie in the sky. 77% of organisations in the same Panorama Report realised benefits within 13 to 18 months of going live, and a cumulative 78% recouped the cost of their ERP implementation within three years.
Yes, ERP implementations can be disruptive but if managed and controlled to success, they add tangible long-term benefits to the organisation.