Defining ERP Success for Your Organization

All Articles From Eric Kimberling May 1, 2013

One of the interesting takeaways from our 2013 ERP Report released earlier this year is the apparent confusion between the perceived success and actual results of ERP implementations.  While most ERP projects still take longer than expected, cost more than expected and fail to deliver expected business benefits, our research indicates that most organizations are still generally satisfied with their ERP implementations.

Satisfaction

This begs the question: how can companies experience such dismal implementation results yet still feel a sense of success at the end of the day? Our experience with hundreds of ERP implementations over the years suggests that there are a number of reasons for this dichotomy. First and foremost, most organizations don’t have a clear definition of success. Assuming the new ERP system provides at least an incremental improvement to their business operations, chances are that executives and employees are going to feel at least somewhat satisfied with their ERP system once the transition pains have subsided.

Below are three things that will help you and your project team achieve ERP success:

1.    Clearly define success. We hear it all the time: for some organizations, anything is better than the ERP system they currently have in place. However, most organizations also aren’t spending millions of dollars on new ERP software just to realize an incremental improvement. Instead, most are looking for a tangible return on the investment in that software, just as they would expect from an investment in an acquisition or any other major capital investment. The problem is that executives generally don’t clearly articulate to the organization what exactly they expect from the new ERP system and how they will determine whether or not the implementation is ultimately successful. The business case should be an important mechanism to not only justify the investment in the ERP system but also to define what will constitute ERP success.

2.    Articulate expected process improvements. Similarly, expected business process improvements should be clearly defined and articulated to the organization. It’s not enough to simply suggest that the software is going to make business processes better. Those process improvements should be clearly defined and documented for employees so they can enable some of the process improvements. Your people – not the ERP software – will ultimately determine whether or not the process improvements stick, so rather than assume people won’t revert back to their inefficient manual processes and spreadsheets, it is much more effective to define the expected business processes and communicate changes to employees accordingly. This will also make your organizational change management activities much more effective in the long-run.

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