Measuring Success of An ERP Implementation

ERP implementations involve high investments in terms of funds and effort though in recent times we see a number of ways ERP vendors attempting to reduce both. Having incurred large sums of money, businesses would like to know whether the implementation can be termed a success and if so what have been the returns of the investments. There can be a number of methods to assess the impact of the implementation. We may look at whether there has been better control of inventory or if there is more conversion of sales enquiries to order.

 

Here is a set of 10, completely different kind of measures, though off-beat, provide a good indication that the effort has indeed been rewarding. An advantage of these measures is that they can easily be observed.

  1. The CEO (and CXOs) conduct their operational review using reports generated from ERP

This indicates the system has been fully tested and at that level, the leadership has faith in the system. Rest of the organization would be expected to follow suit.

  1. People in Finance function leave on closing hours and don’t come on weekends

In islands of systems, finance function takes the entire load of integrating the data as Finance is the destination system. In an integrated system like ERP, the finance would get all the transactions by design. Hence, finance function may suddenly find they have lesser load.

  1. Users find ERP functionality not adequate

When users get the benefit of the system to support their regular issues, they normally find the functionality inadequate because they tend to solve more work problems than the system is configured for.

  1. Users don’t argue over correctness of data

A poorly implemented system would result in data integrity issues leading to unnecessary effort in reconciling data and inevitable blame game on who have lost the control on data.

  1. Target-blog-2XL no longer used as parallel recording / reporting system

The affinity to XL for those who are familiar with it does not go off easily. If users perceive some gaps, they would try to fill that using XL – these could be in the form of some additional transactions, calculations or reports.

  1. IT folks learn more from the users than the other way

Due to continuous usage, users pick up more knowledge about the product than the IT follks who may not have seen all scenarios.

  1. Review meeting has more of business representation and less of IT folks

When there is no confidence in the system, the business review meetings would tend to have IT folks who understand the system for just in case situations – where IT folks would try quick fixing problems that get reported.

  1. ERP vendor frequently asks for referral visits

There is no better marketing tool than sharing user experience. If users feel comfortable they may be flooded with requests for referral visits / calls from the ERP vendors.

  1. There is no loaded truck waiting at the out-gate due to system issues

A common occurrence of a problem system is during despatch, a truck would be physically loaded with goods for transportation, but the transaction would not be completed – invoice cannot be generated or the system would show wrong goods – delaying the departure of the goods.

  1. CIO spends most of his/her time with business than with IT

An indication of good implementation would be less of fire-fighting on maintenance and upkeep issues. A CIO spending his/her time more for business would mean less of maintenance issues and more focus on planning.

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About Raghuram S

I am a Management Consultant with over 25 years experience in the industry and run my own firm called Cohere Consulting since 2008 focusing on business strategy, IT advisory and program management. Prior to this I was with some of the top consulting firms in India including S.B. Billimoria, PricewaterhouseCoopers and IBM. I have participated in a number of strategy and IT delivery engagements across a wide range of industries including manufacturing, consumer products and IT Services. In addition to my consulting assignments, I also spend considerable time in industry research and teaching at premier management institutes. I am based out of Bangalore. I have an MCA from Birla Institute of Technology, Mesra, Ranchi and an MBA from XLRI, Jamshedpur. I can be contacted at raghurams@cohereconsulting.com
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