As more businesses of all sizes adopt Microsoft Dynamics NAV and other enterprise resource planning (ERP) platforms, company decision makers can maximize the solution's return on investment by making sure the adoption process comes in under budget and is best utilized from the start, according to Smart Business.
Increasingly, companies are hearing about the data-drive success stories of other firms and are turning to more advanced solutions for collecting and processing information. ERP is not only useful for enterprises, but also for smaller organizations. For example, the Aberdeen Group reported earlier this year that 82 percent of all companies that bring in $50 million or less in revenue every year have an ERP platform in place.
However, just because these companies have elected to use a NAV system or another ERP solution does not mean they are getting the most from their investment. In particular, one of the biggest roadblocks to success, according to Smart Business, is that many ERP implementation projects come in far over their initial expected budget. Zinovy Radovilsky, professor of management for the College of Business and Economics at California State University – East Bay, told the news source that the majority of firms have either little or zero experience working with a software solution that affects every department within the business. As a result, business decision makers fail to take into account the true disruptive nature of ERP, which means that initial estimates undervalue the platform's effects on company-wide processes.
"The scope and complexity of ERP implementations makes forecasting treacherous," Radovilsky said. "While cost overruns can't be eliminated, they can be managed with the right tools and tactics."
Four ways to make ERP successful
In order to maximize a platform's ROI, Radovilsky recommended that companies looking into ERP follow these steps:
- Have the right leadership team in place: Because ERP can be so disruptive, companies must make sure that those in charge of facilitating the adoption process are familiar with the common roadblocks. That way, foreseeable challenges can be addressed early on in the implementation, thus avoiding costly mistakes down the line.
- Thoroughly involve all stakeholders: ERP platforms affect all internal departments within an organization, so all those that may come in contact with the solution should be aware of its purpose and know how to properly use it. Smart Business recommended that companies hold multiple training sessions with employees to best maximize the adoption.
- Adopt a piecemeal approach: When any solution is immediately put in place company-wide, an initial error can disrupt operations for many end users. To avoid this scenario, Radovilsky suggested that businesses first have one or a small number of departments use the ERP platform before it is rolled out to the rest of the organization. This way, any issues can be contained, and its effectiveness can be more easily observed and studied.
- Automate as many manual processes as possible: Microsoft Dynamics NAV is only as good as the quality of data it contains. To make sure end users are only accessing and studying accurate information, companies should also adopt automated tracking systems that remove as much human error from processes as is possible.
Learn how to define your ERP strategy by downloading the white paper entitled "ERP in Manufacturing: Defining the ERP Strategy" from the DMS website today.