Manufacturing organizations sometime have lofty expectations for the ERP implementation process. While expecting a lot of new software is certainly warranted with the money being spent on it, businesses must be sure they have researched in full and understand the benefits they will be getting from the program. Being realistic with not only the expectations but the amount of time that will be spent on implementation, training and the roll-out will be essential toward calculating the correct return on investment
One thing that cannot be accounted for but should be expected is the inevitable bump in the road or point where things come to halt. Businesses must realize that completing the ERP implementation correctly is far more important than getting it finished quickly, so team leaders, executives and employees should be sure to properly align their expectations and expect the unexpected. Issues that come up should be brought from the team to project leaders right away and solved in quick but calculated ways to help ensure the program is solved.
It will be essential to ensure there is a link in place between business processes and ERP in its entirety. A recent white paper by Dynamic Manufacturing Solutions and the Aberdeen Group said 55 percent of the best-in-class manufacturing organizations tie their products and operations together, as the cost savings and efficiency gained help to utilize the software in full. This also creates a cycle of continuous improvement, as well as quick progress and evolution in the software.
Michael Donovan of Reliable Plant said there have been some recent complaints about the ROI of ERP, but this is likely due to companies not driving the right management and automation improvements with the software. In addition, companies often do not take the time to ensure the software is doing all that it must do to help the organization grow and expand.
“These two points may seem obvious, but ERP and supply chain management are rarely approached in this manner the first time,” he wrote. “As a result, many problems arise during and, worse, after implementation. This usually necessitates a re-implementation effort or at least a major tune-up.”
More than ROI
Even though it is important to have a measurable cash return on the ERP implementation, companies need to realize that it is about more than money when bringing in these programs. There are certain aspects that ERP will improve that are not tangible and are not easily measurable.
ERP is a system where CEOs and executives have to put aside certain measurements, Donovan said. Once it is well implemented and integrated into a business, there will likely be results such as communication, improved decision making and better performance from manufacturing employees that may not necessarily be able to be measured or analyzed with statistics. However, the business may very well still be efficient and working better than ever.
A separate white paper from Dynamic Manufacturing Solutions and Aberdeen said measurement along the implementation and use of ERP can help businesses see what works and what does not. While not the end-all of the program, seeing what is working and what should be fixed will help enterprises thrive.
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.