You’ve successfully implemented a new ERP solution that addresses the needs you determined in your initial assessment. With all the time and effort your team has expended during the project, it’s only natural to want to take some time away and focus on other things but remember that there is almost always room for improvement. Even with a successful ERP implementation, there are likely some new challenges uncovered, some refinements to be made and some employees that need additional coaching or training. If you don’t consistently address these areas, you may find utilization of the system falling which in turn will negatively impact the benefits you are receiving from your ERP.
From personal experience, and if the various studies available are to be believed, more than half of the companies that purchase and implement an ERP solution are not maximizing their return on investment. There are a variety of possible factors for this, but one common mistake companies make is monitoring and maintaining their ERP once it has been implemented.
In the previous blog, I mentioned that your project team should stay in place after implementation to monitor the health of your ERP. This ERP “health” committee should meet on a monthly basis and assess the following:
Are the users of the system doing things correctly? If your project team consists of the functional area supervisors as previously suggested, it will be relatively easy to survey the respective users for adoption and expertise in their area. Failure to utilize the system is often a relatively simple training issue that can be easily addressed. If these issues aren’t addressed, users may find creative ways to go around the system at which point data integrity quickly becomes an issue.
Do the system and procedures align with the business processes? Hopefully, solid procedures were developed and documented during piloting. However, it can happen that an issue was missed or a process changes. If those issues and changes aren’t addressed and the procedures and system aren’t modified, utilization of the ERP and overall efficiency can quickly suffer. As with training issues, end users will quickly find creative ways to circumvent the procedures so they can execute their job functions with a minimum amount of inefficiency.
Have the needs changed? In today’s business environment, one constant is change. Customers, competitors and technology continually evolve, and your company will likely want to adapt to changing market conditions. In many cases this will affect how you use your ERP which is the backbone of your business. A good ERP software will have the ability to change and grow with your company needs. In many cases your current ERP may already have the existing functionality you need, or it can be added for minimal cost and effort. All too often, companies will not include their ERP system as a consideration as they change their processes, which will result in less than optimal utilization.
Is your data correct? A review of data throughout your system for accuracy can help locate areas where users need training or procedures need revision. For example, reviewing detailed profitability by customer order or job on the floor can reveal where routings and bills of material are inaccurate or incomplete. It is common for users to become complacent with data entry and seek shortcuts, both of which undermine your data integrity and lead to a deterioration in the value of your system. For more information on how this cycle affects companies post implementation please see this blog.
If your project team has ownership and proper knowledge of the system, many of the arising issues from the above assessment can be addressed internally. You may want to involve your implementation partner in these meetings, as the expert may be able to provide some insight, regardless of your expertise. While it is an additional cost, involving your partner in a quarterly or, at least semi-annual, assessment may help you in finding solutions in a much more expedient manner.
By consistently monitoring the health of your ERP system you will be able to maximize your return over the long term. After investing a large amount of time and effort in evaluating, implementing and training regarding your ERP solution, make sure you get the most out of it. Factoring in the internal resources and time you spent on your solution, it is likely that many hundreds of thousands of dollars have been spent. Letting all that money go to waste by not spending the 10-20 hours of collective time during the month to keep your system relevant doesn’t make sense.
Hopefully you are finding this blog series useful. In my final blog in the series I’m going to focus on those companies that have been on their current system for an extended period of time and may want to consider an upgrade.