Successful ERP Software implementations should be measured on business improvement24 Jul 2015 | by Natalie
Successful ERP (Enterprise Resource Planning) or business management software implementations are not about software or technology. At the end of the day the software is only an enabler. The real measure of success is business improvement. I often speak to companies who are proud of implementing the latest version of ERP software but forget to do a real analysis of the intended (and actual business improvement) outcomes.
ERP software and any other related technology is an enabler – a vehicle for change. What we want at the end of the day is improved business outcomes. Let’s consider a few key measurement criteria when implementing ERP solutions:
- Improved customer service – if you are able to ship goods to your customers faster, avoid stock-outs and can provide accurate delivery schedules to your customers you will achieve better customer service. So when it comes to ERP solutions don’t just use the software to print out delivery notes and invoices. Use your ERP solution for complete management of the customer service lifecycle. Look at every customer touch point and see how you can improve your customer engagement. Let’s consider a few examples – taking a call from your customer to provide a quote. Let’s make sure that we use our ERP solution to provide information to our customer services teams to improve every interaction with our customers. When a customer calls our customer service team for a quote let’s improve customer service by being able to provide information about:
- current outstanding orders for the customer (and expected delivery times);
- current stock availability of items we are quoting;
- available discounts for volume purchases;
- technical information and data sheets on the relevant items we are quoting;
- alternative items (if we are out of stock of a particular item);
- expected delivery dates for new orders.
These are simple examples of the sort of information that a good ERP solution should provide to help improve customer service. The importance for a customer service team is that they not only have access to the relevant information but that the information is easily available at the click of a button while talking to our customer on the phone – instant access to relevant information. Access to relevant information can be further complicated when shipments from our suppliers are delayed or we have issues shipping on time and in full for our customers. Again, access to information and a level of automation from our ERP solution can greatly assist. Think of a simple, automated alert when an order is late to be shipped. This alert can notify our customer service team (and customer) that the order will be shipped late.Provide improved customer service by calling your customer to notify them that the goods have shipped late and the reasons why. An even better use of your ERP solution – investigate the reasons for late delivery and take action to avoid further late delivery. Perhaps an OTIF (On Time in Full) delivery report to your suppliers will help manage their future deliveries and your expectations – enabling you to better service your customers.
- Improved cash flow. The lifeblood of any business. Poor cash flow can be a real inhibitor to further growth for many businesses. The ERP solution – a range of tools and reports provided by a good ERP solution to help manage cash flow. The difficulty in managing cash flow is that there are multiple moving parts. Putting all of the elements which make up cash flow together with assumptions and what if scenarios into Excel is not only time consuming but usually provides outdated data. So here is a few ways and ERP solution can help to improve your cash flow:- dynamic cash flow reporting. Improving cash flow starts with understanding your current cash flow position. A good cash flow report should enable the user to run different criteria, what if analysis and cash flow models. If our three largest customers pay us 30 days late what will the impact be on cash flow? If we only include items with a high level of certainty in our cash flow what will our net cash position look like this week and in the next two months? When will we run into cash flow problems given our current cash flow and expected sales?- promoting a fast quote to cash process. ERP providers often talk about proving quick quote to cash. This means that your ERP solution should be used to expedite all aspects of quote to cash. Send out more quotes, more efficiently, invoice quickly, provide tools for quicker cash collection and get the money into your bank account sooner.
- Staff retention. Most successful businesses have great people. Staff retention is not often associated with ERP solutions but a good ERP solution can help keep staff happy. Providing a good ERP solution for team members helps them do their job better. When team members do their jobs better and in less time with less tress you have a happier team.
We have looked at three simple examples of ERP solutions providing the tools for business improvement. Whichever ERP solution you are implementing or have already implemented make sure you consider the real business benefits. New technology should be implemented as an enabler to positive change.