Want to increase your ERP’s ROI? Keep it lean!
Let’s face it, if you have an ERP system that’s more than 5 years old, then by now, it’s gotten pretty overweight. Presumably, you’ve struggled to get a little ROI out of it too, which only weighs heavy (literally) on its years. What’s a few extra pounds of ERP? After all, many of us suffer from the dreaded enterprise software bloat. The good news is that it’s not too late to shed a couple of pounds, keep them off and keep your ERP… lean.
As an avid sports fan and junior league coach, you first have to put an exercise plan in place and with any luck, stick with it to achieve even the smallest goal. I subscribe to three simple ERP dieting rules:
- Redesign business processes in moderation without radical re-engineering. In other words, make simple modifications to the diet without resorting to drastic yoyo measures.
- Prioritize tasks and start with the easier, less expensive fixes first. What I mean is, eat the low hanging fruit before trying to stomach the harder-to-digest changes.
- Start a reasonable, manageable exercise plan. This should include measuring key performance indicators (KPIs), testing thoroughly (pounding the keys), eliminating unnecessary functionality and fully documenting standard operating procedures (SOPs) for your system users.
Unfortunately, everybody knows that keeping the weight off is the hardest part. Here are a few good ways to cut the flab from your ERP software and keep it off. Fortunately, they’re a lot easier to stomach than you might think.
Empower users to do analysis on their own
In the early days of ERP, any changes to sessions or screens were considered a customization. Today’s customizable web interfaces, data extraction tools and ability to personalize screens give users the ability to do their own analysis without waiting for IT to build custom tools.
Today, companies can energize users to exercise on their own, as it were. They can easily use Microsoft Office Integration, take advantage of user interface personalization with a Web UI or use an ERP system with built-in business intelligence (BI).
ROI: From diverting IT staff to much more productive use of their time, cutting down on customized reports, reduced training costs and many other benefits.
Don’t go down customization corridor
Know this – customizations are addicting and way back when, companies were quick to add a generous helping of customization, virtually padding the software. In terms of manufacturing ERP software, it starts with adding functionality that wasn’t in standard. This makes you a slave to consulting firms, who are all too happy to indulge your appetites for more add-ons to the old system rather than implementing a new ERP that has much of the functionality you need already there.
Fortunately, most of the old customizations were reports and today, there are lots of options to replace reports without writing reams of new code. You can kick the customization habit by upgrading your ERP to the latest version, take a bolt-on approach with 3rd party add-ons, buy, don’t re-invent the wheel, provide “self-service” options and streamline your business processes.
ROI: From decreased IT headcount devoted to customizations, reduced consulting cost for programming, a less expensive upgrade path for your ERP system, decreased complexity and better user adoption.
Always continue to improve
There’s always panic and excitement when you go live with new enterprise software. When things go right, there’s also a euphoria that accompanies a new way of doing business that promises efficiencies and (hopefully) user satisfaction. Really staying fit and preparing for growth means a commitment from the entire organization, particularly management, to not let inertia creep back in. That’s the only real way to make your weight reduction plan stick.
To succeed, system users have to commit the new processes to habit. Some popular ways to make this work include continuous learning and training plan to keep users fit, KPIs to measure progress in the business, Total Quality Management (TQM) to reduce waste and lean initiatives for manufacturing to speed throughput.
ROI: From less waste in operations processes, higher output, better productivity, more management control with fewer resources and decreased inventory.
The good news is that I’ve seen many companies successfully put their ERP systems on strict diets and keep the weight off after they go live. They keep getting better as they practice, clean up their data, reinforce their new best practices and kick their old customization habits.
In order to grow and compete with faster and smarter rivals, companies have to be lean, mean fighting machines. Got it? Now, pass the potatoes, please.