Introduction
Enterprise Resource Planning (ERP) software is considered as a complete solution to streamline everyday operations, transform business processes, reduce costs, and improve customer experience. These systems are expected to deliver value to various business functions like finance, order, procurement, inventory, supply chain, and others.
For enterprises, it is a solution that enables them to rethink their goals, processes, and strategies. However, ERP implementation is a complex and time-consuming process. Without proper execution, it not only risks your desired financial Return on Investment (ROI) but also negatively impacts operations, error handling, user experience, employee morale, and more.
Therefore, defining a clear roadmap guided by Key Performance Indicators (KPIs) is crucial for successful ERP implementation projects.
In this blog, we will learn how KPIs can help companies realize the advantages of ERP and its common benefits.
What Are KPIs and Why Set Them for Your ERP Project?
KPIs are measurable metrics that show how your company is meeting its strategic goals. In the context of ERP implementation, KPIs help you monitor the impact of the new system on different areas of your business. These indicators also help enterprises fully capitalize on the system’s benefits.
Reasons to Set KPIs for ERP:
According to a report, ERP solutions accounted for 16.8% of the global software spend, totaling $17.7 billion, and 5% of total IT expenditures. Given the significant impact of ERP, organizations must establish clear metrics to maximize the return on this substantial investment.
Listing a few of the reasons why KPIs are essential for ERP implementation.
Guiding Implementation and Integration
KPIs guide companies in prioritizing business areas that need improvement and aligning ERP systems with company goals. These indicators help companies choose the right software for their business.
Operational Efficiency
KPIs enable companies to track work efficiency in different departments, identify bottlenecks, streamline workflows, and boost productivity.
ROI on ERP
KPIs help organizations assess the financial impact of the ERP system, justify its investment, and understand its contribution to the company's bottom line.
Strategic Alignment
The key indicators help organizations align their daily operations (managed by the ERP system) with the broader goals.
Data for Decision
Effective KPIs give insights into critical data that offer real-time information on business operations and enhance decision-making process.
Project Tracking
KPIs allow you to monitor progress throughout the implementation process. If deviations from your goals occur, you can take corrective action to get back on track.
KPIs for ERP Implementation
Enterprises implement ERP hoping they can benefit from it for many years. Therefore, it is important to set short-term and long-term KPIs to measure progress towards goals.
Here’s how setting KPIs can help you realize the full potential of your ERP system:
Real-Time Visibility and Data-Driven Decisions
A well-integrated ERP provides a centralized hub of connected data sources and real-time insights into your inventory, production, and supply chain status. This empowers enterprises with information to quickly resolve inquiries, schedule timely deliveries, optimize supply chain, and minimize disruption.
Modern day ERP systems like Oracle, NetSuite, SAP, Sage Intacct, and others often comprise Business Intelligence (BI) capabilities that allow users to analyze historical and current data to generate useful information for strategic decisions.
Streamlined Operations and Cost Reduction
Enhanced Data Security and Compliance
Increased Customer Satisfaction
Conclusion
The rising importance of ERP systems in everyday operations is evident by the growing figures of the solution. The global market for ERP software is expected to grow at a CAGR of 11.9% and reach $200.7 billion by 2032. However, if you don’t see the transformative results envisioned while implementing an ERP system, then it is time to use KPIs to track and maximize the impact of the enterprising solution.
By setting clear KPIs, you can turn your ERP system from being a software application into a strategic asset that drives measurable business success. For this kind of optimization, set the right KPIs to ensure your ERP investment is long-lasting.
As a NetSuite implementation partner and gold-certified Oracle partner, Forsys has the expertise and experience to offer end-to-end services – right from assessment and advisory offerings to ERP implementation and managed services. If you are also thinking of implementing your first ERP solution or migrate from an existing system, we have the resources. Talk to us to know more.