How to evaluate the success of your ERP implementation?

When it comes to an ERP implementation, we all strive for a resounding success While it’s true that not every implementation goes smoothly, and expectations may occasionally fall short, there are powerful ways to ensure your enterprise resource planning (ERP) system implementation is a triumph. Discover the strategies to safeguard your ERP implementation and set the stage for unparalleled success.

This blog explores the power of KPIs and how they can be your guiding metrics for the success of an ERP implementation. Let’s dive in.

Top ERP performance metrics for a successful ERP implementation 

Customer satisfaction

This is a critical KPI that businesses should track to measure the success of ERP implementation. The following are the potential impacts of ERP systems on customer satisfaction.

• Improved product quality: ERP systems streamline manufacturing processes, reduce errors, and upgrade product quality. This helps offer high-quality products to your customers that meet their needs.
• Reduced delivery times: Through supply chain optimization, ERP systems improve inventory management, reduce lead times, and expedite order fulfillment. You can deliver orders more quickly.
• Better customer service: ERP systems provide businesses with centralized access to customer data and enable faster response times to inquiries and issues.

Elevate sales potential

Successful implementation can be determined by noting an upward trajectory in sales and profit margins, accompanied by a decline in the percentage of lost sales. Conversely, if you are experiencing a decline, it is crucial to analyze the situation, identify potential shortcomings, and devise a mediation strategy to restore your ERP system and its functionalities.

• Average order size: Monitor the average order value to assess if your ERP implementation is positively impacting sales volume.
• Average profit margin per sale: Keep an eye on the profit margin achieved per sale to evaluate the financial impact of your ERP system.
• Percent of lost sales: Track the percentage of lost sales to identify potential areas for improvement.

Use these KPIs as yardsticks to gauge how new capabilities enabled by your ERP system contribute to sales improvements. Additionally, assess if any changes to your processes are required to drive growth.

Optimize workflow

Improved productivity positively impacts all aspects of your business operations. Productivity, in this context, refers to how well your business operates and achieves its objectives.

Here are the key factors to consider.

• Employee-focused KPIs: Key Performance Indicators (KPIs) related to employees provide insights into operational improvements. Consider metrics, such as transactions processed and orders completed per employee, the number of sales calls made per employee, and the average task and completion rate. These indicators reflect how employees can carry out their responsibilities after the ERP implementation.
• Simplify tasks: With ERP systems in place, employees should no longer rely on complex workarounds. They can perform tasks more systematically, reduce repetitive and intricate work such as data extraction and report reconstruction, and access real-time data for better decision-making.
• Training and support: Offer comprehensive training and ongoing support to help employees adapt to the new system. Clearly communicate their specific goals and updated evaluation criteria. Additionally, consider conducting surveys before and after implementation to gauge employee experience and satisfaction rates.

Maximize revenue

The ultimate goal of a new ERP system implementation is to enhance growth, achieve a higher return on investment (ROI), and increase profits. Here are key ways an ERP implementation can help you achieve these outcomes.

• Gain real-time insights: Access to real-time data boosts forecasting capabilities and empowers you to make more informed business decisions, respond to market demands, and optimize inventory management. This visibility allows you to respond swiftly to market changes and seize growth opportunities.
• Identify and resolve inefficiencies: An ERP system enables you to identify operational inefficiencies and take proactive steps to remedy them. This can lead to cost savings associated with redundant tasks, manual processes, and unnecessary expenditures.
• Optimize IT spending: Compared to previous technology setups, an ERP system can help you reduce IT spending. By centralizing your technology infrastructure, you can improve system performance.
• Augment resource visibility: With greater visibility over your resources, including inventory, equipment, and personnel, you can minimize downtime and optimize resource utilization.

Iterative enhancement and flexibility

Measuring the success of ERP implementation goes beyond a single assessment—it’s an ongoing journey of improvement and adaptability. The following tactics will support continued success.

• Embrace a culture of continuous improvement: Foster a mindset that values continuous progress and adaptability. Encourage employees to seek ways to optimize processes and embrace new ideas.
• Regularly review defined objectives: Periodically assess the objectives set for your ERP implementation. Are they still aligned with your business goals? Identify areas where adjustments or refinements may be necessary.
• Gain insights from data analysis: Leverage the power of data analysis and reporting. Dive into the data collected by your ERP system to extract valuable insights. Identify trends, patterns, and areas for improvement. Let data guide your decision-making process.

Wrap up

A new ERP implementation is a complex endeavor that requires careful planning and execution. Even for companies well-versed in technology, achieving measurable success can be daunting. The right ERP implementation partner will be your trusted ally who helps define and monitor KPIs to oversee the system’s launch and seamless scalability.

If you are looking for a hassle-free ERP implementation, experts at DemandDynamics are here to assist you every step of the way. Get in touch with our team today to learn more about Dynamics 365 services and receive the support you need.