What are the most common misconceptions about ERP performance measurement?

ERP performance is measured similar to car performance, car might perform very well but it depends on the driver. A bad driver can make the car performance go bad or vice versa. So ERP performance can be measured on how business users use it to optimize and improvise their business process and increase their ROI. For example, if users does not follow the process to close periods correctly , then accounting books go wrong and in turn business shows wrong numbers for investors So not only speed and uptime, other key things also drives the ERP performance.

I think longevity of ERP software usage depends on its sturdiness. It's ability to handle lot of diverse data from different sources discreetly. While speed is important, it cannot come at the cost of security. Popular softwares become more popular when more people endorse it, so word of mouth publicity works lot better than any commercial campaign or sales pitches.

In my experience, ERP performance require people leadership. It starts with a vision set in clear business objectives. Then, to lead a transformational program, you need key people, having trust and being recognized by peers and top management. Success comes from a transparent and a fearless communication top down and bottom up between Board, Strategic committees, and Project execution.

With ERP I find a false level of precision is a large issue. In one implementation the stakeholders expected more a precise forecast than the projects the team was allocated to could possibly provide. This false level of precision caused issues both in the acceptance of the tool by project management and the decisions the tool informed.

A common misconception about ERP performance measurement is that it only involves system uptime and response times. In reality, it extends to factors like user satisfaction, process efficiency, and alignment with organizational goals. Another misconception is viewing it as a one-time activity, when it should be an ongoing process adapting to changing needs. Additionally, some wrongly assume it's solely an IT responsibility, overlooking the importance of involvement from business stakeholders in defining and evaluating performance metrics.

ERPs are not set it and forget like late night broiler commercials, but rather a starting point to how you can help drive a better interaction with the business clients and drive cost to serve down

Like nurturing a garden, tending to ERP performance is an ongoing process - not a one-time planting - requiring continuous alignment of metrics to shift business priorities through cross-functional collaboration; regular pruning and care of technical and business indicators allow an organization to cultivate systems that continue bearing fruit over many seasons.

An ERP needs strong operational governance. Configuration changes necessitated by business changes can have unintended consequences. Likewise, users creating custom searches and reports can be made public and undermine the integrity of standard reports. Incremental and small changes can have outsize impacts in ERP performance and data quality. Govern carefully and maintain a ‘clean shop’.

Performance management should be tied to an overall growth utilization roadmap. A plan that measures performance along with the introduction of value based features to help users continuously gain more understanding and utilization of the ERP sytem. A yearly percentage based metrcs system will determine if the user community is truly benefiting and advancing in their use of the system. Results will determine whether corrections need to be made to enhance performance. It is a continuous process.

It is also important to ensure customisation and integration software works well with other software packages which may deteriorate over time with upgrades and incompatibility with other software versions. It is necessary to test performance of ERP modules and its integration packages while upgrading other dependent software or database packages.

ERP performance measurement isn't just an IT thing. It involves everyone across the company. Sure, IT manages the system, but everyone who uses it has a say. Think of it like a team sport—IT sets up the game, but everyone plays to win. People from different departments bring their experiences and needs to the table. They help figure out if the system helps them work better and if it's in sync with what the company aims for. So, measuring ERP performance is like a big team huddle, making sure everyone's on board and the system is a win for the whole company.

The myth? -That simply buying the tool and plugging it in will bring actionable results. In truth, it’s essential to start with good inputs; quality of data directly affects accuracy of the performance metrics. Sans good data, analysis can't bring reliable info for decision-making. CM/CI via metrics/tuning is critical. Perf measurement requires continually relevant information. Ongoing analysis identifies opportunities for improvement, with timeliness to bring meaningful adjustments to processes and systems. With continual inputs/analysis, your ERP system improves over time. (You can't 'set it and forget it"; invest time/energy needed to bring a good ROI for your ERP capability.) When budgeting for the capability, include the quality loop.

ERP performance measurements is always about how an organizations utilising it’s resources (Human, Assets, Process, Product/Services)more effectively with the ERP. How much cost(Production & Service) is optimized and how efficiently organisation is using it.

Adoption is imperative. If decisions are made in silos and do not involve testing, champion users combined with early and often training, adoption can nose-dive quickly. CICD is hard. Change management is hard. There is no “easy” button.

Like assessing engine health, evaluating ERP performance necessitates looking beyond RPMs to consider the interconnected business processes and user adoption fueling organizational movement - isolated IT metrics miss the mark; only a holistic view through cross-functional collaboration diagnoses if systems are truly driving enterprise forward.

ERP has never been a one size fit all solution but a set of capabilites. Perfomance measutements should reflect the uniqueness of each organization and recognize the dynamics of business context. I think of an ERP like a shirt. It has a basic set of features and it may fit, but rarely fits perfectly everywhere. A tailor can make adjustments but an experienced highly skilled tailor does it in a way that anticipates the future, accommodating for the uniqueness of the individual and changing context (e.g weight gain or loss). ERP performance metrics should do the same. The best ERP tailor is the one with deep industry knowledge who understands the nuances of a business in a particular industry.

First of all it has been a constant challenge to define true ERP itself and which solution qualifies to be one. Therefore just as there are hundreds of Solutions globally which call themselves ERP it's of utmost importance for business to first define their current and future business performance criteria and then match with the ERP current and upcoming capabilities as defined in it's road map.

Like bespoke tailoring, ERP performance measurement must artfully craft metrics aligned to the distinct contours and aspirations of each organization - custom cut to intricacies of industry, complexity, and objectives; resorting to generic off-the-rack standards fails to accurately shape systems to deliver targeted outcomes for unique business physiques.

From a sales perspective, it's crucial to debunk the misconception that ERP performance measurement applies uniformly to all systems and organizations. Contrary to a one-size-fits-all approach, effective ERP performance evaluation must be tailored and contextualized. Consider the individual traits of the ERP system and the organization, including size, scope, complexity, industry, and goals. Avoid relying on generic benchmarks; instead, focus on setting relevant and realistic targets and indicators that accurately mirror the distinctive situation and requirements of both the ERP system and the organization. This ensures a nuanced understanding of performance that aligns with sales objectives and strategies.

Yes after tailoring, the performance varies both non functionally and functionally with respect to specific business requirements. That's leading to Vendor support if it's customized more percentage.

From a sales standpoint, dispelling the misconception that ERP performance measurement is easy is paramount. Contrary to a simple or linear process, it's intricate and challenging. In the sales realm, understanding that ERP performance measurement involves navigating through complex data from diverse sources—ERP systems, business processes, users, and the external environment—is essential. Recognizing the complexity is vital, as it necessitates identifying, prioritizing, and implementing strategic actions for system enhancement. Sales professionals should view ERP performance measurement as a critical, non-trivial activity demanding careful planning, skills, and the allocation of necessary resources to optimize overall business performance.

ERP is a very broad categorisation of functional activities of an organisation governed by the SOPs setup by the organisation. As the size of the organisation changes, so does the operational procedures. Some SMEs have a defined workflow based on the industry and a simple plug/play ERP with high uptime is most suitable. Incase of large organisations, Customisation and ability to re-evolve with newer data dimensions is most critical. With all said, robustness in user interaction is always a key parameter in evaluation.

Performance Measurement linked with different multiple domain and different business requirements. Followed processes , Data & Integration requirements and non functional requirements which is not straightforward. Requires fitment of out of box requirements, customization with matching features / requirements and extensibility to accommodate further ERP features with high skilled ERP and domain knowledge.

While the notion that ERP performance measurement is easy and straightforward may be a common belief, my experience in working with startups has revealed a more nuanced reality. The effectiveness of ERP systems involves a multitude of factors, including the alignment of business processes, user engagement, system customization, and evolving industry standards.

Contrary to common belief, ERP performance measurement is not always easy and straightforward. It involves diverse factors such as system complexity, user satisfaction, and alignment with organizational goals, requiring careful consideration and customization for effective evaluation.

I think ERP performance is the wrong metric to look at. In reality it's organizational performance that requires measurement and constant attention. An ERP system is a tool used to optimize organizational/operational performance. And while the tool being used should be evaluated for effectiveness it is usually the one using the tool that needs the improvement.

When implementing the ERP system (and as an ongoing exercise) it will have the performance compromised if the business processes have not been harmonised with the system. Simply shoehorning existing ways of operating into it has a minimal chance of gaining optimum efficiency. Putting the effort in before starting to build is essential, and bear in mind that a good ERP system will have some degree of adaptability to user requirements without negatively impacting performance.

The Technology of ERP is sound. The methods are strong. It uses the adoption that is broken. Deeply understanding the availability of function within the suite and finding adoption techniques and the incentive s to stay the course of improvement with a lifecycle approach. Consider that you may not get all you need at once, but don’t abandon the journey. Start always with the end in mind, reward the business, reward the workforce, stop and recognize success, but keep striving for more. The enemy of better is best. Focus always on better as the best is yet to come. As you adopt up-skill for more, optimize always, exercise the next version. ERP is a house with many rooms well connected but always needs effort. ERP evolves so must we.

Misconceptions about ERP performance measurement often stem from misunderstandings or oversimplifications. Some common misconceptions include viewing ERP performance solely as a technology issue rather than a holistic business process improvement initiative. Another misconception is assuming that ERP success is immediate, overlooking the time required for effective implementation and user adaptation. Additionally, measuring ERP success only in terms of cost reduction may neglect the broader benefits, such as improved decision-making and enhanced customer satisfaction.

One of the biggest opportunities when upgrading your ERP or “back office “ software is not to consider the Front office at the same time. The front office is made of sales/ commerce / marketing & service can help drive new value and sales growth and help to pay for back office upgrades ! The biggest opportunity in the front office is b2b commerce that contributes the largest new revenue stream be it direct , sales assisted , marketplace, procurement commerce and dealer networks