Practical strategies to maximize ROI (return on investment) on your new ERP implementation

As organisations evolve, so also do their technology needs and what once served the business well may no longer be seen as fit for purpose. Today’s cloud-based digital ERP platforms are now an increasingly attractive proposition as they provide greater automation and deliver operating efficiencies when compared with legacy systems that may have been implemented as much as 20 years before. At some point, businesses will decide to replace their outdated, manually intensive ERP systems with more advanced solutions that take advantage of streamlined workflows and provide a cohesive corporate culture at significantly reduced cost.

While deploying new ERP technology offers the promise of significant benefits, success ultimately hinges on selecting the right solution together with it’s effective deployment. A well-executed ERP rollout can lead to a positive return on investment (ROI), but if mishandled, can easily turn into a costly mistake. With many ERP deployments failing to deliver the expected benefits, what can be done to ensure it’s a success and provides a positive ROI?

To maximise ROI, businesses must first define the specific challenges the new ERP will overcome and these are likely to include process inefficiencies, data silos and slow/inaccurate reporting. Measurable Key Performance Indicators (KPIs) should be set to track improvements which may include reduced processing time, improved inventory accuracy and faster/more insightful reporting.

Selecting a new ERP needs to be thorough and strategic process with functionality aligned to business needs to avoid unnecessary costs and it should be scalable, allow for future growth and easy integration with third-party systems. By replacing an on premise ERP with a cloud-based product should achieve a lower total cost of ownership (TCO) and will provide remote user access which will meet the needs of todays’ modern, decentralised workforce.

Careful deployment planning with the appropriate mix of internal and third-party support is essential and options include a big bang approach or a phased implementation. Adopting a big-bang strategy means that the entire system will go live simultaneously which in theory should be faster although creates a higher risk of failure. Alternatively implementing ERP gradually in stages reduces disruption and allows for problems to be corrected as they arise. A phased approach may be preferable, as it allows for a proof of concept before the complete roll out and by focusing on core areas before introducing additional functionality will support the continuous improvement process.

Resistance to change is common, especially when employees have used a legacy system for many years and a proactive change management strategy will be needed to keep employees informed and involved in the change process. Extensive user training should be encouraged to ensure users understand how to make best use of the new solution which will encourage them to embrace it. Internal champions should also be appointed to drive engagement and troubleshoot problems as they arise.

The new ERP should deliver efficiencies rather than simply replicate outdated processes with modern technology and manual tasks should be automated, creating the opportunity for value added activities such as historic analysis and forecasting. Streamlining workflows will improve decision-making and corporate performance and by focusing on best practices, businesses can reduce costs and operate more efficiently.

It's not uncommon for ERP projects to exceed initial budgets and timelines due to poor planning so preventing this from happening will require realistic budgets whilst closely tracking actual expenses. Progress should be monitored against key milestones to avoid unnecessary delays and customisations should be kept to a minimum so that costs do not escalate.

Modern ERP systems typically have powerful analytics capabilities which provide real-time data which enables more informed decision-making in areas such as inventory management for stock optimisation. Analytics will also enable sales forecasting which improves resource allocation and maximises workforce productivity.

Following the deployment process, ongoing monitoring is essential and a post-implementation review can enable the measurement of the ROI. User feedback should also be gathered to refine processes and the ERP system should be kept up to date with the latest supported software release.

A successful ERP implementation provides far more than simply a technology upgrade, it can deliver a complete business transformation. By carefully selecting the right platform, managing costs, optimising processes and ensuring widespread user adoption, businesses can achieve a positive ROI which will help support long-term commercial success.

If you are planning to implement a new ERP platform to better serve the future needs of your business then feel free to contact the experienced team at #MillenniumConsulting to run through the options and make sure you achieve a positive ROI.