ERP implementations are tough. By the time executives and project team members get to the end of the implementation, they are often ready to throw in the towel and end the pain, risk and disruption created by the deployment. Given the fact that most executives are simply happy to not blow their implementation budget or bring their organization to its knees during go-live, it’s no wonder that the last thing on their minds is determining actual post-implementation results.
If this sounds familiar because you’ve been through an ERP implementation in the past, then you’re probably not surprised to learn that not only do organizations often take more time and money than planned to implement their ERP systems but, adding insult to injury, don’t gain the benefits they expected from the initiative on the back-end. In fact, our 2012 ERP Report reveals that 50-percent of organizations fail to realize at least half of their expected business benefits. A key reason for this shortcoming is the scenario mentioned above: it’s hard enough to successfully get through an implementation, let alone to deliver an ERP system that translates into measurable business results.
The good news, however, is that it doesn’t have to be this way. A post-implementation audit helps organizations determine “benefit leakage” following an ERP implementation as well as next steps to increase ROI. Here are a few tips to help your organization achieve its benefits more effectively and more quickly:
Plan your post-implementation. It may sound elementary, but planning beyond go-live is incomprehensible to most executives and project team members, especially when they are stuck in the weeds of an implementation. However, no organization will achieve its expected business benefits without long-term planning. As proven in our experience and research, successful ERP implementations make post-implementation activities a high priority. The graphic below illustrates how just 28-percent of organizations appropriately define the “finish line” of their ERP implementations in way that results in measurable business benefits.
Focus on tangible results. If you can’t and don’t measure it, you won’t achieve it, so post-implementation audits are a critical way to ensure benefits realization. The project team should define key performance indicators (KPIs) that will drive business benefits expected by the executive team. These KPIs should then be translated into individual and departmental metrics, along with target levels of performance to be used as the basis for the post-implementation audit. Even soft benefits that are hard to quantify should be translated to tangible benefits wherever possible. In addition, business process reengineering activities can and should be prioritized to focus on those that will deliver the most tangible operational results the quickest.
Integrate “hard” KPIs with “soft” organizational change activities. One of the most powerful ERP implementation tools I have seen in my career is the successful integration of hard metrics with soft organizational change management activities. This balance ensures that the soft side of change management is focused on delivering tangible and measurable business results. Whether it relates to end-user training, organizational design or a host of other critical activities, your organizational change management plan should be designed to deliver measurable results. Otherwise, it is extremely difficult to justify organizational change management and other activities that may be perceived as discretionary, optional spending in an ERP implementation.
Use anticipated post-implementation results as a guide for implementation decision-making. Post-implementation audits can actually help guide implementation decision-making as well, mainly because they help the project team focus on items that will contribute to increased business benefits. For example, if and when a project team member decides that he or she wants the organization to invest in expensive or risky software customization, the end-state vision of expected business benefits will help determine whether or not that investment is warranted. If the expected ROI is there, then it may make sense to make that decision during implementation. Only with a quantitative vision of how the organization will perform after the ERP software is installed can project teams make informed decisions.
These are just a few tips to help your organization position itself for implementation and post-implementation success. By keeping the end-state result in mind via planned post-implementation audits, ERP project teams and executives will be in a much stronger position to deliver expected business benefits.
Learn more about ERP benefits realization at tomorrow’s interactive webinar, Lessons Learned From Best-in-Class ERP Implementations (12 p.m. ET).