We’ve been talking a lot about ERP failure recently but when it comes to enterprise solutions, it’s important to note that failure is not necessarily defined the same way across the board. Bankruptcy, obviously, would be one indicator that nearly everyone would agree denotes failure but, for our money, so would employees not using the software and so would the software not being set up to produce the right results and so would management being unable to quickly onboard newly acquired sites to the system. Beyond semantics, any one of these points would seem to show that the ERP system in use was actually be hurting the business and, perhaps, its ability to generate profits. ERP systems are complicated though, which means that sometimes this conclusion is hard to come to. So how do you tell if your ERP system is having a negative effect on the bottom line?
1. Your key performance indicators show you. That is unless you haven’t defined any way to measure the system’s use, efficacy and payback. If you have, you’ll know the health of the ERP implementation and system usage at any given time across the company. The sooner you know, the sooner you’ll be able to act on the information and reset the course. And if KPIs aren’t in place, make it your top priority to implement them.
2. You can’t respond to customers’ demands in the way that they expect. A customer calls wanting to know where this part or that order or this piece of information is and your staff is thrown into a frenzy. If the system is working in the right way, your entire organization should have access to all the data they need at their fingertips . . . even when they’re traveling. If that’s not a capability the staff has, your ERP system may be – or might soon start – affecting profitability in a negative way.
3. You can’t scale your organization. A red flag of ERP failure is if the system and its usage is such a mess that an organization can’t conceive of how to either train new employees on it or roll it out to another site entirely. If that’s the case, action needs to be taken immediately to overhaul either the software itself or the components of its implementation (e.g., training, organizational change management, etc.) to create a standardized, tested and workable solution that not only allows growth but promotes it on both individual and company-wide levels.
These are just three indicators of a troubled ERP situation. There are many, many more to be on the lookout for and companies must remain ever diligent to ensure that the system is providing benefits. The alternative is, in a word, unacceptable. Download the Lessons Learned From Failed ERP Implementations webinar to learn more or, even better, contact us to see how Panorama can help your organization achieve and sustain ERP success.