The majority of large ERP software implementations are executed as IT projects rather than strategic business initiatives. An IT budget is established, an ERP implementation team is assembled, significant investment is made, and a “go-live” date is embarked upon. The measurement of success: the project is on-time and on-budget and the ERP system is being used. True return on investment, or ROI, is an afterthought.
As companies begin to scrutinize their return on investment, many are recognizing that they have made a substantial IT investment and undergone considerable organizational change to, in effect, alter the face of their IT infrastructure, with minimal performance improvement in their core business operations. In many cases, ERP software configuration (aka flexibility) has allowed poor-performing, fragmented business processes to continue within the new ERP system.
The power of today’s ERP software packages is that they allow different parts of a company to operate more effectively by sharing information and workflows through a tightly integrated ERP system. The enterprise software also helps to systematize and reinforce discipline around what were previously ad hoc and disparate business practices.
The challenge is to define and implement new process and organizational designs, enabled by the ERP software solution, to rapidly produce measurable business value. This emphasis on integrated business transformation, in lieu of a narrowly defined ERP implementation, is critical for achieving business goals and maximum return on investment.