With the significant effort going into planning an organization’s ERP project, it would seem the same effort would go into measuring project’s success. Unfortunately, measuring success is often a neglected part of the ERP evaluation process even though it’s a vital step to answering many questions and determining your next move. Is the project complete? Are there additional phases? Are there any loose ends?

When it comes to ERP implementation, it’s also important to remember the definition of success is different for each stakeholder in the project, from the executive suite to the project manager down to the end-users. The definition of ERP implementation success is subjective and has to be defined by your individual organization’s needs.

You’ll work with your consultant to come up with a plan for your ERP project, but here’s a general idea of that framework:

• Identify specific goals, expectations or benefits for the ERP project
• Measure the current state against the future state
• Ensure the goals are quantifiable – required for success evaluation
• Adherence to project schedule
• Budget dollars spent versus actual dollars spent
• Resolve issues in a timely manner
• Achievement of key deliverables

One you’ve stuck to the plan and implemented your ERP, now it’s time to measure your success – but how will you do it? Here are a few points to consider to get you started:

Hard Numbers

Business is ultimately about numbers, and measuring the hard numbers after ERP implementation is the most common. The hard numbers to which we’re referring include two big ones: cost savings and revenue increases. Areas to which mark success include:

• Increased Sales
• Reduced Labor Costs
• Increase Throughput / Output
• Reduced Inventory
• Reduced Operating Expenses
• Reduced Shrinkage

Key Stakeholders Affected: All (Mid-Upper Management, Project Manager, End-users)

Industry KPIs

Every organization has specific KPIs within their industry which they’ll take into consideration. In general terms, retailers may use customer satisfaction as a key indicator to their ERP implementation success by determining if their product or service is better as a result. Manufacturers, on the other hand, use cycle time as a primary indicator for success – the time it takes to deliver a product.

Key Stakeholders Affected: Mid-Upper Management

Strategic Benefits

Among the strategic advantages to ERP is giving management a better understanding and control of the business as a whole. Is ERP providing the flexibility and efficiency expected to stay ahead of competitors? Through robust reporting and a choice of dashboards, business leaders should be making informed business decisions and planning for new initiatives based on data rather than instinct.

Key Stakeholders Affected: Mid-Upper Management

Generalized Improvements

Some of the general successes are often acknowledged but can be difficult to quantify. ERP implementation may significantly improve customer relations, for example, which results in:

• Increased sales
• Increased repeat sales
• Increased sales conversion rates
• Increased customer retention rates
• Improved public image
• Quicker response times
• Fewer workarounds / mistakes

A direct cause-and-effect relationship between specific aspects of ERP implementation and their operational improvements may not alway be obvious, but it’s worth the time investment to map out.

Key Stakeholders Affected: All (Mid-Upper Management, Project Manager, End-users)

Employee Adoption / Engagement

One of the biggest steps to ensure success is user adoption. Utilized to the full extent of its capabilities, the right ERP system can do wonders for your organization’s efficiency. When users fail to adopt the solution, however, companies run the risk of losing big. Are users able to pick up the new technology quickly? Can they visualize the benefits of using the system to its full capacity? By engaging your end-users throughout the process, you increase your chances of success.

Key Stakeholders Affected: Project Manager, End-users

With your roadmap now in place, you’re ready to begin planning your next ERP project. Work with your technology partner to generate quantifiable success factors prior and be sure to take the time to measure the results of your efforts. By defining what entails a successful ERP implementation for your company and the project’s stakeholders, you ensure your ERP delivers on the expectation.

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