In Search of ERP Value
Episode 6: (8:50)
An ERP project must add value to the bottom line of the organization. That's what the Ultra team has seen time and again in the decades of service we've provided to manufacturing and distribution companies.
In this episode of Ultra’s ERP Insights podcast, host Jeff Carr, founder and CEO of Ultra Consultants, breaks down the three areas to focus on when it comes to deriving ROI from an ERP project.
ERP Value – Three Critical Areas
Most sources define ROI as a performance ratio that measures the efficiency of an investment. Listen as Jeff looks at ERP value as the direct and indirect costs and benefits of a new ERP system.
Listen and learn as Jeff breaks down ERP value in three distinct categories - answering these compelling questions:
- Productivity - how can the entire team become more efficient? Improving employee productivity is key to performance improvement. What is the value in improved productivity driven by investments in enterprise technology?
- Information - access to KPI's and information about how the enterprise works is vital for success. Does the ERP system provide ready access to data in meaningful formats?
- Management of Assets - revenue, customer satisfaction, inventory, equipment, human resources and other assets are better managed with modern enterprise systems. What are the key considerations?
As Jeff shares in the podcast, each of the categories is critical to examine for a project to generate the most value.
Shared Understanding of ERP Value
As an ERP project gets underway, management must clearly understand the needs, the alternate solutions, the cost, the benefits of the solutions, and the return on investment.
Management needs to be educated so that it understands the ROI of improved business processes throughout the organization.
In terms of ERP value in the distinct areas of productivity, teams must consider business process improvements including a more streamlined ordering process, reduction of physical inventory counts, improved production quality, better scheduling and more.
In terms of information, the value should come from access to real-time information for more accurate materials planning, integrated databases, streamlined information reporting, dashboard reporting and other uses of real-time data.
We also suggest manufacturers assess the economic impact of a return achieved from customer satisfaction, enhanced supply chain communication, improved decision-making quality, delivery performance, and more.
Keep it Relevant
As Jeff concludes in this episode of ERP Insights podcast, the most effective project teams assess how a new system saves time, effort, and improves business processes.