Enterprise Resource Planning (ERP) systems are one of the most complex—and expensive—projects an organization can undertake. But despite the investment, many ERP projects fail to deliver on their potential return. Beyond the functionality of the ERP software itself, the issue often comes down to how to maximize value after go-live is complete.

In this blog, we’ll explore what value realization means in the context of ERP projects, common pitfalls that stand in the way, and strategies for ensuring that your ERP implementation delivers impact for your business.

Maximizing ROI in Your ERP Project

Download this guide to discover the many ways ROI can be realized from a business transformation project, with areas to focus on in order for your company to achieve its transformation goals.

What Is Value Realization in ERP?

Value realization is the process of translating the potential advantages of an ERP into real-world, measurable results. While the business case for ERP projects is often based on promises of streamlined operations, improved visibility and cost savings, these benefits don’t automatically appear after implementation.

True value realization involves:

Defining clear business outcomes before implementation
Aligning ERP functionality with business goals
Ensuring adoption and process change after implementation
Tracking KPIs and taking steps for continuous improvement

Far from a one-time activity, ERP value realization is an ongoing endeavor that begins before the project even starts and continues well beyond go-live.

The ERP Value Gap: Why Many Projects Fall Short

Without careful planning, many ERP projects fail to achieve expected ROI. Here are some common reasons:

Focus on Technology Over Strategy

ERP isn’t just an IT project. It’s a strategic business transformation. Failing to approach the project with the entire business in mind leads to misalignment between what the business needs and what the ERP system delivers.

Insufficient Change Management

ERP systems are often accompanied by changes in process. This requires users to adopt new ways of working. Without adequate training, communication and support, employees may resist using the system which diminishes returns.

Lack of Defined Success Metrics

Companies often start an ERP selection and implementation process without defining what success will look like. Without KPIs tied to business outcomes, it’s hard to measure whether the ERP system is delivering value.

Failure to Optimize Post Go-Live

So, your implementation is over and you’ve reached the finish line, right? Sorry, but that’s just the starting point for optimization. May companies don’t implement improvements after go-live and end up missing opportunities to unlock more value from their ERP.

The Value Realization Lifecycle

To avoid these pitfalls, organizations can consider adopting a lifecycle approach to ERP value realization:

Planning and Value Definition

Before starting on the process of selecting an ERP system or vendor, clearly define what you want to accomplish. Are you looking to reduce operational costs? Improve data visibility? Streamline processes?

Map these goals to metrics and use them to guide decision-making throughout the project.

Business Process Alignment

Don’t automate inefficient processes; take this opportunity to improve them. Conduct gap analyses and redesign workflows to remove unnecessary steps that don’t add value. Defining the future state ahead of time ensures that the ERP system is designed to support your business goals.

Change Management and User Adoption

Change management isn’t a nice-to-have. It’s crucial for the success of your ERP project. Develop a structured OCM plan that includes:

Stakeholder engagement
Role-based training
Communication strategies

The faster users adopt and become proficient with the new system, the faster value realization begins.

Measurement and Performance Tracking

Implement specific KPIs to measure adoption, process efficiency, and business outcomes. Some examples include:

Reduction in manual processes
Faster reporting cycles
Improved customer satisfaction scores
Revenue growth or cost reduction

Use dashboards and reports to provide visibility and make improvements as needed.

Continuous Improvement

Speaking of improvements, after go-live be sure to establish a review schedule to drive continuous improvement. This may include:

Quarterly KPI reviews
Backlog of enhancement requests
Re-training sessions
New module rollouts or integrations

Your ERP system should evolve with the business.

Tips for Maximizing ERP Value Realization

Start with the end in mind: Tie every configuration and process change back to a business objective.
Don’t skip process mapping: Inefficient or outdated workflows undermine the potential of your ERP system.
Invest in adoption: There’s no value in an under-utilized ERP.
Use data for decision-making: Leverage analytics to uncover improvement opportunities.
Revisit Performance: The business will evolve and your ERP system should too.

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Unlocking ERP’s Potential

ERP systems have huge potential to transform how businesses operate. But to get the most out of your ERP investment, you need to approach it as more than just software. It’s a tool for driving bottom-line benefits across the company.

When you focus on business outcomes, start with your processes, get people on board, and keep improving over time, you set yourself up to unlock the full value ERP has to offer. Need help with ERP value realization? Whether you’re planning an ERP project or looking to improve results post-implementation, the Ultra experts can help. Schedule your free discovery call today.