5 KPIs of Successful ERP Implementation

It's no secret that upgrading your organization's enterprise resource planning (ERP) solution or setting one up for the first time can be a massive undertaking. However, time has shown that it's also an investment that is absolutely worth making for the productivity, collaboration, and communication successes alone.

Having said that, once the dust of the ERP implementation has settled, it's natural to sometimes be wondering if everything was ultimately a success or a failure. Thankfully, there's a solution for that—you just need to let your business' own data be your guide.

In order to effectively track how well your system has been set up, you need to have the right key performance indicators (KPIs) and metrics in place to monitor for ERP success moving forward. Doing so is fairly straightforward, you'll just need to keep a few key things in mind along the way.

1. Downtime

While downtime may seem like an odd KPI to start with, it's also by far one of the most important. In theory, an excess of downtime is one of the major events that your ERP implementation was designed to protect you from in the first place, so it stands to reason that you would want to keep an eye on how well the solution is actually doing its job.

Keep an eye on not only the periods and lengths of downtime that you're experiencing, but what factors might be causing them. This is a great way to identify certain glitches that are recurring so that you can refine them and make things better moving forward. Remember: the lower the number here, the better your performance overall.

2. Demand Forecast Accuracy

Another essential KPI to keep an eye on comes down to something called demand forecast accuracy. In no uncertain terms, an effective ERP implementation should always be able to accurately predict future demand for your business based on your existing, historical numbers.

Therefore, the more accurately your ERP solution can monitor this forecast while also keeping track of the progress of reaching those predicted numbers, the more successful it truly is.

3. Schedule Adherence

Another one of the more relevant KPIs that you should be paying attention to post-implementation is called schedule adherence, which means understanding how effectively your ERP allows you to properly maintain your desired production schedule.

Generally speaking, an effective ERP implementation should always bring the "scheduled" number and the "actual" number as close together as possible. If your ERP solution isn't doing that, there are some changes that need to be made sooner rather than later.

4. IT Spending

Let's be honest—a lot of organizations decide to go "all-in" on ERP because it's meant to help with the major goal of saving money in the future. You want to make sure that your ERP solution is accomplishing that goal by monitoring KPIs related to how much your IT department is spending.

After ERP implementation, factors like maintenance fees, subscriptions, and expenses related to extensive customizations should be down. If they're not, there's likely a problem baked into your process somewhere that you'll want to find and mitigate as soon as you're able to.

5. Customer Experience

Another major reason why companies experiment with new ERP implementations comes down to the quality of the customer experience they're able to offer. This is about so much more than just doing what you said you were going to. It's about establishing a better connection with new and existing customers, thus creating a genuine competitive advantage for yourself along the way.

Therefore, you need to make it a priority in the early days after ERP implementation to measure as many customer-related KPIs as possible. This includes those that relate to important factors like the consistency of your service, as well as more long-term ones like orders and shipping. You'll also want to make it a priority to continually measure how many new customers you're gaining and how many existing customers you're retaining, too.

Insight is the Most Important Metric of All

In the end, it's important to remember that there is no "one size fits all" approach to any ERP implementation. Every organization is a bit different from the next, meaning that one business' ERP success might be another's ERP failure depending on the context.

Therefore, you have to look inward and define what "success" truly means to you in the first place. Based on what you're planning or what you're trying to accomplish, "success" can mean only one thing: that you actually achieved it. The specifics will change, but this core theme never will.

At ManoByte, we've been helping organizations like yours get the most out of their technology for years. If you're still struggling to determine which KPIs are the ones you should be watching, don't worry, we're here to help. We'll learn as much as we can about your organization and what you're trying to do, all so that we can stand by your side and help you accomplish these goals in any way that we can.

So if you'd like to find out more information about the core KPIs of a successful ERP implementation, or if you'd just like to discuss your tech-based needs with a passionate expert in a bit more detail, please contact ManoByte today.