A recent report by Aberdeen Group provides strong rationale for the use of ERP, as well as a number of key criteria for developing a strategy to use it most effectively. When comparing the performance of companies that have already implemented ERP with those that haven’t, Aberdeen finds that ERP is helping manufacturers perform better. Companies that have yet to implement ERP consistently perform below the industry average. Using ERP, manufacturing companies are improving their inventory accuracy, experiencing faster month-close completions, and delivering more product or services complete and on time. (It is, of course, impossible to measure the reduction in inventory levels as a result of ERP in those businesses that have yet to implement ERP, but the industry average of those that have ERP are reducing their inventory by 11 percent.) These findings are compelling.
The analyst states that it’s not just about the final metrics and implementation—its about organizations that are built to operate an ERP system at its best. Many times, this starts out just being able to measure success; best-in-class manufacturing companies are over twice as likely to have measuring capabilities in place for ERP implementations than their less effective counterparts.
The predilection to measure is one of five key criteria cited for developing an effective ERP strategy. The others are:
- Deploying cross-functional teams
Having a cross functional team that develops and maintains an ERP strategy is common among those succeeding in implementing and using ERP. Seventy-four percent of best-in-class companies used cross-functional teams to select and manage their ERP implementation.
- Leveraging ERP to standardize and streamline business processes
Looking at ERP strategy as the means to standardize and streamline business processes pays dividends. Eighty-four percent of best-in-class companies using ERP have standardized cash processes, while only a third of companies without ERP have done that.
- Keeping current to meet market growth and change
Having an ERP strategy that focuses on keeping the ERP system current enough to support growth and changes in the market makes sense. For example, systems older than 15 years tend to have 30 percent higher administrative costs associated with them.
- Minimizing customization
Twice as many companies with older systems have customized ERP compared to just over 10 percent of companies with newer ERP. Only customize what gives you competitive advantage.
Interested in receiving this Aberdeen report? Email us and we’ll send you a copy. As one of the world’s leading providers of ERP and enterprise applications, we give businesses of all sizes the flexibility needed to compete in today’s global marketplace. We’d love the opportunity to speak with you about strategies to ensure a successful ERP implementation.
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