How to measure the value of ERP?As an ERP software provider, often asked about the value an organization is going to gain by investing in a new ERP software system.
How will the manufacturers and distributors see the revenue generated and how will that translate into ROI?
1. Team for ERP project team:
A team should be created to develops a strategy to review all business processes impacted by the use of an ERP software solution. The team identifies all functions and business process flow and gathers the reports and analyses from sales, inventory, accounting, quality and many more.
2. Cycle time:
For most of the manufacturing industries, cycle time plays an inportant metics as it measures how fast the business is responding to customer orders and satisfying ther order fulfillment. Basically Cycle time is the time taken to takes to manufacture a good and delivered to the customer from the moment the order is received. Faster cycle time means more effective processes and a higher customerfulfilment rate
3. Demand forecast accuracy:
Product future demand is another key metric for measuring business success once an ERP system has been succesfully implemented. An ERP system should be able to predict accuratley of future demand based on previous numbers.
4. Customer satisfaction:
How ERP affects the end customer is another major metric. Is the new ERP software system is bringing customer satisfaction, Is the service getting much better and faster. We canknow this by listening how the customers are responding and the increasing number of new customer.
5. Labour benefits:
How the ERP platform has impacted labour while employees are the main users of the ERP system. Are they satisfied with the new system process, Does ERP helping the staff to accomplish goals in less time.
Making the business case for change:
The team list the benefits identifiedwith present ERP system, documenting ROI for each. It’s critical task to link the improved processes to improved performance by optimizing current state of business growth. The team can document how the investment in a new ERP system has reduced the inventory costs and improved cycle time, etc.