ROI Would you know it if you saw it?

You have purchased and implemented software, now where is the return! We expect ROI we want it immediately, and we want to see it in the bank, as in higher profits. It’s just not that easy is it?  Many businesses fail to plan for return on investment, and don’t realize how far they have come. Others know there profits have risen and the business is running better but can say with certainty whether it was the new erp system or not. Why, because they failed to plan for success.

When you select the vendor and begin down the path of implementation you must plan for success and establish benchmarks by which to gage it. Take a snap shot of you business. What are your inventory levels, what are your lead times, how often do you miss delivery dates. Review your reasons for purchasing an erp system in the first place, here you should find a list of pain points you sought to eliminate. Now that you have your benchmarks and a way to measure success, the rest should be easy. Not so fast!

Sure you have your benchmarks and now you can see the improvements but are they enough and more important could they be better. Many businesses implement their erp systems with the out of the box functionality and achieve reasonable ROI. However if they and the vendor work together and identify which business processes they have that give them a competitive edge, then customize the software to incorporate those processes ROI will be even greater. The key is in having knowing your before you start and monitoring it during implementation. Set targets based on these bench marks and check you progress through each stage of you implementation so that you can adjust when necessary.

Finally be realistic in you expectations, erp systems are robust and can be overwhelming for your employees, as you change the parameters of their day to day tasks. We always recommend a staged approach to implementation starting with the modules and processes that are in the most need of improvement. Customize only those tasks that improve you competitive advantage first over customization blow the budget quickly and eliminate ROI altogether. Once you have mastered the basic and are realizing you ROI then you can explore other areas where returns can be achieved and perhaps more customization if necessary. Remember this is a joint effort take the time to hash it out with your vendor and determine what is worth customizing and when standard functionality is acceptable. Following this approach and the light at the end f the tunnel will be ROI and not the headlight to a freight train!

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