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Realizing the Productivity Benefits of a New ERP System

Business-process-mappingBetter serving customers and making employees' jobs easier are two key reasons why organizations implement ERP systems, according to data in Panorama Consulting’s 2013 ERP Report.

Companies want upgraded technology that will enable their employees to work efficiently and accurately, thereby improving customer service and profitability.

An employee that is less weighed down by inefficient business processes, who can communicate with ease cross-functionally, and who can easily and quickly access accurate data is a productive employee who delivers better customer service.

Panorama
But as good as this may sound in theory, most companies struggle to achieve these employee productivity benefits. In fact, again according to the Panorama 2013 ERP Report, 60% of organizations fail to realize at least half of the business benefits they expect, while nearly 50% reported that they did not realize improved productivity with their new system.

In his article for ITToolbox, Using ERP Systems to Increase Productivity, Eric Kimberling, ERP and Business Consultant, states that part of the reason companies struggle to achieve these business benefits is because they have not clearly articulated and quantified the details.

He believes that you should ask the following questions when deciding whether you have the business case to implement an ERP: What specific metrics will drive the business benefits and show that we have realized them? How exactly will we achieve the business benefits, whether by implementing specific modules, reducing headcount or via some other driver?

Kimberling says that all of these questions and others should be answered as part of an effective benefits realization plan and has a few tips to optimize employee productivity and other measurable business benefits:

Begin with a quantifiable business case. In their 2013 ERP Report, they also found that 14% of organizations don’t have a business case to start with. In order to actually achieve the benefits, the business case needs to clearly define the expected impact on performance metrics. Common productivity metrics include time spent on non-value-add activities such as gathering data and correcting mistakes resulting from incomplete information, but these metrics need to have tangible numbers attached to them to make them a reality.”

Build your business process reengineering around the benefits realization plan. Quantifying business benefits is one thing, but operationalizing and realizing those benefits is another animal. Business processes need to be reengineered and clearly defined before measurable results come to fruition. When facilitating business process reengineering activities, organizations must ask themselves, “How will this help us achieve the business benefits set forth in our business case and benefits realization plan?”

Leverage organizational change management activities to bring business benefits to life. Once business processes are clearly defined, they still need to be operationalized and integrated into the organization, which simply won’t happen without an effective organizational change management plan. Organizational activities such as employee communications, change readiness, training, and change impact analyses should all provide the finesse required to ease employees’ transitions to the new processes and systems, while ultimately driving tangible user productivity benefits.

Tribute, Inc. believes Kimberling’s tips are good ones and a necessary part of the process when considering implementing a new ERP. As he states, with an effective business case, business process management, and organizational change management tools and methods in place, your ERP implementation will be much more likely to achieve the business benefits you expect from your system.

In fact, we go out of our way to help our customers be part of the 40% that actually realizes a majority of the potential benefits of your software, with the following:

Our ROI Calculator. To determine if an investment in a new ERP would be profitable, Tribute, Inc. has an ROI calculator developed by Stratavant available on their website to calculate the savings in increased employee productivity and improved processes. Using this calculator is the first step in building a quantifiable business case and determining where you can derive business benefits.

Knowledgeable Staff. Tribute staff have the extensive knowledge to guide organizations in re-engineering business processes. Utilizing information gleaned through the sales process, Tribute’s Implementation Team, led by John Teahan, who has over 32 years working in fluid power distribution, work with customers to re-engineer business processes and implement efficient work flows. Tribute’s industry-specific features help in reducing many manual business processes, improving productivity and customer service.

Onsite Training. Once the business processes have been clearly defined, Tribute’s onsite training is key to ease employees’ transitions to the new processes and systems, while ultimately driving tangible user productivity benefits. Many of our competitors utilize online tutorials which is no substitute for an onsite trainer knowledgeable about the unique requirements of your industry.

For more information about Tribute’s products and services, visit www.tribute.com. Keep reading our blog, DisTribute, for the latest information on the fluid power industry.