A recently released survey by Mint Jutras of more than 300 manufacturers and distributors about their ERP implementations disclosed that the majority were pleased with the results. The respondents are in leadership roles at manufacturing and distribution companies with income that goes beyond $25 million annually and have deployed ERP systems. Contrary to the impact left by well publicized, expensive ERP implementation failures that many people are aware of—Vodaphone, Target Canada, Hershey’s and Waste Management, among others—the majority of companies implementing new ERP possibilities are, by and large, reaping the advantages that the technology supplies and satisfied with the results.
 
It’s understandable that executives in the C-suite approach improving enterprise technology solutions with trepidation. They are complicated to substitute or upgrade and business continuity can be impacted, something no company wants to endure. All in all, an executive’s professional reputation is at risk with an embarrassing and expensive failing. It could even result in the loss of a job or reassignment to a less important position within the company.
 
The results of the survey paint a vastly different picture. More than 67 percent of the manufacturers and distributors queried stated their implementations as profitable or very successful. A small 2 percent described their implementations as “not very successful” and only one of the 315 companies considered its ERP implementation a failure.
 
Why Tackle Challenging Technology Implementation?
 
While the reasons many executives are reluctant to embrace change are clear, the reasons for applying a new or upgraded technology solution are considerable. A full 82 percent of the companies surveyed achieved ROI within the time forecast. Not only were the more aggressive companies more likely to achieve full ROI, they were most likely to do so within the time anticipated, even though they set the bar higher than the less demanding companies. We urge clients to try to achieve ROI within two and a half years, that we identified as the industry standard. The ROI comes from a variety of places with reduced IT costs being the maximum factor at 40 percent per the survey. It was followed by reduced inventory levels (38 percent), reduced cycle time (35 percent) and reduced headcount dedicated to manual data entry (32 percent).
 
Today’s newer architectures and technologies, especially those built on microservices, make solutions better to develop and preserve. Further savings may be derived by opting for a SaaS model as opposed to the traditional on-premise deployment model. No capital expenditure is required with no need to build and handle a data center. It also minimizes the need for dedicated IT staff that can be redirected to other, more strategic positions. With less hardware costs and no up-front license, fee you have lower startup costs. Subscription-based rates gives the option of accounting for costs as operating expenses rather than capital expenses.
 
Key Success Factors
 
The survey uncovered what went right for the majority of the companies and what went wrong for the less than successful efforts. A consistent theme to the responses had more to do with the organization’s people and processes than with the software itself. Well executed planning and preparation, as well as visible support from top management, pays off.
 
While the study did not find a single, overriding factor when unsuccessful implementations were considered, the lack of proper business process re-engineering and a weak evaluation of the solution selection based upon those processes were determined to be primary reasons for lack of success.
 
Key Takeaways
 
It is crucial for companies to set targets before starting on an ERP deployment. Business cost savings and performance enhancement are frequently cited as reasons why companies opt for new enterprise technology solutions but if they don’t establish specific, measurable goals, they are not likely to achieve as much improvement as is possible with the new solution.
 
It’s crucial to be critical during the goals-setting process and determine if you are achieving for the full potential that will provide your company with a competitive edge versus your competitors. If this is a difficult task for internal resources, then take part in an independent third party that can recognize realistic objectives and outcomes.
 
My closing thought which was confirmed by the Mint Jutras survey is to be strong, embrace new technology and all the benefits it can bring but prepare for the deployment in a innovative, strategic fashion. The technology has never been better and in order to make sure continued success in a crowded, challenging marketplace, take the challenge of leveraging new technology solutions to develop operational efficiency and competitiveness.
 
This article is originally posted on tronserve.com