Setting the Right ERP Project Goals
If you’re on the market for ERP software, you’ve probably the heard the spiel from multiple software vendors by now. ERP promises to accomplish a whole host of objectives for its users, including the ability to monitor and manage supply chain and production activities with greater efficiency, lowering costs and increasing revenue throughout the business. Of course, these kind of broad statements sound nice on the sales brochure, but are going to largely mean nothing when it comes to the nitty gritty reality of ERP implementation. Vague hopes and rosy-sounding projections won’t fly when it comes time to convince your C-Suite that you need ERP or to justify the investment when it comes time to show results.
No, when it comes to setting ERP project goals for your upcoming implementation, you’re going to need measurable, specific and achievable goals, including Key Performance Indicators that can provide hard evidence on the benefits of an ERP system. What do you want your business to look like at the end of implementation? How will the ERP help you to reach those goals? What part will the project team play in the progress? These are all questions that need to go into the goal-setting process, preferably before you even pick your software vendor—you’re going to need to know what you’re looking for after all. Read on for the kind of ERP project goals you should be setting at your implementation!
Specific Calendar ERP Project Goals
It should almost go without saying that a specific project timeline is the foundation upon which the rest of your ERP project goals should be built. Deadlines should be set and enforced as much as possible; the ‘vague’ ballpark figures will allow employees to procrastinate and dodge responsibility for their specific tasks, meaning your implementation goes off the rails before it even gets running properly.
Additionally, because the lifetime of an ERP project should be significant, there also needs to be a long-term, more generalized set of objectives built into your timeline. Look 5, 10 years down the line and map out what your enterprise software system will look like. Are you making room in budgets and calendars for upgrades? For significant growth in business? While your focus should rightly remain on a successful implementation and post go-live period, it’s dangerous to ignore the long term implications of your new software. In the short term, you should be segmenting your project calendar through deliverables—the next step of a setting the right ERP project goals.
Deliverables are the documents that will outline every step along the way, and should be the backbone of your ERP calendar. Deliverables will cover the entire range of your implementation, including the project plan, training strategy and a thorough documentation of all of your business processes. These documents will be central to your organization’s ability to smoothly implement ERP, as they not only outline the goals you need to meet at each deadline, but how those goals will be met. Deliverables are your roadmap, and they should be the small goals you place along the way to go-live that track your progress and keep the project team motivated.
Production Cost Reduction
Cost reduction is one of the main reasons ERP software was first built and why it still remains so prevalent in the enterprise world. ERP devised specifically for manufacturing are uniquely accommodating to lean principles that seek to produce only in line with demand, thereby cutting inventory costs. Before implementation, your project team should conduct a thorough analysis of your production costs across the board, and then match that with the proposed savings ERP will allow. Projected savings should exist in any area that the software will be involved in; time wasted on inefficient manufacturing processes, scheduling, inventory, financials etc. You need an estimate for cost savings because it will be the baseline of one of the most important ERP Project Goals of all, ROI.
Return on Investment (ROI) is, quite rightly, one of the core baselines by which ERP project success is measured. By combining your TCO with the money saved by implementation, you can begin mapping out your goal ROI for the ERP. The projected ROI decision needs to be made at the beginning of your implementation—otherwise, how will you justify the investment to executives and stakeholder? From the first step of the project to the last, that projected number should be kept in your mind with every decision made on the project. If a certain move or software customization isn’t a necessity, and will be making that ROI harder to reach in the long run, don’t go for it.
Along with the long-term cost estimation of the ERP system itself, project teams need to think about how the ERP software will slot into the broad future of the organization. No ERP project can be a silver bullet that magically comes into a company and fixes all of its problems or supports every single business process. Some companies find that the best fitting enterprise software systems are built from a patchwork of ‘best of breed’ systems from different vendors, while others spring for the ease of simply running one monolithic system. If you are going to go down the best of breed route or plan on integrating any other software with your ERP (be it CRM, marketing automation or e-commerce software), you need to build these objectives into your plan. Obviously, you don’t need complex details for every single project you can envision in the company’s future, but you do need to consider long-term business growth and objectives when you are setting ERP project goals, as they will be critical when it comes time to select your software and whether it will be amenable to your ambitions.
Functionality and Ease of Use
Yes, ERP success needs to be measured on KPI’s and hard numbers to justify its cost, but it should be equally judged against its true functionality—will it make your employee’s lives easier in the long run? It’s crucial that you work closely with every potential ERP end user in your company to understand their day to day tasks and how to align your new software to help streamline those tasks. What specific processes will your ERP be intended to support? Go through the modules you are implementing, where they will be implemented and what each workflow will look like once the system has been put in place. User adoption needs to be a priority when it comes to your ERP project goals; if no one uses the system to input information or support their work, it is just an empty piece of software. Certainly not worth the significant investment you made in it.
Your ERP project goals will need to cover a wide range of factors and figures within your company in order for the implementation to have the structure it needs to succeed. Aside from Key Performance Indicators like ROI and cost reduction, an ERP project team needs to keep broader goals in mind—include ease of use, user adoption and the long term sustainability of the software. ERP software is a significant investment of both money and time, and it is intended to last many years for an organization, so your goals need to extend the lifetime of your software. Whether that timeline includes intended upgrades, integrations or significant business growth, you want to be prepared for any change when it does come along. You don’t want to find your sales team is suddenly in need of new software that won’t integrate with your costly ERP, after all. Through combining specific, realistic short term ERP project goals with broad, long term plans for the future of your software and your business, you can build a solid structure for your ERP system to thrive off of!
Whether you need help building your own set of ERP projects goals or you’re just setting out on an implementation and don’t even know where to begin, get in contact with an expert at Datix today! We have over 18 years of experience helping clients select, map and implement ERP systems that are aligned with their business processes—we can help you at any stage and with any of your ERP project goals!
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