Monday, April 25, 2011

Measure the ERP to improve performance

ERP performance studies are undertaken by organizations to know the effectiveness or benefit of ERP. Evaluation is an important step that helps in analyzing the contribution of ERP to an organization. However, this process of assessment itself poses many problems.

Normally, organizations have tendency to perform this process in a professional manner so that it would yield results. They tend to lose focus as the whole process gets into action. It is geared with great enthusiasm but confusions develop and mar things.

The success of an ERP project cannot be judged on the basis of unscientific evidence. Measuring its effectiveness and the improvement it has provided establishes ROI, justifies costs and lays the foundation for a continuous improvement model. But the goal of measurement is not to measure; rather, it is to improve performance and processes are the point at which this can be best accomplished.

A recently survey shows the proposition that ERP systems support business process and the measureable success of these system is dependent on the continuous examination and improvement of those processes. Metrics are the evidence upon which success can best be judged.

For a metric to be of any use to an organization, it needs to measure one of three different aspects of a process: cycle time (the percent of acceptable products produced during one cycle). All three metrics types are required to provide balanced improvement to a process.

Many companies get everything done at the right time with regards to ERP right from software selection to customization to training and implementation. They take all measures to provide the necessary impetus and invest in huge volumes even if it is pinching monetarily.

They are more particular about the benefits and are hence unmindful of the costs and investments. What happens thereafter is something to be worried about and corrected. After going all the way and that too in the right manner, companies do not bother to review the working pattern of ERP. Unless they understand this it is not possible to achieve the benefit of ERP.

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