'What Gets Measured Gets Managed' Applied to ERP

Published: August 28, 2007

by Dan Burger

You would expect companies that have major investments in enterprise resource planning (ERP) software to have an advantage over companies that don't. Well, you might not want to bet on that. Bigger is not always better and what you pay for something is not always an indicator of what it's worth.

"To achieve best-in-class performance, manufacturers must not let their maintenance dollars go to waste," cautions Cindy Jutras, a vice president and group director of ERP research at Aberdeen Group. "While it may be acceptable to skip a release, or run one release behind the most currently available, do not let your implementation lag significantly because you are leaving functionality and technology improvements largely unused."

If you're not going to make use of the technology, you are leaving money on the table as you walk away. Perhaps more accurately put, you are walking away from opportunities to become more efficient, cost-effective, and, in the end, more profitable.

"Best-in-class manufacturers," Jutras says, "must also integrate and automate all basic functions to support business processes from quote to cash, as well as estimate ROI to cost justify major expenditures before following up to calculate the actual return. What gets measured gets managed."

All this points to getting the most out of an ERP system rather than accepting old habits, falling back on the old "if it ain't broke don't fix it" excuse, and being content with the same results year after year.

It also points to a recently published ERP report by Aberdeen and underwritten by the following ERP software vendors and technology firms: Cap Gemini, Epicor, Fullscope, Infor, Lawson Software, and QAD.

According to Aberdeen's research, the following accomplishments can be attributed to a high percentage of best-in-class companies:

• 96 percent have manufacturing schedule compliance, and 97 percent on-time and complete shipments.
• They attain a 24 percent reduction in levels of inventory, with 97 percent inventory accuracy.
• They are 85 percent more likely to calculate the return on investment of ERP projects.
• They are 46 percent less likely to be running significantly outdated releases (two or more releases behind their ERP vendor's current release).
• They have implemented 28 percent more functionality and are two to nearly four times more likely to use advanced technologies such as workflow and event management.

Copies of the report can be obtained at this link.

RELATED STORIES

AMR Research Bullish on ERP Software Market

Manufacturers Don't User Most of Their ERP Software's Features, Says Aberdeen

                     Post this story to del.icio.us
               Post this story to Digg
    Post this story to Slashdot