How ERP Guidance Impacts ROI And Bottom Lines

PostedOn: 2016-11-30 14:45:31

ERP can be one of the biggest investments a company makes. Correct or incorrect use of an ERP system impacts Return on Investment (ROI), as well as every ERP touch point. The efficient management of customer investigation, responsiveness with day to day requests, the accuracy of in sequence on upward to important management decisions all require timely access to accurate information housed within an ERP system. Why then does management often destabilize the value of ERP preparation during implementation, or after as a refresher course? 

Reducing time spent on ERP training may seem like a good cost-cutting strategy as everyone has access to online help and maybe a local user group, plus most have used an ERP system before. Research, however, shows that poor ERP training diminishes the Return on Investment (ROI) of an ERP system. To take this one step further, budgeting for training can in point of fact save your company money.

2 of 5 Top Best-in-Class Strategies Concern ERP Training

Two of the top five strategies that helped Best-in-Class organizations make the most of their ERP investment troubled training. Investing in ERP training meant that companies were:

  • Up and running faster
  • Expenditure less on their implementation
  • More likely to complete their ERP project on time.

According to Aberdeen, training resulted in Best-of-Class organizations reaching their ROI twice as fast as the industry average, and almost 7 x faster than laggards. ERP training meant lower implementation costs as well with the proportion of the original budget spent on ERP being under budget for Best-in-Class organizations in comparison to the industry average coming in at 16% over budget. Laggards were the worst of budget offenders, coming in at 53% over budget. One can, therefore, deduce that an organization's perception of ERP success is in a straight line related to ERP training.

The Return on Investment (ROI) organizations grows from ERP teaching can include:

  • Improved metrics leading to better insight and smarter decisions
  • Identification through insight for best growth strategies
  • Tighter financial controls and higher profit margins
  • Ability to proactively take action to supply and demand changes
  • More accurate quoting and on-time delivery
  • Improved efficiencies and customer service
  • Greater overall competitiveness.

Refresher ERP Training Courses Fight off Inefficiencies

ERP preparation helps ensure employees are using an ERP system to it’s fullest potential. Refresher courses keep lazy habits from developing and also help new employees learn how to use the software correctly from the start.

ERP training also educates employees on how the correct use of an ERP system can have a positive impact on their daily work tasks, again reinforcing good habits. If an ERP system is used correctly, daily work tasks should be smooth for gains in efficiencies and higher levels of productivity. Efficient operations mean cost savings, happier customers, and a more competitive organization. ERP training is therefore not an area for cost cutting as the benefits of using an ERP system properly are more important than the costs of training.