At a glance
Measuring success is key to ensuring that an ERP project remains controllable. It requires a clear initial analysis, precisely defined goals and KPIs that make progress, quality, costs and acceptance measurable. Only with reliable key figures can deviations be identified early on, decisions be made on a sound basis and the actual benefits after the go-live be tracked.
The introduction of an ERP system is always associated with high expectations. The new software is designed to significantly improve processes, reduce costs and increase sales. But how can you find out whether the implementation is actually successful? Quite simply, you can read it off on the basis of certain key figures.
In this article, we will show you how to professionally prepare and carry out performance measurement in an ERP project – from defining clear objectives to selecting the right KPIs. You will also get to know the most important tools and methods.
Why is it so important to measure the success of ERP projects?
An ERP implementation can cost a lot of effort, time and nerves. This is why many companies usually ask themselves the following questions: Is it worth all the effort? Are the defined goals actually achievable so that the investment pays off in the end? Or is the entire ERP project possibly not worth it at all?
The answers to these questions can only be obtained through verifiable performance measurement. Among other things, it provides
Good to know: Project success can be measured not only after the ERP system has been implemented. It is
Indispensable as a basis: current status and objectives
Status quo analysis
Success can only be measured if you prepare it carefully before the project begins. The first step is
Content objectives
The next step is to define your project objectives. You derive these from the corporate strategy. Only in this way can the new system support the long-term development of the company.
The following objectives are usually relevant for an ERP implementation:
- Automation of recurring activities and business processes
- Process optimization through the creation of a uniform data platform and fewer manual interventions
- Cost reduction through better use of resources, optimized inventory management and lower labor costs
- Compliance with legal regulations through digital data exchange and automated documentation
- Increased productivity by reducing repetitive tasks
- Improved customer service through faster processing of inquiries and orders
Formal target definition
Once you have defined your goals in terms of content, it’s time to fine-tune the form. Vague statements such as “We want to increase sales.” provoke different interpretations and make it difficult to monitor the project. The following wording is better: “We want to increase sales by 60 percent in our German branches by the end of 2026.”
Ideally, you should align your ERP goals according to the SMART system. An acronym that comprises five criteria:
- Specific
Formulate your goals as precisely as possible. Always use the five W questions as a guide:- What do you want to achieve?
- Why is this important?
- Who is involved?
- When do you want a result?
- How do you plan to proceed?
- Measurable
No measurable success without measurable goals. You should therefore setspecific values that you want to achieve by a certain date. This will allow you to identify problems early on and take countermeasures if necessary.
- Accepted
Whether and how you achieve your goal depends first and foremost on your employees and their motivation. Therefore, make sure you have achievable tasks and take your employees’ concerns seriously.
- Realistic
Unrealistically high targets are usually ignored and reduce the quality of the objective. It is better to define realistic goals that are achievable for everyone involved in the project.
- Scheduled
A lack of scheduling damages the organization of your ERP project and leads to different interpretations. For this reason, goals should always have a time limit.
You therefore receive tangible evidence of whether you have achieved or failed to achieve your goals through the ERP implementation.
How to measure the success of an ERP project with KPIs
If you have defined clear, measurable goals before the ERP implementation, you can evaluate them later using key performance indicators. With the help of key performance indicators (KPIs), you can identify changes, determine the performance of your company and measure the success of your project. This gives you
1. important KPIs during ERP implementation
Focus on the three areas during the project Budget, schedule and quality. Carry out regular progress checks on the following KPIs:
Budget compliance
Compare the project costs with your budget. If the actual expenditure exceeds the planned expenditure, there is a need for action.
Schedule fulfillment
Check your milestones continuously. If your project progress lags behind the planned deadlines, the timely achievement of objectives is at risk.
Number of change requests
Continuously reflect on the quality of project planning. The more amendments are submitted, the more inadequate the planning is.
2. important KPIs after ERP implementation
Once the project is complete, look at all KPIs that are directly linked to your strategic goals. Relate the baseline data to the results and assess whether the KPIs have changed positively or negatively. Continuous monitoring of the following KPIs is necessary to ensure long-term success:
Process improvement
- Measure the error rate by comparing the number of errors before and after the ERP implementation.
- Check the throughput times of processes and compare the processing times with the initial situation.
- Analyze the degree of automation by determining the proportion of automated and manual processes.
Financial criteria
- Check the cost savings in different areas of the company.
- Calculate the return on investment (ROI), i.e. the percentage ratio of project costs to the profit you have achieved through the ERP implementation.
- Determine whether your company can record an increase in turnover thanks to the ERP system.
System utilization
- Find out how high the user acceptance rate is – the proportion of employees who actively use the ERP system.
- Determine how many users have already received training.
- Get additional feedback from users. Ask them about application problems and suggestions for improvement.
- Check the system availability by comparing the operating times with the planned availabilities.
Customer satisfaction
- Check on-time delivery by comparing the number of orders delivered on time with the number of late deliveries.
- Compare the current response times with the previous ones.
- Keep an eye on the complaint rate and check whether your customers’ complaints have increased or decreased after the ERP implementation.
Proven tools and methods for measuring success
Now you know which KPIs give you objective information about the efficiency of your ERP project. The only remaining question is which applications you can use to measure success. The following software tools and methods have proven their worth:
- ERP-internal reporting tools and dashboards allow real-time monitoring of relevant key figures. They visualize progress, identify bottlenecks and enable data-based action. With the help of automated reports, you can identify deviations at an early stage and take targeted optimization measures.
- User surveys and workshops provide you with valuable feedback on the practical functionality of an ERP system. The direct exchange with users helps you to identify problems, recognize training needs and make the system as user-friendly as possible.
- Transparent communication between stakeholders and the project team takes place at regular review meetings. In this way, progress, challenges and deviations from targets are recognized in good time.
- Audits check the ROI and process quality of an ERP project using objective criteria. They bring weaknesses to light before they become a real threat to the success of the project and provide helpful information on opportunities for improvement.
Conclusion: Objectives and KPIs go hand in hand
Measuring success is an important part of the ERP project. It not only provides information about the efficiency of the new solution, but also provides important insights into optimization opportunities. With the right KPIs, you can objectively evaluate progress, identify deviations at an early stage and make data-based decisions.
However, the basic prerequisite for targeted performance measurement is careful planning prior to ERP implementation. This includes both a clearly documented database and a precise target definition. Be clear about where you currently stand, where exactly you want to go and how an
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