What are the lessons learnt from ERP Performance Studies?

ERP performance studies is undertaken by organizations to know the effectiveness or benefit of ERP. 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 the tendency to perform this process in a professional manner so that it would yield the 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 Crux of ERP Performance Measurement

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 investing 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 and corrected. After going all the way and that too in the right manner, companies don't bother to review the working pattern of ERP. Unless they understand this it is not possible to achieve the benefit of ERP.

Errors Capable of Undermining the Process

Companies wrongly mistake that the proper implementation of ERP is a guarantee to its success whereas it is not so. Proper implementation facilitates efficient performance subject to the fulfillment of imposed conditions. This is the major flaw that underplays the performance of ERP. The validity of any process has to be constantly monitored and amended if necessary, so as to ensure proper discharge of the assigned functions. Since this does not take place in the case of ERP due to the popular myth Erg's performance measure is neglected. ERP evaluation aims to correct all the mistakes in addition to this.

What are the Reasons beyond those mistakes?

There are a couple of other reasons associated with this myth .One issue is the lackadaisical attitude shown by the top managerial cadre in the organization with regards to implementing ERP. The organizational politics also have a vital role in this problem. Some Questions that will be raised in this context will be:

Who is to bell the cat?
Who takes the blame on account of failure?
Who takes credit for success?

Due to these inhibitions lot of controversies arise. This also accounts for the failure to measure ERP. There might also be endless arguments among personnel in the organization which might disrupt the performance process.

Some Parameters for Measuring ERP Performance

There are some criteria involved in measuring the performance of ERP. Before going into the specifications it is imperative to know the basis on which performance measurement is to be made. There are innumerable means of evaluating ERP performance. Each of them has their own advantages and disadvantages. There is no hard and fast rule as far as the appropriate method to be used is concerned. However the organizations must deicide and stick on to one particular method which must be put in use uniformly. It is usually recommended to execute it in the midway of ERP implementation. The next appraisal shall take place when the process is nearing completion .After ERP begins to Operate the assessment shall take place within the time gap of 3, 6 and 12 months. They must be done on the basis of some set criteria .If these steps are not followed then the likelihood of ERP's success is limited. The frequency of assessment depends on many factors like the volume of business, ability to adapt to change and the characteristics features of the software that is in use. The performance assessment will not serve the purpose if these determinants are not taken into account. Besides any other measure deemed to result in the benefit of ERP, should be accounted for.

Organizational chart Depicting the hierarchy and Properties

The Fundamental step in the evaluation process is to draw up an organizational chart. The chart will help in identifying "What is What and Who is Who" in the organization. The aim behind drawing this chart is to give a picturesque representation of the company. This representation will explain the organizational structure of the company in terms of materials and manpower. This chart will serve as a guideline with respect to seeing how things are moving about in the organization. It also helps to analyze the mistakes committed in due course of time. This forms the crux of ERP performance evaluation.

Suitability in relation to Business Mode

The performance assessment should not be a general process. It should be designed specially to suit the particular business that the firm engages in. Only then it will cater to the measurements properly, Otherwise the assessment will be indifferent to the firm's modality of operation. ERP evaluation should use this as a guideline or framework to get results.

Accurate Quantification to facilitate correct measure

The performance should be measured in terms of numeric variables. Only then the results can be easily comprehended and become fit for analysis. These variables have to be meaningful and realistic so that it serves the purpose. They should be capable of being marked by a scale of ratings. Only then it is possible to comment on what has been achieved figuratively and, things lag behind. There is a reason behind advocating this. Any study becomes authentic only when it is empirically supported by facts and figures. Hence the assessment process will become valid and useful only if it is supported by such statements. If the firm follows the trends and standards with the industry it will be helpful for studying the results and comparing the same with the competitors. This will help in adding the benefit of ERP.

Account from all Relevant Sources

The records have to collected from reliable sources. It is better to trust the state's machinery or approach the relevant trade union or cartel for this purpose. These records will help in devising a measure for the performance appraisal system. If a customary measure is arrived it will be helpful in finding out the extent of ERP'S efficiency .It will be possible to suggest alternatives to increase the efficiency and provide ways and means to overcome the deficiency. ERP evaluation should play a constructive role in this

Perform Frequent Reviews during operation

The modalities of measuring ERP in the post implementation areas have been so far discussed. The real challenge lies in measuring ERP once it starts functioning in the organization. This requires things to be handled methodically since the results are detrimental on ERP process. The method should focus more on calculating what the firm gains from ERP in connection with the money investment. The assessment should focus on the following issues:

How has it contributed to perform vital function in an easy and convincing manner, which was otherwise and formally regarded as very tough?
What is their level of comfort and state of expertise in making use of ERP software?
How has it facilitated in correspondence within the organization?

Some experts also advocate the use of statistical tools to gather this information because it becomes practically difficult to obtain them at one stroke.

Solve Employee Problems and clear their mindsets

The preconceived thought in the midst of the workers is another setback to the process of performance evaluation. Employers often mistake that this process is meant to judge their efficiency in dealing with the software. They often tend to blow up issues beyond proportion in a positive manner or negative manner inorder to stay in the goodbooks of the employer. They don't understand the fact that this process is meant to test the efficiency of the software and more so aimed at increasing their comfort level with the software. Unless this is communicated clearly the employers will continue to give a rosy picture about the workings of the software. This will neither help to identify the defects of the software nor help in tackling the employees problems with the software.

Classifying measurement areas

As stated earlier the measurement has to be constant in all areas. However the voracity might differ in practice between one or more areas.Infact the assessment process takes place quickly and with in some areas whereas it tends to be tedious in certain other areas. Whatever be the case companies need to constantly modify business process so that it becomes ERP friendly. Morovever the inherent flaws in the business process should be identified and removed because ERP'S function will not be effective unless they are curbed and ERP is not meant to restructure or modify the business process.

Protecting Privacy and Intellectual Property Rights

One important element of measuring performance is upgrading the security systems so that the transparency does not lead to disturbing privacy of the systems. The performance systems should always have a vigilant eye on this aspect and advocate the scopes for improving the same. Some accountability also can be vested to the employees so that they ensure safety by all means. The methods adopted for evaluation should also be safeguarded and kept exclusively for the company's use.

Pitfalls in Deficient Training

The process of performance appraisal might sometimes reflect defects in training. The defects could be in the form of inadequate training or the failure on the part of employees to grasp the necessary impetus during training or it could be the indifferent attitude management.

Ensuring safety measures for ERP

Safety is another issue that has to be looked for when it comes to ERP. Some of the reasons which cause concern are the fluctuation in trade, accidents changes in demand and calamities caused by the environment. The performance appraisal in the organization should cater to these issues inorder to avail the benefit of ERP.

Conclusion

It should provide for techniques that help in keeping away from the calamities and thereby giving the necessary competitive edge. Whenever some discrepancy is identified during the process of performance appraisal care has to be taken to draft necessary preventive measures. If all these measures are implemented successfully then the ERP performance studies will definitely deliver the results.

What are the steps to be taken to account the performance ERP software programs in your organization?
Getting to know BPR
What are the reasons for ERP failure? How to avoid them?
Choosing ERP Software
Customizing ERP Software
How to set ERP Standards?
Factors influencing ERP price
What is the Necessity for ERP Gap Analysis and how is it done?
ERP Implementation Guideline
ERP Implementation Life Cycle
Challenges faced by ERP
Flaws in ERP training
How to overcome ERP troubles?
Significance of ERP Implementation
How to make ERP User friendly?
What are the different methods in implementing ERP?
Constituents of ERP Training
Errors in ERP implementation
Process Management

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