Five KPIs of a Successful ERP Implementation

Modern ERP systems greatly simplify and streamline key business processes and provide enterprises with exceptional insight into their operations. But how can you tell if your ERP implementation project is a success? In this article, we explore five essential KPIs that you can use to measure ERP success.

When done properly, an ERP implementation is a great way of improving your business. Modern ERP systems greatly simplify and streamline key processes and provide enterprises with exceptional insight into their operations, meaning they can improve everything from your supply chain to the quality of your customer service. But how can you tell if your ERP project is a success? Integrating a new system into your business can be complex so it’s important to ensure you are reaping the benefits. Key performance indicators (KPIs) can demonstrate how your business is succeeding in a quantifiable way, therefore making it easy to see how your ERP implementation has made a difference.

In this blog, we explain some of the KPIs that can indicate a successful ERP implementation.

Why Are KPIs Important?

Businesses across all industries can benefit from ERP solutions but you need to see the results of your investment. KPIs use your business data to present quantifiable results and effectively track how well your ERP project is performing, such as profit growth, increased productivity and more.

To see how your new system has improved your operations, you should set goals at the beginning of your implementation project and track these KPIs and metrics going forward. ERP can completely transform your business and with clear KPIs in place, you can see how and where your ERP implementation has done its job.

Top Five KPIs of Enterprise Resource Planning

So now you know why KPIs are important when it comes to ERP, it’s time to discuss which KPIs you should focus on. Everyone’s KPIs will vary depending on the sector and general goals for the business. However, there are some essential KPIs that you can use to measure ERP success:

1. Revenue Growth

Revenue growth is the aim of every enterprise and analysing revenue growth is a great way to measure whether your newly implemented ERP system is helping your business. There are three main things to look out for – reduced costs, increased sales and better collaboration between teams.

Have you been able to save money while experiencing an increase in sales? ERP solutions will automate and optimise your business processes and reduce the amount of spending across your business through efficiency improvements. Furthermore, with the improved budget control, financial reporting and analytics that ERP systems offer, analysing the revenue of your business will demonstrate the efficiency of your ERP implementation. The revenue growth metric is important because it indicates the health of a business’s sales and how well you are doing at selling your products and services. An ERP implementation can help you increase revenue through efficiency improvements, so monitoring this KPI is key.

2. Accurate Forecasting

One of the main reasons why businesses invest in ERP is to make better decisions. When you have several different programmes and systems in place, important data and issues can get overlooked but with everything in one place, every inch of your business is transparent. An ERP system, such as Microsoft Dynamics 365 for Finance & Operations (D365FO), will integrate all areas of your business, so they work together, and ensure data consistency across various departments. This in turn will help you obtain useful insights that enable measurably better forecasting and, therefore, improved decision-making.

So, has your ability to make informed decisions improved? Forecasting more accurately is a vital KPI that should be measured and tracked and can lead to better decision making across the length and breadth of your business.

3. Increased Productivity

Productivity is one benefit that Microsoft Dynamics 365 is not short of! Slow productivity can be a real problem for all kinds of businesses but in many cases, an ERP implementation can resolve this issue – this is a common KPI for those tracking ERP success. Low productivity is the result of inefficient processes, an unclear vision and inaccurate forecasting. However, with Microsoft Dynamics 365FO you can make positive changes to your processes and your employees as a key decision-maker.

ERP merges information from all departments into one user-friendly system so you can identify clear relationships across the board and have the information to hand in real-time with no waiting for these insights. You may also notice that your team members are working more efficiently in many ways. For example, orders are being shipped faster and customer queries are being handled at a quicker rate.

4. Improved Customer Experience

The ERP applications that are part of Microsoft Dynamics 365 can also improve the experience of your customers. By optimising your supply chain, you can ensure that stocking information is accurate, delivery timescales are improved and levels of stock remain consistent. This ensures that your customers can source the products and quantities they need at all times; therefore, improving the customer experience.

As well as using Microsoft Dynamics 365’s ERP solutions for enhancing your customers’ experience, you can also utilise other Microsoft Dynamics 365 business applications to directly improve customer service processes.

For example, Dynamics 365 Customer Service allows you to see a clear timeline of your client’s interactions with you, meaning resolutions can be found quicker, omnichannel support means you can communicate in a way that suits your customer such as voice call or messenger and you can access quantifiable data such as how many outstanding cases you have and your average handle time.

How has the customer experience improved since completing your ERP project? KPIs to look out for may include positive feedback from customers to your customer service team, faster delivery times, more consistent levels of stock, faster response times or even fewer customer service queries. Having an overall insight into your customer experience means you can spot issues before they escalate.

5. Reduced Downtime

Keeping track of any business downtime, and reducing this where possible, is vital for your company. It’s normal for businesses to experience peaks and troughs but if you’re continually having very slow periods, this needs to change – that’s where ERP can help.

Once your ERP is up and running, you may notice over the following weeks and months that you have better insight into the cause of your downtime. For example, D365FO can provide details of your production performance and make it easy to identify poorly performing areas and what can be done to move forward.

As a KPI, tracking changes in your downtime can be a great indicator of ERP success and overall improvements of your business. By eliminating the things that are slowing you down you will continue to grow and thrive in your industry.


Reach New Levels of Success With Enterprise Resource Planning From ICS

At ICS, we’ve helped businesses across all industries find success through Microsoft Dynamics 365 ERP solutions. With our comprehensive range of consulting and development services, our team will discover what’s best for your business so your operations are as productive and profitable as possible.

If you’re struggling with inefficient processes and a lack of visibility into your business, Microsoft Dynamics 365 could be the key to your success. As Microsoft Gold Partners, we understand ERP like the back of our hands and are proud to be the top choice for D365FO implementation services. Contact the team at ICS today to learn more about implementing Dynamics 365 solutions for your business.