How to Turn Your ERP Application Into a Strategic Decision Engine

ERP applications are designed to be game-changers. But what if it feels like just another business software? 

Many firms struggle to get the most out of their ERP. Here, we'll help you identify the common bottlenecks that hinder ERP effectiveness and develop practical solutions to make yours a strategic powerhouse.

toc-blogpost

Why your ERP application might not be reaching its full potential

Despite a successful ERP implementation, many businesses struggle to realise its true potential due to various factors. Let's delve into the most common reasons below:

1. Underutilised reporting tools

A modern ERP application is designed to have powerful reporting and analytics features. However, it’s difficult for many businesses to take the most out of these built-in tools. This could be due to not being aware of available capabilities, insufficient training for users, or the misconception that reports are just for specific departments like finance.

• Unawareness: Some users are unaware of reporting features in their ERP. Therefore, they only rely on outdated methods or spreadsheets for data analysis
• Complexity: ERP reporting solutions may have complicated interfaces. Without proper instruction, your users can find them hard to utilise.

2. User adoption challenges & resistance to change

A new ERP application may greatly impact your existing business workflows. Users who are familiar with their current routines may reject this change. Common barriers to user adoption might include:

• Fear of the unknown: Learning to adapt to a new system can be overwhelming as people are unconsciously hesitant to change. Users might be concerned or skip the amount of time required to get used to the new system and apply it to their workflows
• Inadequate training: Poorly designed training programs may contribute to poor user adoption. Well-prepare trainings need to go beyond basic functionality and empower users to utilise the ERP application to its full potential
• Lack of user buy-in: If companies are unable to clearly explain the advantages of the new ERP system, users can be indifferent or uncertain about it. Therefore, to encourage user buy-in, it is important to deliver effective communication that highlights the value proposition of the ERP.

3. Lack of ongoing optimisation

Successfully implementing an ERP system is not only ‘setting it up’. Business needs and industry trends change over time. Therefore, ongoing optimisation of your ERP application is vital to maintain the best performance.

• Outdated features: Inevitably, the ERP vendors continuously introduce newer versions and updates with better features, bug fixes, and security. Businesses that fail to catch up with these updates can only utilise an outdated system, missing out on the benefits or potential security vulnerabilities
• Ineffective workflows: As your business grows, the workflows may change accordingly. Without ongoing optimisation, the initial ERP configuration may become ineffective with less productivity and data accuracy
• Missed opportunities: The ERP system contains a large amount of data. Ongoing optimisation allows your business to access new growth possibilities and areas for improvement.

4. Insufficient change management strategy

An effective change management plan is key to a successful ERP implementation. The plan makes sure that your operation enters a smooth transition from the old system to the new one with the least disruption. Without an efficient strategy, your business may encounter:

• Limited understanding: Users may not completely understand the ERP features or how they affect their roles due to a lack of communication. This may result in dissatisfaction, errors, and unproductivity
• Resistance to adoption: A lack of communication may also worsen user resistance to the new ERP. Your teams might be hesitant to embrace the change or return to their old practices as they are not confident in using the new system effectively
• Data inconsistency: Inconsistent data can exist between the old and new systems due to poorly managed migrations. This results in data inaccuracy and difficulties in generating reliable insights for businesses.

Read more: Selecting an E-commerce ERP Everything You Need to Know First

Advanced features you might be missing

Your ERP application is most likely full of features that have yet to be explored. Beyond the core features like accounting and inventory control, many businesses ignore the additional capabilities that lie untapped within their ERP. Those untapped areas may improve efficiency and greater agility:

1. Automating manual tasks

Your organisation may be unaware of the ERP application's automation capabilities. Especially, building workflows and approval processes may require technical knowledge which keeps some businesses from utilising the hidden potential. Keep in mind that most ERPs are developed to automate manual and time-consuming tasks to free up time for your employees.

2. Integrating with third-party applications

Your teams may overlook the benefits of integrating third-party applications. Modern ERP systems are developed to operate seamlessly with a variety of third-party apps. Those apps can be integrated with your ERP, i.e. integrating ERP and CRM, marketing automation and e-commerce platforms, etc. Unfortunately, many businesses skip these opportunities due to security concerns or complex integration processes and remain aware of professional services that could help.

3. Utilising mobile apps for on-the-go access

A lot of users don’t know that ERP’s mobile apps exist. Modern ERP vendors develop mobile applications that allow users to access data in real time. This enables your employees to stay active and efficient even while on the move. However, some businesses limit the mobile usage of ERP due to employee data security concerns on mobile devices. 

4. Other advanced management features

Besides the previous mentions, your ERP application may include several robust features tailored to different departments or business functions:

• Machine learning (ML) & artificial intelligence (AI): ML & AI are tools that help businesses extract deeper insights from data, find trends and discover hidden patterns
• Business intelligence (BI): BI tools are technologies used to conduct comprehensive data analysis and create interactive dashboards for data visualisation
• Regulatory compliance management: Some ERPs provide features with compliance software to help firms stay up-to-date on industry regulations and reporting needs (i.e. Odoo Accounting Localisation). They are incredibly beneficial and convenient if you’re in highly regulated industries like healthcare or finance.
• Maybe you’re interested: Odoo ChatGPT Integration - 9 Best Practices For Effortless Workflows.

See Also: Top 5 ERP Software For Small Businesses In Australia

Optimising user adoption & change management

Despite the values that ERPs offer for businesses, the implementation involves carefulness in resource planning and takes months of development and adoption. However, just about 26% of employees say they use their company's ERP, and 51% of businesses suffer operational delays when they launch an ERP system. Consequently, employees might easily go with normal initiatives rather than adapting to the new ERP application. This is how user adoption and successful change management come into effect.

1. Tailor user training programs based on roles & responsibilities

When it comes to ERP solutions, a one-size-fits-all training strategy is not going to work. Users with different roles have different needs and responsibilities, and here are some tips for developing excellent training programmes:

• Role-specific lessons: Create training programmes that are demand-specific to each user role. Finance workers, for instance, will need extensive training in accounts payable and receivable functions. Sales reps may need to focus on CRM features within the ERP
• Focus on practical applications: Consider focusing on practical applications instead of overwhelming users with technical information. Using hands-on exercises to train them on how to use the ERP application to complete their everyday tasks more efficiently
• Post-training support: Do not neglect users once they have completed the initial training. Instead, you can offer ongoing support resources such as manuals, knowledge documents, or discussion groups to help them troubleshoot any difficulties during daily use.

2. Encourage user feedback and continuous improvement initiatives

Switching to a new system requires cautiousness. Cultivating a culture that values feedback from users and continuous enhancement is important for long-term success. Here are some tips:

• Open communication channels: Create open communication channels throughout every implementation phase. This enables teams to express their issues, ask questions, and give comments
• Feedback mechanisms: Create several channels for user input like surveys or focus groups to get feedback and discover areas for improvement. You can regularly collect input on not only the effectiveness of the initial training but also the user experience and system functionality
• Addressing feedback proactively: Do not let user input go to waste. Evaluate the collected input and prioritise resolving typical issues or difficulties with usability. Share with users about how their input is being handled and build a sense of ownership and continuous improvement.

3. Build a data-driven culture for better decision-making

Modern ERP applications are data-driven. Businesses that use data analytics can acquire important insights into user behaviour and potential adoption bottlenecks. This data can also help to inform continuous improvement projects and maximise overall system efficacy.

• Usage analytics: You can monitor user activity inside the ERP system to explore underutilised features or areas where users may struggle. Usage analytics can uncover patterns in user behaviour and highlight functionalities that need more attention
• Identifying training gaps: It’s advisable to analyse usage statistics and identify areas where users need support to improve performance. This data-driven method guarantees that training resources are meeting actual user demands
• Data-based decision-making: You may use usage statistics to fuel future decisions on system capabilities, customisations, and integrations. This allows your business to ensure ongoing system optimisation and enhance the ROI.

The future of ERP applications - Emerging technological trends

ERP applications form the foundation of many businesses. However, many of them fail to realise the full potential of their ERPs and ignore cutting-edge technologies. This results in missed growth opportunities due to limitations in scalability or user experience. Here are some of the latest technologies that you can consider to improve your ERP and get a competitive advantage:

• Cloud Computing: As numerous reports have noted, cloud-based ERPs continue to be growing in popularity. They provide scalability, remote access, and lower IT infrastructure expenses. These advantages make them particularly beneficial to companies of all sizes.
• Artificial Intelligence (AI) and Machine Learning (ML): AI and ML are quickly reshaping industries including ERPs. These innovations can automate laborious jobs, forecast demand shifts, reveal potential data threats, and simplify processes via real-time analytics. AI-powered chatbots, for example, can respond to user queries inside the ERP system, freeing IT support workers from their workload.

• Digital Twin Technology: This technology creates virtual versions of physical assets or procedures. Businesses that integrate digital twins with ERP systems can receive real-time data on equipment performance, estimate maintenance requirements, and optimise production plans. The method has high potential for use across industries such as manufacturing and supply chains
• Augmented Reality (AR) and Virtual Reality (VR): AR and VR technologies are gaining more new users in the ERP era. AR overlays may offer technicians detailed instructions for intricate repairs as they observe the actual equipment, increasing efficiency while decreasing errors. VR simulations may be utilised to train employees on ERP features or to create virtual showrooms that showcase products to customers
• Blockchain: While it is still in the early ERP stage, blockchain has the potential to considerably boost data security and integrity. Its distributed ledger technology can be used to safely record inventory movements, handle supplier contracts, and confirm the validity of product components. This is especially true in industries with strict compliance standards.

Key takeaways

Your ERP application is a great tool, but it is only that: a tool. Tapping into its full potential takes consistent investment in training users, system optimisation, and exploring new features. By adopting the principles described above, you can change your ERP from a data silo to a strategic decision engine that fosters productivity, empowers personnel, and propels your organisation ahead.

Remember that an effective ERP is more than simply software; it is a strategic investment in your company's growth. As a qualified ERP partner, we are proud of our ability to thoroughly understand your requirements and work with you to establish a successful implementation strategy.

References:

• Third Stage Consulting Group (2020). 2020 ERP and HCM Report.
• Softwarepath (2022). What 1,384 ERP projects tell us about selecting ERP (2022 ERP report).