An annual employee performance evaluation is vitally important when implementing an enterprise resource planning (ERP) system. Many businesses assume that installing such an ERP solution will result in immediate improvements due to its relatively minimal implementation efforts, in terms of both time and costs involved in its deployment. However, an annual employee evaluation must still take place for optimal ERP results.
However, if an ERP has become "legacy," meaning out-of-date or hasn't been upgraded since its introduction, then its performance needs to be evaluated thoroughly. Have employees stopped using the system regularly or are they performing tasks manually that should have been automated by it?
For businesses to determine if an ERP can meet its business needs or whether a different one would better serve the enterprise, it is necessary to evaluate how effectively its current operation. Finding answers requires studying business processes.
An ERP performance analysis should primarily ask two key questions:
- Is now the right time to upgrade their ERP?
- Could they be missing out on other advantages by staying where they are?
Three Key Steps For An ERP Performance Review
When assessing whether an ERP is operating at peak efficiency or requires updating, three main points should be kept in mind. An ERP selection project is an undertaking of considerable magnitude; its potential costs and risks should be carefully considered prior to embarking upon this venture.
Review Current ERP's Worth
An objective appraisal of current ERP worth should serve as the starting point when conducting an ERP performance review process. Determine whether it has provided what was promised; whether its performance remains as promising on Day.
Consider the following five valuable domains:
- Does the ERP still support all features and functions of my business as it currently stands?
- How well is the ERP integrated with external apps, systems, clients, and vendors?
- What is the state of end-user technology?
- Look and Feel: Does It Appear Natural?
- Wfomflow: Does It Align With What We're Currently Doing WFomflow.
- Has Complete Windows Integration
- Does it provide the business with business intelligence and real-time information, along with essentials such as dashboards, scorecards, cubes of data and reports for dissemination?
- Culture: Does the ERP align with current business practices of your company?
Assess Risks
Risk is usually only discussed after an unexpected occurrence has been suffered, yet it's essential that regular assessments be made of vulnerabilities which threaten system integrity. Consider some questions related to risks such as these when looking into your company:
- How well is the hardware/software performing daily and in terms of integrity, has it received regular updates, and do all modules function as intended?
- Does the vendor offer system support in accordance with original agreements, at an agreed upon price point?
- What security level does the ERP offer? With increasing cybercrime incidents daily, is this system secure?
- Is support and maintenance for this ERP too difficult for the IT team to handle?
- How well has the system adhered to applicable government regulations, industry standards and compliance issues?
Assess Business Procedures
To get the ball rolling on any process improvement initiative, business process analysis is the cornerstone. Unfortunately, many businesses neglect or refuse to complete this critical step of their organization's transformation efforts, which entails an evaluation of company parts that need changing in order to become more cost-efficient and productive. An analysis such as this establishes a framework and pinpoints data necessary for creating improved processes - evaluate current operations, implement changes as necessary and present an impressive business case for any ERP decision you might make!
Overview Of ERP And Performance Management
Implementing ERP can help enhance your performance management process and facilitate its success.
Helps Provide Reliable Statistics Through Data
Combine essential ERP modules with third-party connectors for optimal business insights. Discover daily activities, attendance records, performance against KPIs and much more with ease!
Businesses could make better use of all available information to enhance their systems for all stakeholders by making data-backed decisions based on verifiable facts. Not to mention, success depends on having both the ERP system and performance management process aligned to each other.
Better Interdepartmental Data Sharing: Facilitate Interdepartmental Sharing Of Information
Transparency and trust are cornerstones of any successful company. Without them, any relationship would dissolve instantly; similarly a business partnership must engender mutual trust among employees and employers in equal measures.
Furthermore, automating performance management techniques enables businesses to provide departments, staff and management access to up-to-date and accurate information from one single source. Users are then able to retrieve all the pertinent data at any given moment in time.
Silos can be found across an organizational structure among all of its departments that are active within it, leading to data inaccuracy due to impediments to information flow and communication, leading to reduced production in turn. This situation should not be tolerated.
Your management can plan every action and assign appropriate staff to improve all functions - accounting, inventory control, order processing, and planning--thanks to an ERP system.
Provide Real-Time Feedback
HR staff may install an ERP-integrated performance management system, providing real-time feedback. All relevant parties will automatically receive alerts from this function.
Key Performance Indicators (KPIs)
Employee KPIs (key performance indicators) are objectives devised collaboratively between employees and leaders to measure whether strategic goals have been properly communicated to employees. Measurable goals should be developed so as to assess how their effects influence company plans.
Quality KPIs include steps taken to address customer concerns, reduce returned material amounts, shorten lead times, adhere to various legal requirements and more.
Also Read: Mastering Performance Management: A Comprehensive Guide to Boosting Employee Success
Benefits Of An ERP System Review Process
An ERP system evaluation can be seen as the equivalent of physical examination for systems. Just like our bodies age and experience pain, so too must ERP systems undergo examination in order to stay healthy. A medical examination is always appropriate when there is something preventing their normal operation and functioning; for such problems an examination would likely be the appropriate course of action.
Over time, enterprise resource planning (ERP) systems begin to show their age. Senior managers notice that when extracting ERP data for key decisions they no longer operate at peak efficiency; previously seamless processes start slowing down resulting in reduced productivity.
If the issue is not addressed immediately, your ERP system could become disruptive enough to cause unexpected business disruptions that have an adverse impact on revenue.
Don't wait until it is too late - when data directors detect a decline in quality and communication is compromised, the only effective solution may be ordering an impartial ERP system review health check to address it.
These are the top 5 benefits of an ERP system assessment and health check for your company.
Be Mindful Of The Condition Of The System
An ERP systems evaluation offers many advantages for companies of all kinds. A thorough assessment can give an overall picture of how well your ERP is serving you and your company.
Your company must continue operating at peak capacity due to its operating procedures; there may be room for improvement here; how accurate are reports, and reliable is data?
Businesses can identify areas for improvement by offering answers to all of these queries and more. Senior managers also have an opportunity to identify incompatible operations and draw attention to flaws within the system.
Understand Your Mature Level
The three ERP system usage maturity phases are clearly laid out here. At stage one, an ERP project begins; post-implementation involves fully exploiting its potential. Finally, at stage three comes full utilization by an organization as a whole of all capabilities made available through ERP implementation.
Integration of an ERP system into routine business processes marks the third stage, enabling consistent harvesting of its strategic value from its application.
Experts can assess your ERP system's performance relative to market standards by calculating its maturity level, informing all staff members about its optimal performance levels with respect to integrated software, auxiliary applications and the entire system as a whole.
Reduce Downtime Caused By Ineffective ERP Performance
ERP health checks are highly valued by department leaders as they offer valuable insights into existing business operations and how best to incorporate these into an ERP. Simply put, those within an organization who manage resources and extract data from an ERP work collaboratively together in improving its overall performance.
CEOs and data directors cannot afford to waste their valuable time when technical issues arise. Their time is expensive so it is crucial that topline statistics be delivered as soon as possible so as not to lose steam within your firm. An ERP system health check enables organizations to get immediate assistance for performance problems while minimizing downtime.
By conducting an ERP system review, companies can enhance their business in concrete ways by giving decision makers a voice and increasing job satisfaction among those who regularly use the system. Additionally, this ensures that executive level topline data handlers don't wait when they should be taking action on key priorities.
Double-Check The Accuracy Of Your Data
Enhancing data integrity through an ERP health check increases reporting speed and accuracy. A typical check will involve reviewing transactional files and master setup files, giving data managers the chance to envision creating a "clean" functional system.
Based on your resource management budget, ERP experts can suggest future steps for your company by considering all of your input.
Select Your Plan Of Action
An ERP system check aims to facilitate decision-making regarding future actions. Three general results may be observed:
- Do nothing and leave the system alone;
- Enhance it by purchasing add-ons or an updated version.
- Replace Your System.
Even when the current ERP system is working efficiently, an ERP health assessment can still prove valuable in providing short fixes that have significant long-term impacts on corporate processes as its deployment matures - often offsetting its expense through immediate financial savings.
How Does ERP Enhance Your Performance Management?
An ERP-integrated performance management system features a comprehensive module designed to meet the personnel management needs of clients. Data collected and shared among third-party operations, ERP integration, and human capital management is shared within this performance management system.
Purpose of ERP-integrated performance management systems is to promote cooperation, communication and clarity between all parties involved regardless of their positions within an organizational hierarchy. Furthermore, ERP-integrated performance management systems offer additional capabilities which help increase productivity:
- Communicate and articulate company goals so they align with KPIs (key performance indicators) of its workforce.
- Provide customisable review forms, workflows, approvals and inspection methods.
- To increase transparency and decision-making within your company, provide 360-degree review input.
- Gather project-based evaluations in order to optimize productivity and streamline existing processes.
- Track any education, training and certification program supported by an automated renewal procedure.
- Confirm that the employee portal makes performance management straightforward for access.
- Support all employees in tracking their progress towards both short- and long-term goals by offering goal progress tracking forms.
- Grant employees access to one-click evaluations so that performance management processes can run more efficiently.
How Should The Performance Of An ERP Project Be Evaluated?
ERP experts must first select which parameters and metrics they wish to assess when evaluating the success of ERP initiatives, such as impact, quality, efficiency, effectiveness or satisfaction. Once specified, using appropriate tools and techniques they should gather and examine the data reflecting that success. ERP specialists then need to interact with stakeholders and discuss findings after deciphering performance review results to gain feedback and discuss future stages while emphasizing accomplishments, difficulties encountered and lessons learned.
Which Are The Best Methods For Assessing Performance?
ERP experts who adhere to certain best practices may find performance evaluation more fruitful for themselves and their teams alike. ERP specialists must make certain their performance review aligns with both the objectives and strategy of their project as well as with the demands and expectations of stakeholders. Engaging stakeholders and team members in the process by soliciting their opinions, soliciting suggestions from them, recognizing their accomplishments and contributions is also of key importance.
To properly account for all dimensions and perspectives, qualitative and quantitative tools such as surveys, reviews, metrics, and feedback must be utilized. Additionally, regular performance reviews must take place to monitor progress made towards goals while simultaneously detecting any problems or deficiencies immediately.
Conclusion
ERP solutions can be instrumental in realizing these advantages. A business process assessment is an invaluable way of discovering areas for improvement within an organization's operations, with increased productivity, better decisions made and competitive edge gained using ERP software as the result.
