ERP systems sit at the core of modern manufacturing—but most companies use only a fraction of their capability. In this Supply Chain Byte, Lisa Anderson gives examples of how optimizing the ERP system can strengthen the supply chain—capacity, staffing, planning & scheduling and on-time delivery.

In ERP circles, a widely touted statistic is that companies typically only utilize 20% of their ERP system. To be competitive, ERP systems must continuously build out their systems with additional functionality. For example, company x might require a certain functionality while company y requires a different capability and company z requires yet another version. Thus, modern, mid and large-tier ERP companies (supporting mid and large customers) build all three capabilities into their ERP software to support their customers’ needs.

Although company y doesn’t require company x’s functionality, it might provide additional value / benefit if utilized in conjunction with their base functionality. Or they might utilize the additional capability to fill a different need. In addition to supporting different customer needs, they must build their software for advanced customers. Most customers won’t utilize the advanced functionality; however, it leaves them with vast opportunity to better utilize their ERP system, upgrade their processes, and deliver enhanced customer value and bottom-line results as they can dedicate time and resources to the project. 

In the modern era, ERP suppliers must also incorporate artificial intelligence and advanced technologies, simply to keep up with changing conditions and remain competitive. Rolling out ERP functionality and upgrading the use of ERP with advanced technologies requires ERP experts, process experts, and is project intensive with a heavy dose of thinking about down-the-line impacts to be successful. Unfortunately, the other common ERP statistic is that 80% of ERP upgrades fail to achieve the intended results. Thus, if you aren’t going to set it up for success with the appropriate resources and focus, it is better to not do it. Otherwise, you risk negative consequences with customers and profitability. Thus, only utilizing a fraction of the available functionality is not uncommon.

In our client base, 98% of the time, clients can gain significant bottom line results by better utilizing and/or optimizing the use of ERP and related technologies. The key to success is to prioritize the projects that will best fit your business needs and support your objectives. Take a few strategic steps forward, bring in the appropriate experts/ support, engage your team, pilot new functionality, and stack the deck in your favor with solid execution. To learn more, read our article “Modernize Your ERP System: A Guide to Selection and Implementation Success“.

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Better Utilizing ERP for Sustainable Results