• How to measure the success of software implementation

Implementing accounting inventory software (also known as ERP) is an exciting opportunity for your company to grow sales, expand into new markets, automate processes, reduce manual work and ultimately increase your bottom line. But how do you measure the success of implementing a new system? It can be especially hard to quantify ROI when dealing with intangible benefits. However, by properly documenting processes before making the switch and by taking the time to speak with employees, you can easily measure the success of the project. The ability to share data with employees, management and the company owners that supports the implementation of new accounting inventory software will not only encourage employees to put in the time and effort to adopt the new system and associated process changes but will also allow the company to redirect resources to other aspects of the business for future growth, projects and improvements. Not to mention that showing positive ROI is sure to earn you brownie points with the boss.

Creating Benchmarks

Before you engage with potential software vendors, it is always best practise to put together a list of existing processes, your unique business requirements and existing feature requirements, potential opportunities for improvement and company growth and your plan for evaluating software vendors and making a final decision. As you begin to document existing processes, try to quantify the data wherever possible and consider the following:

  • How long does it take to create an order in the system? How many people are currently responsible for this job?
  • How many times a day/week/month do you have to deal with order errors?
  • Are you entering the same information into multiple systems? How long does this take? How many people are doing this?
  • Are you, or any of your staff, manually entering data from your existing system or other sources into spreadsheets on a regular basis?
  • How long does it take to pick an order? How many people do this?
  • How often do customers return product? What are the main reasons for these returns?

Compiling stats around the above questions will provide a benchmark for comparing data once you have a new accounting inventory system in place. At a minimum, it is important to try and track metrics around time spent, monetary costs, employee satisfaction, customer satisfaction and number of errors.  Trying to be as specific as possible, record information on the time it takes to complete any given task such as generating a report, creating a sales order, picking an order and receiving inventory, the number of employees required to perform any particular task, the number of errors associated with manually entering data and the frequency of picking errors in the warehouse.

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Measuring Success

Once you have a set of benchmarks against which to compare data, it is easier to measure the success of the project. However, it’s important to keep in mind that you likely won’t be able to realize all of these benefits immediately. Only after you have been using the software for a good 6 months should you begin to compile new data. This allows your team time to adopt new processes, receive additional training from the software vendor and adapt to the change. It is then appropriate to complete the same analysis as before the search to better determine how the new system has helped improve business processes. Remember that not all benefits will be tangible, however, you can still gather enough information to reasonably measure these benefits as well. Below we share some examples.

Measuring Intangible Benefits

Accounting inventory software helps to automate processes, allowing employees to reduce the amount of time spent on administrative-type tasks, therefore enabling them to focus on more meaningful work. For example, Blue Link’s accounting inventory software allows users to automatically email customers when A/R accounts meet certain pre-determined criteria – such as dollar value or time frame. This means fewer employees and less time is spent manually tracking accounts and notifying customers. Instead, employees can spend this time on more productive work. Although it’s easy to measure the time saved by automated processes, reducing administrative and manual work can also help increase job satisfaction which is harder to measure. For salespeople, the implementation of an online order portal allows them to place orders on behalf of customers and provides real-time access to important account information, pricing and available inventory. This reduces the amount of time spent going back and forth with people in-house trying to determine inventory availability and the amount of double entry by allowing salespeople to create an order in the field. This frees up time for salespeople to spend prospecting new accounts, working with other customers and selling product. Another consideration when it comes to measuring the success of implementing software is the cost savings from not needing to hire new employees. When order volume increases, instead of hiring another employee, accounting inventory software allows users to create workflows for automating the order entry process. For example, when an order is placed online it gets automatically sent to the warehouse for picking, packing and shipping based on pre-determined criteria. This saves time trying to find, hire and train a new employee and the costs associated with paying an annual salary and covering benefits and other terms of employment.

The best way to measure the success of a software implementation project is to prepare in advance. Create benchmarks based on existing processes and speak with employees to get the full picture of how much time and resources are spent on any given task. After you have been using the new solution for at least 6 months, begin to evaluate the same criteria to compare against your existing benchmarks. You will likely find that there are always ways in which your business can become more efficient and so working with a software vendor who you can count on as a trusted technology partner will allow you to continuously track, measure and improve business processes.