ERP: To Get the Value, You Need to Actually Use it

  • Modern Manufacturing

There is no shortage of ways by which we measure the success of an ERP implementation. For years now Mint Jutras has quantified the results in terms of performance improvements measured since implementing a solution and progress achieved against company goals. While the ERP solution providers might be tempted to take sole credit for these improvements and progress, we know that it is always a combination of people, processes and technology that really produces results. Today we’re focusing on the people part.

“Employee engagement” is a hot topic in Human Resources (HR) and Human Capital Management (HCM) circles these days. It’s right up there with talent management at a time when many manufacturers are facing a shortage of skills. While employee engagement might be hard to measure in a generic HCM sense, it’s pretty easy to measure in the context of ERP. It all boils down to whether or not your employees really use it. If you can’t get your people to actually use the software, then why bother?

If they don’t, there are generally some very simple reasons:

  • It’s too hard to get access (think remote workers and distributed sites)
  •  It’s too hard to use once they do gain access
  • They don’t see enough value to bother
  •  You haven’t purchased enough licenses to allow widespread use

None of these seem to be issues for customers using the Plex Manufacturing Cloud, which explains why they have been leading the way in terms of ERP engagement for several years.

How Do We Know?

Plex has long been an active research partner with Mint Jutras, encouraging its customers to participate in our annual Enterprise Solution Studies. In 2017 alone we collected 126 responses from Plex customers. As in prior years, we asked the question, “What percentage of your employees use your enterprise solution NOT including those that only have access to self-service functions like paid time off, benefit administration, purchase requisition, etc.?” Figure 1 gives you a good feel for why we think Plex leads.

What percentage of employees use ERP?

First of all, we recognize this is a far cry from the early days of ERP. Back then only a select few employees ever put their hands directly on a solution - perhaps 10% to 20%? Those ERP users were generally heads-down data entry clerks and a few “super users.” If anyone else wanted information they relied on reports printed on green bar, continuous form paper, or they asked those super users for answers. In our chart, we begin with 2013 because that was the first year we saw the percentage of manufacturing employees using ERP nearing the 50% mark. Note that 73% of employees at Plex customers were already engaged.

But what else does Figure 1 tell us? Well, it gives us the first hint as to why Plex customers are ahead of the pack. In 2015 we had enough software as a service (SaaS) ERP users participating in the survey to break them out as a segment. As you can see, those running SaaS ERP have 23% higher participation in the use of ERP than those with more traditional deployments. So, right there Plex has an advantage.

SaaS Provides Easy Access Anytime from Anywhere

Plex was an early SaaS pioneer. Its ERP solution was born in the cloud long before the advantages of SaaS were widely recognized or acknowledged. A SaaS solution inherently addresses the first reason for lack of employee engagement with ERP – difficulty in gaining access, particularly for remote workers. Our 2017 Enterprise Solution Study found that 61% of all manufacturers and 81% of Plex customers cited ease of remote access for a distributed workforce as a benefit actually realized in moving to the cloud.

But the engagement within the Plex customer base exceeds even those running SaaS solutions. So let’s take a look at how Plex might overcome the other challenges to employee engagement with ERP.

Ease of Use

The second reason employees might choose not to engage with ERP, particularly at the executive levels: It’s just too hard to use. Of course everyone has his or her own definition of “ease of use.” But the simple fact is, the easier the software is to use, the more it will be used.

ease of use factors for manufacturing ERP

All participants in manufacturing companies place the highest value on intuitive navigation, efficiency in completing tasks, easy access, and the ability to get done what they need to do easily and naturally. Plex customers place an even higher value on these characteristics. The fact that 81% of employees at companies running the Plex solution actually use the software - an engagement rate 30% higher than your average manufacturer – tells us Plex must be pretty easy to use.

Gaining Value

Even if the software is dead easy to use, if it doesn’t bring enough value, the employees are likely to disengage. And yet we don’t see that happen at Plex sites. Although the numbers are starting to level out, we’ve seen engagement increasing year over year, for many years. And the results measured since implementing the Plex Manufacturing Cloud are impressive. Some are quite staggering (Figure 3). The value derived is pretty clear.

Manufacturing ERP Cost and Cycle Time Improvements

One More Thing…Having Enough Licenses

There is one more reason why many fail to have a high percentage of employees using ERP. They simply can’t afford to purchase enough licenses to open it up to all employees. Most ERP solutions are licensed or subscribed to (think SaaS) on a per user basis. You might have named users, which is exactly what it sounds like – you purchase a license or a subscription for every employee that might need access. Or you might have concurrent users. You might have 100 employees, but they work over three shifts, so you would never have all 100 logged in at the same time. Perhaps you buy a license or subscription for 35 concurrent users. When the 36th user tries to log on, they can’t until another user logs out.

In a real three-shift environment, this isn’t very limiting. But oftentimes companies purchase less than the optimal number of concurrent users simply to reduce the cost. In fact the same may be true of named users as well. This will have a direct impact on the level of engagement of employees and consequently the value derived.

Plex takes an entirely different approach to licensing, or rather, subscriptions. The company firmly believes in providing an unlimited subscription environment to include not only employees, but also customers and partners as appropriate. And therefore rather than counting users, it negotiates an enterprise-wide subscription based on the size of the company and the breadth of the implementation. Once negotiated, any and all employees within the company are allowed and encouraged to access and use the solution, and potentially supply chain partners and customers as well. This is a huge differentiator in the ERP market.

Conclusion

The results you achieve and the progress you make in running a successful manufacturing business always come from a combination of people, processes and technology, including the software that runs your business. But you simply can’t take full advantage of that software unless you actually use it. The more you use it, the more value you derive. And by “you” we don’t mean just a select few. It takes a full complement of employees to run your business. And therefore, a full complement must actively engage with the software. But it also takes partners to optimize your supply chain, and of course, customers managing their own orders from you. The easier it is to engage with you, the stronger the supply chain and the happier the customer.

Plex Systems has designed its software and its business model to encourage this level of active participation. From this perspective, it is certainly leading the pack when it comes to customer and customer employee engagement.

About the Author

Cindy Jutras, President, Mint Jutras

Cindy Jutras is a widely recognized expert in analyzing the impact of enterprise applications on business performance. Utilizing over 40 years of corporate experience and specific expertise in manufacturing, supply chain, customer service and business performance management, Cindy has spent the past 9 years benchmarking the performance of software solutions in the context of the business benefits of technology. In 2011 Cindy founded Mint Jutras LLC (www.mintjutras.com), specializing in analyzing and communicating the business value enterprise applications bring to the enterprise.