System integration (SI) projects, if done right, can provide a big boost to enterprise productivity, says Kerry-Lyn Hope, Business Development Manager, Magic Software South Africa. Eliminating repetitive data entry and putting the right information needed in front of the user improves efficiency and customer service.
Organisations use KPIs (key performance indicators) at multiple levels to evaluate their success at reaching targets. Everything from an increase in sales revenues, profit margins, accounts payable turnover, inventory turnover, and fulfilment rates are measurements of productivity that can be positively influenced as a result of successful IT projects.
So why do most organisations neglect to include KPIs as part of their system integration project planning process?
There are hundreds of KPIs across different departments that can be used to show how SI projects save time and money while improving customer satisfaction. Taking the time to calculate the ones that are the most relevant for your project is well worth it.
Here are five reasons why KPIs should be an essential part of your SI plans:
1. Widens your project scope - When KPIs are calculated in the early stages of a project, new opportunities for improved efficiencies can be discovered. For example, when automating the sales process there could also be additional benefits for finance, including a reduction in days sales outstanding, reduction in collection time for accounts receivable and time reduction to close books. If financial analysts are involved up front, exploring all the additional benefits, additional business processes can be included in the project, increasing its impact and value to the organisation.
2. Raises IT's profile - One of the struggles of IT management is to make that leap from being perceived as a cost centre to an enabler of digital transformation that can boost the organisation's bottom line. By translating the SI project benefits into business KPIs, the benefits IT brings to the organisation become clear. For example, ERP system integration projects can result in reduced inventory costs, faster planning cycle times, improved fulfilment rates and fewer back orders as a result of more accessible, relevant and accurate product data. These KPIs will be more effective at getting an executive's attention than simply saying that a SI project will take X amount of days and cost Y dollars.
3. Speeds up the approval process - Providing return on investment figures using KPIs will accelerate the time it takes for projects to be approved by management and finance since the value of the project is clear. Since the figures are generated as a team effort with the business managers, there will be the necessary buy-in from management up front which will increase the credibility, urgency, and priority of the funding request.
4. Works the kinks out ahead of time - System integration projects have a reputation for becoming unwieldy. Calculating KPIs in advance requires more detailed system requirements. In order to estimate the benefits of the improved efficiency, each process that's automated needs to be inspected carefully. These detailed reviews can uncover new information that might have otherwise resulted in unpleasant surprises.
5. Keeps project on track - In such projects where multiple teams in different environments are responsible for delivering on one project, and where a large number of dependencies exist, KPIs provide the needed controls to ensure success. According to Anwar Shaik, founder of High Society, a technology solutions company, "KPI's are crucial to software integration projects. Without the ability to accurately measure progress, it becomes commonplace to lose focus on the real goals in favour of showcasing technical genius. Too much time and money is often spent on creating a solution with a plethora of technological masterpieces, none of which has any overall impact on the business."
Working hand in hand with business managers to define KPIs to measure the project's value will boost the project's chances for success. Including KPIs with a business plan can only add value to the project itself, and will position the IT department as management's strategic partner. Keeping track of important KPIs helps technology do what it does best; make a business run better and more profitably.
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