Why KPIs Help Take the Guesswork Out of System Integration

  • December 02, 2016
  • Feature

By Glenn Johnson, Senior VP, Magic Software Americas

System integration projects, if done right, can provide a big boost to enterprise productivity. Eliminating repetitive data entry and putting the right information needed in front of the user improves efficiency and the quality of customer service.  

KPIs can be used at multiple levels for system integration projects to evaluate their success at reaching targets. Everything from an increase in sales revenues, profit margins, accounts payable turnover, inventory turnover, and fulfillment rates are measurements of productivity that can be positively influenced as a result of successful IT projects.

Well defined KPI’s can prevent goals from becoming too low level or worse little more than guesswork. The aphorism attributed to Lewis Carroll “If you don't know where you are going, any road will get you there,” applies quite well to management of a systems integration project.  Taking the time to calculate KPIs can keep your project on track.  

Here are four reasons why KPIs should be an essential part of your systems integration plans:

  1. Broader 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 organization
  3. IT Becomes More Strategic.One of the struggles of IT management is to make that leap from being perceived as a cost center to an enabler of digital transformation that boosts the bottom line. By translating the systems integration project benefits into business KPIs, the benefits IT brings to the organization become clear. For example, ERP system integration projects can result in reduced inventory costs, faster planning cycle times, improved fulfillment 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.
  5. Quicker approvals. 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.
  7. Lower Risk and Fewer Errors. 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. 

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 eliminates guesswork and helps technology do what it does best: make a business run better and more profitably.

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