GITNUX MARKETDATA REPORT 2023

Must-Know ERP Metrics

Last Updated: October 31, 2023

Written & Summarized by: Jannik Lindner

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Highlights: The Most Important Erp Metrics

1. Order-to-Cash Cycle Time
2. Days Sales Outstanding (DSO)
5. On-time Delivery
6. Perfect Order Rate
7. Purchase Order Cycle Time
8. Return on Assets (ROA)
9. Return on Equity (ROE)
10. Return on Investment (ROI)
11. Supplier Lead Time
12. Total Cost of Ownership (TCO)
13. System Uptime
14. User Adoption Rate

Erp Metrics: Our Guide

Understanding and leveraging ERP metrics can dramatically improve the functionality and efficiency of your business operations. In this blog post, we’ll dive into the most critical ERP metrics you should keep on your radar. Learn how to utilize these invaluable tools to optimize your ERP system, streamline your business processes, and enhance your decision-making strategies.

Order-To-Cash Cycle Time

Order-to-cash cycle measures the time from order to payment. It evaluates order processing, manufacturing, and billing efficiency.

Days Sales Outstanding (DSO)

Days sales outstanding (DSO) measures the average time it takes to collect customer payments. It assesses credit and collection policy effectiveness.

Gross MTurns

Inventory turnover measures how often inventory is sold or used, indicating demand forecasting, supplier management, and manufacturing efficiency.

On-Time Delivery

It measures the percentage of orders delivered to customers on or before the committed delivery date. It helps assess supply chain effectiveness and customer satisfaction.

Perfect Order Rate

Perfect order rate measures complete, on-time, and accurate deliveries, indicating efficient order management and customer satisfaction.

Purchase Order Cycle Time

This metric measures the average time taken from the initiation of a purchase order to its completion. It helps evaluate the efficiency of procurement processes and supplier relationships.

Return On Assets (ROA)

ROA is the ratio of net profit to total assets, showing how efficiently and effectively management is using company assets to generate profits.

Return On Equity (ROE)

ROE is the ratio of net income to shareholder equity, indicating the company’s ability to generate profits for shareholders.

Return On Investment (RO!)

ROI measures the benefit an investment will provide in return for the investment’s cost. Higher ROI indicates a better return on investments made in the business.

Supplier Lead Time

Supplier lead time measures the time suppliers take to deliver after receiving a purchase order.

Total Cost Of Ownership (TCO)

TCO measures all costs of an ERP system, helping choose the most cost-effective vendor.

System Uptime

This metric measures the percentage of time an ERP system is available and operational. High system uptime is critical for operational efficiency and employee productivity.

User Adoption Rate

User adoption rate measures ERP system adoption and usage, indicating training, support, and system effectiveness.

Frequently Asked Questions

What are ERP Metrics?

ERP Metrics are key performance indicators (KPIs) that help businesses measure and analyze the effectiveness and efficiency of their enterprise resource planning (ERP) systems. These metrics are used to improve decision-making, transparency, and overall performance within an organization.

What are some common ERP Metrics used by organizations?

Some common ERP Metrics include order-to-shipment cycle time, average production cost, stockout rate, on-time delivery rate, and gross profit margin. These metrics can give insights into various aspects of an organization’s performance such as inventory management, customer service, and financial health.

How do businesses benefit from using ERP Metrics to analyze their systems?

By tracking and analyzing ERP Metrics, businesses can identify areas that require improvement, monitor progress towards goals, and make well-informed decisions. This ultimately leads to increased efficiency, cost savings, and better overall performance throughout the company.

Can ERP Metrics be customized according to the specific needs of an organization?

Yes, ERP Metrics can be customized to cater to the unique requirements of different organizations. Businesses can choose to track industry-specific metrics or modify existing metrics to align with their unique strategies, operational processes, and goals.

How often should businesses monitor and analyze their ERP Metrics?

The frequency of monitoring and analyzing ERP Metrics depends on the specific needs and goals of an organization. It’s essential for businesses to establish a review process that works best for them, which could involve continuous, real-time monitoring or a periodic analysis based on weekly, monthly, or quarterly intervals. Regular assessment of ERP Metrics can help organizations stay agile and responsive to changes in their business environment.

How we write these articles

We have not conducted any studies ourselves. Our article provides a summary of all the statistics and studies available at the time of writing. We are solely presenting a summary, not expressing our own opinion. We have collected all statistics within our internal database. In some cases, we use Artificial Intelligence for formulating the statistics. The articles are updated regularly. See our Editorial Guidelines.

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