A general manager at a mid-sized textile company in Bursa put it plainly last month: ‘We bought three different software systems in two years, but we still have no idea what any of them actually gained us.’ That single sentence captures the situation facing many SME managers across Turkey. There is an accounting system, a stock tracking program, perhaps a newly launched website — but no single indicator measuring the combined impact of all these tools. Technology spending happens; how that spending connects to business outcomes remains unclear.
The problem is not the tools themselves. ERP systems, web-based reporting platforms and corporate email infrastructure deliver real efficiency gains. The real issue is that after installation, these tools are rarely evaluated beyond the question of whether they are working. To measure the return on an investment, you first need to know what to measure — and that requires defining baseline indicators, meaning KPIs, before the investment is made. Most SMEs skip this step and end up with a functioning system but an unmeasured value.
Building a KPI framework does not have to be complicated. If you are investing in an accounting or ERP system, answering a few questions before go-live is enough: How many days does month-end closing currently take, and what is the target? How many hours are spent correcting invoice errors each month? How much working capital is tied up in excess stock? Write these numbers down, bring the system live, and ask the same questions six months later. The difference is the concrete value of your investment. This straightforward but disciplined approach turns technology spending from an accounting line item into a source of strategic decision data.
Measuring value from web-based tools works a little differently. When a company launches a website or brings email-based customer communication into a structured process, measurement is usually the first thing to be neglected. Yet web server statistics, the number of incoming inquiry forms or the share of orders arriving by email all show how these tools contribute to the sales process. As ADSL connections spread across the country, a growing portion of customers are making their first contact with suppliers online; if that traffic is not measured, the value of the web investment is simply unknown. A basic web statistics tool and a habit of regular record-keeping close that gap.
The concept of analytics is entering the Turkish SME agenda and is frequently misunderstood. Analytics does not require sophisticated software reserved for large corporations. Pulling a monthly sales trend from your ERP system’s reporting module, viewing profitability by customer, or identifying which product group is dragging down gross margin — all of this is analytics. What matters is taking these reports on a regular schedule and discussing them in management meetings. Entering data into the system is not enough; decisions need to come out of the data. Once that habit is established, the value of an ERP investment effectively doubles.
There is a practical constraint: in most SMEs, the time and personnel to do this work are limited. The general manager is simultaneously handling sales, production and accounting problems; finding an hour each week for a KPI review feels like a luxury. But this is a question of priorities. Processes that are not measured cannot be improved. A consistent weekly review of a handful of key indicators catches a hidden inefficiency months before it would otherwise surface. This is not an overhead cost — it is an early warning mechanism.
As you move into 2008 budget planning, evaluate your technology investments through the following lens: define one measurement question for each tool, identify what data you need to answer that question, and schedule a first assessment within six months of go-live. Tie purchasing decisions to a measurable business problem rather than to a list of software features. Instead of asking ‘what does this software do?’, ask ‘which specific problem does it solve, and how will I know it has been solved?’ Investments made through this lens tend to be more accurate from the start and, just as importantly, they launch a genuine learning cycle inside the organization.
This article was originally written in Turkish by Gökhan MERCANOĞLU on July 23, 2007 and has been automatically translated into English and other languages using machine translation.