10 Steps to Ensure ERP Implementation Success
From being a mere business management software program to being an integral part of a business, the ERP solution has come a long way not only in terms of smoothing the business process but also with boosting the business’ overall growth. The complexities and multiple activities of businesses, cutting across all country and time zone borders inflict unwarranted chaos. It is here where an effective ERP solution with its far-reaching effect irons out chaos into a systemic design for continuous delivery of positive output for the company. It streamlines and accelerates the business process providing a competitive edge to the company.
It is said, “first right move leads to half of the war won”; thus, it’s fundamental to have a correct implementation of ERP for optimal utilization. Below we present the “10 Must-Follow Steps” for successful implementation of the ERP solution.
1. Identify the problems / Set the objective(s)
ERP provides a vast solution to many issues faced by companies. However, it is very important to identify the real objective for implementing ERP. The question is less about “should we implement” and but more about “what should ERP be implemented for”. The Key Performance Indicators (KPI) have to be analyzed in order to understand the necessity of the software intervention.
Key objectives are necessary; not only with respect to the present but also because future projections are included in the requisition list, which allows a business to factor in the scalability and accommodating changes in the future of the business/industry. So again, it is essential to identify the problem or the exact necessity motivating the ERP.
2. Define scope/team
The objectives can be many, ranging from bringing in the transparency of operations to having financial control, supporting organic expansion, supporting acquisition or supporting common processes. As per Panorama study, 61.1% of ERP implementations take longer than expected and 74.1% of ERP projects exceed budget. The primary cause of the delays and over budgeting is the unclear definition of the ERP requirement.
The ERP features must be evaluated in accordance with the barometer of synchronization within the needs of company. Depending upon the budget and core necessity, the ERP demand list should be generated which achieves a smooth and hurdle less ERP implementation.
3. Brainstorm/evaluate the options
As per Capterra, approximately 33% of ERP buyers did not demo a product before buying it and approximately 22% of companies surveyed reported they bought the first system they looked at. These are dangerous statistics, not only for those who implement the ERP but also for the vendors, as optimal utilization of ERP software remains a dream. For successful utilization of ERP software, the management of the company has to invest its time in evaluating the options available.
In the 2015 ERP report, it was found that 93% of the companies customized their ERP software to some degree according to their intended use. The customization could sometimes lead to an increase in the failure of the ERP system as it may increase the complexities. The organization needs to understand the difference between ERP package configuration and customization clearly because many times the requirement is fulfilled by the purchased of the ERP system and no customization is needed. Evaluating ERP options is a very important task, as options are to be evaluated based on current needs, as well as against future requirements.
New additions, like cloud ERP solution or SaaS ERP, are the current preference of customers, as these options –are available in different scope and flexibility to accommodate future requirements. Thus, a company needs to brainstorm with the ERP vendors/ consultants to bring in the best system in the organization.
4. Data migration
Once an ERP solution is identified, the next biggest and most important step is of data migration, which provides for a smooth transition and future utilization of the software.
Implementing an ERP can be a huge change, especially if the company is trying the software for the first time. Identifying which data are necessary for successful transition to the common software problem is very important. Most software allows the input of data but entire data shifting may burden the software.
Therefore, only the necessary and most important data should be transferred to the software, and great care should be taken to ensure that the data is retrieved from the software, whenever required.
5. Check infrastructure
Preparing the company for the ERP implementation is at the core of all of the steps of ERP implementation and plays a vital role in the process, be it a success or failure. After detailed brainstorming between the vendor and its management, the requisite infrastructure is installed.
According to Mint Jutras, 23% are unable to grow their business as quickly as they would like and believe this to be because they lack the tools they need in their current ERP system. The infrastructure on which the software will run, has to have the scope of scalability along with options to update as per the demand. Such requirement should not be limited.
ERP software is designed after a significant amount of research and according to the needs of the specific industry. In some cases, there may be no need for the customization. Implementing an ERP solution is a big investment decision by the company involving a large pool of resources, therefore, management has to continuously maintain tabs on the ERP software and maintenance schedule.
During the pilot testing, management has to evaluate the realization of the value of the system against the desired value of the company. One should have a check on the system adopted by the company since its inception — so long as the company is following best practices OR it un-follows some unconventional/old methods regarding the ERP being fit-as-it-is-bought?
These questions should be answered prior to customization as there is a chance that even before understanding the software, the system and making positive changes, and the need may never arise to customize the software.
7. Change management
Employees of any company are accustomed to the same kind of activities performed through a defined process in their daily routine and any changes may not be easily-accepted, especially when it is something as influential as ERP and that is when Change Management becomes crucial. ERP is not a fixed asset like a computer which is purchased and set up in the company office; it’s actually a system that would change the environment and the working-style for the better, which affects not only one or two operations but all.
Management should involve their employees and prepare them mentally to answer the critical questions like — Why is it important for the organization to include ERP? OR How would an ERP boost productivity? OR How would an ERP automate back-office functions and save time? A series of brainstorming sessions, updates on related developments and resolving queries would build employees’ confidence and prepare them to welcome the good change with open arms.
Change is for one and all and communicating this positively to the employees will make things easier as an ERP can only provide optimal results when every employee accepts the change. Therefore, care must be taken to ensure a smooth, yet successful transition by building employee consensus and confidence.
8. Technology & Knowledge Transfer
21% of ERP implementations fail to deliver significant business benefits. The reasons vary, starting with improper customization for non-optimal software utilization resulting from ill-trained personnel operating/feeding data to the solution. Training is the most important aspect of the ERP software implementation process. It ensures there are fewer issues and more success, especially when ERP is implemented for the first time in the company or when the platform is changed from one ERP solution to another.
The company’s management must ensure proper vendor detailing and technological know-how to the company’s in-house IT support staff. Proper use of technology and an effective knowledge transfer, along with proper training should be considered since they are the parties responsible for the entire project’s success. Considering the consultant to be a part of the project would not only assist in a smooth and unhurdled operation, but would also reduce the time gap between the untimely glitch and the solution.
9. Project management and Testing
After evaluation of all available options, selecting the best-suited and then training the employees, the real aspect of implementation is the project implementation itself. According to a Panorama Research study, 40% of ERP implementations cause major operational disruptions after go-live; therefore, proper implementation is imperative.
The rigidity may backfire since there are a lot of time gaps between the processes of selection, evaluation and implementation. . There is also a lateral improvisation which should be incorporated. Simultaneously, the core objective should not be diluted or changed. Testing is an important phase of the implementation process, which takes care of system and user acceptance testing.
10. Final touch (go live) & on-going support
Once the ERP solution is properly-checked and implemented, it is the time to go live. It is advisable to pursue one additional functionality test, just as a safety precaution. An ERP solution is not a one-time event, but rather a continuous process. It is something that the company has to continuously keep tabs on to avoid any aberrations or systemic glitches which could affect the ERP software functionality.
Finally, regular vendor software updates are one of the solution requirements upon completion of implementation. Maintenance must also be periodically performed as an aspect of ongoing support, which helps ensure a smooth, functioning solution.
Originally published on Skyward Techno