10 Things You Need To Know About ERP Implementation
ERP systems permeate virtually every operational aspect of an enterprise. Great care and planning are necessary to successfully complete these organizational changes. With good strategy and patience though, the benefits can be well worth the effort. Here are our ten things you need to know about ERP implementation.
1. ERP projects require careful planning
We’ve mentioned it before, the key to success is simple: well understood and defined goals. From these goals the company and the software partner can plan the implementation project. It is crucial to spend enough time up front exploring the business’ requirements and defining a clear set of goals and objectives for the ERP project. A partner with a proven methodology, as determined by their previous experience and track record, will be instrumental in ensuring that the plan follows the goals and the implementation follows the plan.
2. Create an oversight team
A strong tactical team that can manage change and steer stability is vital to success. This team will be responsible for help desks, testing, training, database administration, documentation, and other operational issues and details.
3. Executive Involvement and Team Work
An ERP project is a large investment designed to improve the processes of the business going forward. As such, it stands a better chance of success with the involvement and oversight of the business’ executives. A strong executive presence will set the right tone for the project when conducting team briefings and training across the enterprise. Implementing the software is a team project, involving the software partner, executives, and representatives from the business’ various departments. Be sure that roles and responsibilities are made clear within the executive body and to employees.
4. Understand “why” before implementation
Know what is driving the project. Understand what the key deliverables are and the objectives. Know what assumptions the various leaders within the company have about both the software and the project. Knowing these things will help your team understand the expected results, foster open communications, and hammer down the focus of the project.
5. Know what is and what will be
Identify the gaps, or differences, between what is currently present and what is to be implemented. For example, you might be going from manually tracking inventory and delivery to integrating bar code scanners into your inventory and delivery system. Your first major task is to identify these differences, both functional and non-functional. A vendor may provide an implementation plan, but doesn’t know your functional gaps. Be sure you fully understand the functionality that is to be delivered.
6. Adhere a Comprehensive Understanding of Customization
Customizations in ERP are the very definition of a double-edged sword. Customizing the software can give businesses the exact functionality they are looking for, as it reconfigures the software to the company’s needs. However, it can also be risky (and costly) by removing the software solution from its update path, rendering it faulty, dated, and sometimes ineffective down the line. Either way, the best decision depends on the particular needs of the company, but it’s important to understand the risks and rewards associated with customizations.
7. Take advantage of Business intelligence Capabilities
Identifying the content, consistency, and structure of an enterprise’s data allows ERP systems to manage operations more efficiently and to handle more detailed analysis and reporting. Business intelligence is the database of business rules that need defined in order to achieve the benefits of the system. Part of the work done in implementing an ERP solution will be to determine how to organize, gather, and present the data collected through the company’s processes.
8. Risk management
Define your risks and include an escalation plan. Where are your sticking points? Is there a requirement for scarce skills? Is there a technology risk? Is there a migration path? Most risks can be mitigated with testing. Be sure to have a fallback plan ready at each milestone of implementation and testing where risks might arise. Any risk management plan should be clearly defined and have the oversight team’s approval.
9. Compliance considerations
Any significant upgrade, conversion, or implementation is prone to an external audit. The Sarbanes-Oxley Act, which regulates financial systems, for example and specific IT controls may affect ERP systems as well. Preserve project artifacts as evidence of due diligence and adherence to controls throughout the project. These artifacts include things such as data plans and results, project plans, issue logs, risk logs, and signoffs on significant reports.
10. Last but certainly not least…
Work closely with your software partner and draw from their experience in your industry. Adopt a learning mentality to learn best practices.
When a new business enters the ERP arena, the amount of information relating to products may soon become overwhelming, but the same cannot be said about information relating to the implementation process. Hopefully this article has shed some light into considerations to take when developing an ERP project.