8 Steps to Building a Successful ERP Plan

It is an exciting time for your business. You are planning to implement an Enterprise Resource Planning (ERP) system that can transform and revolutionize your company for years into the future. 

However, if you feel nervous about an ERP implementation, that’s actually a good sign that you recognize there’s work to be done. ERP projects are massive undertakings for organizations, and a lack of understanding of how an ERP works or how to successfully plan for an implementation can lead to immense wasted investments. 

Infamous ERP failures are common, but each of those failures were caused by poor planning and understanding of business needs. With over 2000 ERP implementations under our belts and over 25 years of experience, The Answer Company’s team of ERP implementations are confident in ensuring your ERP project is a success. To get started, we’ve gathered out top tips to building an ERP plan.


How to Avoid ERP Failure

Because of all the resources involved in an ERP, it is essential for you and your company to understand and research what an actual ERP implementation process is like.

Once you’ve done your research and you understand a bit more about ERP implementation, you need to plan for this daunting project!

How can you ensure your project delivers and in what ways can you align your project with the excitement people felt when they heard your business was implementing a new ERP system? How do you set your company up for a successful ERP implementation?

Based on our expertise, we’ve pulled together our top eight tips for building a successful ERP plan — and avoiding an ERP failure.


How to Create an ERP Plan

1. Create an ERP Project Team

This might seem simple, yet many new ERP project managers get an unpleasant surprise when they try and conquer the ERP plan alone. Creating an efficient and dedicated ERP team will make everything run more smoothly. We recommend these 4 core roles in your ERP project team:

  1. Project Manager: Typically the leader
  2. Application Analyst: Responsible for cleansing and migrating the data
  3. Application Developer: Oversees system customization
  4. Quality Assurance Test Engineer: Focuses on testing and performance efforts

However, your team does not end there! To ensure your project will be successful across all departments you will need a few more people. A major decision for any business should always involve upper management, a new ERP system is no different. Not only will your business have to implement new software, but there will be a completely new process in place. This requires buy-in and major support from all employees and it starts with upper management.

Here are some additional key stakeholders you can include, these can vary between companies and what ERP functionality you are planning to implement:

  1. Upper Management
  2. Accounting
  3. Sales Department
  4. Warehouse Department
  5. Floor Workers
  6. Engineers
  7. Human Resource Department

Most organizations try and plan the process as fast as possible; however, taking longer to plan, and doing it right, can be the difference between an ERP success and an ERP failure. Having these four core roles, upper management and key stakeholders involved in your ERP project team can help you avoid obvious mistakes.

2. Define Responsibilities and Expectations

If you want to succeed with your ERP project, you will have to know what success looks like for your business and your project team. Many – if not all – of your project team employees will be new to a project like this. Planning and implementing an ERP for your business is supposed to be new and innovative. Business owners, key stakeholders, and possibly even the project manager may not have any experience with an ERP project.

Hopefully, when you select your ERP vendor they will bring expertise to your team. However, this does not mean you should solely rely on your ERP vendor, as employees in your business will still look to your project manager and upper management for guidance. While your vendor can give you guidance and advice, it is your business, and no one knows it better than you and your team!

Roles and responsibilities need to be defined, tasks need to be clear with deadlines, and regular updates should be scheduled in order to keep your project on track. Additionally, critical success factors need to be specified for your entire team to stay committed and you can identify and address any shortcomings throughout the duration of your project. The sky is the limit in terms of what you can achieve, but if you can’t measure it, you won’t see the true benefits.

Key Items to Define:

  • Project Scope
  • Responsibilities
  • Strategy
  • Timeline and Deadlines
  • Benchmarks

To learn more about documenting your workflows and building an ERP team, take a read of our article: Getting ERP Discovery-Ready.

3. Outline KPIs to Track to Ensure Project Success

In order to effectively track and know if your ERP project was a success, you need to have the right key performance indicators (KPIs) in place. While there are many different KPIs we recommend starting by outlining these in your ERP plan:

  1. Revenue: After you implement your ERP, it is important to look at your bottom line. Are you experience revenue growth? ERP software helps you reduce costs by optimizing your business processes and also gives you access to real-time data for smarter business decisions that can increase sales.
  2. Customer Satisfaction: With an ERP system, resources should be better organized and streamlined, which should improve the business functions related to customer service. The best way to measure customer-related KPIs is by listening to your customers. Check reviews, distribute surveys, track new referrals, and see if you’re gaining and retaining customers.
  3. IT Costs: With the right ERP system, your company should be able to reduce your IT costs. With a modern ERP system, you no longer need to spend on extensive customization and upgrades.
  4. Inventory: Measure your inventory and see how much you have sold during a certain period of time. With ERP software, your inventory turnover should increase due to better visibility and more automation.
  5. Scheduling: Understand how effective your ERP is at allowing you to properly maintain your schedules. With an ERP, your estimates should be more accurate, bringing your “planned” numbers closer to your  “actual” numbers.

At the end of the day, there isn’t one approach to any ERP implementation. Every organization is different, therefore, you have to look inward and define what “success” truly means to you in the first place.

4. Choose Your ERP Partner

Now that you have established a project team and have defined your key responsibilities and expectations. You now need to find the right ERP consulting group as your implementation partner. This can be a long and elaborate ordeal because there are many competitors and not all of them will align with your goals.

You need a partner who not only knows the product but also a partner that has experience working with companies like yours. Remember, your ERP partner will be working closely with your team, so it is essential that your partner can work well together, provide guidance and support when your team needs it. Ask yourself, how they do business, what are their values, do they understand your culture?

A good ERP partner will work with you and develop an ERP plan, manage your implementation, and provide continued support after the ERP has been implemented. Let us make some criteria suggestion in order for you to make the right choice:

  1. What is their industry and technical expertise? Not only should the ERP partner you choose, have a thorough knowledge of the software, but they should have a good understanding of your organization and industry. Understanding the factors in your business will allow the partner to understand how the new ERP solution can and will integrate with your company. You can ask ERP partners to demonstrate their knowledge of your business or industry and have them showcase success stories of similar companies they have worked with. Additionally, you can look for evidence of expertise like awards, recommendations, and reputation. Some partners are recognized as a Gold Certified Partner by the software vendor and that can be a great sign.
  2. Are they compatible? With any partnership, you need to ensure compatibility. Your team will need to be able to interact with your partner during the implementation and in the months and years that follow. ERP projects can take months to complete and require many decisions and hard work, you will need to feel confident that you can trust your partners’ work ethic.
  3. What is their implementation methodology? Your ERP implementation partner should have an implementation methodology that you understand and agree with to ensure your project is completed quickly and smoothly. The longer it takes the more resources you use and the less buy-in you’ll have. The saying goes, “Time is money”. So the better the implementation methodology means the faster you’ll be up and running and the earlier you’ll see a return on your investment.
  4. How does their customer support look after implementation? Throughout your project, your ERP partner will be heavily involved in your business. They should be ensuring that your system works the way you expect it to in order to achieve your goals. Once your new system goes live, your connection with your partner should still be strong. Be sure to know what your partner’s support program looks like. Things to consider are, how can you continue to get help from them? Do they provide additional training for your team? Do they offer any online resources? Do they have a help desk for basic questions?

5. Clean and Validate Your Data

One critical step in ERP implementation is data migration. Unfortunately, this step rarely receives the required time and attention it needs in order to be successful. Data migration alone seems simple, you are moving data from one system to another. However, many companies underestimate data cleaning and validation which can lead to failed ERP implementations. Read about how poor data caused the failure of Target Canada.

The goal for many companies who implement an ERP is to provide visibility into the performance and health of their business. If you invest time and money into a new ERP system, you should also invest time and money into cleaning your data that goes into your ERP. Learn how to properly clean your data!

Here is a list of what to look for when cleaning and validating your data:

  • Completeness
  • Consistency
  • Accuracy
  • Duplication
  • Formatting

6. Measure Your Progress

All projects, no matter how well they are planned, can change as the project evolves and develops. You are bound to get busy, unforeseeable events may occur (like, for example, a global pandemic), and activities may be delayed for various reasons. This is why it is important to continuously assess what your expected ERP plan was versus your current plan. Failing to assess your progress can lead to unexpected delays or shocks throughout your project and possibly tack on additional costs. This means you should determine standards prior to the ERP project so that all stakeholders know what is expected of them, additionally at a minimum having regular team meetings for status updates.

“If you can’t measure it, you can’t improve it.”
– Peter Drucker

7. Focus on Change Management

The biggest reason why projects fail, particularly IT projects, is not the technology or software but the people. Okay, that sounds bad, but hear us out. When people are hesitant or even resistant to change, it can interfere with even the best ERP plans. Building active consensus and buy-in is crucial.

Too many organizations ignore change management in implementation, and they forget in the end the businesses’ employees will determine if the adoption is successful or not. If your employees and team members are not engaged and supportive of your project they will find ways to work around your ERP system.

You do not want to allocate time and money to new technology and find out afterward that your employees are resistant to the ERP software and decide to workaround it. Positive change management begins with communicating the worth to both the company and the individual. Someone on your frontline may not buy-in for the enhanced reports or faster close, but they will buy-in to less manual or double entries of data, and not having to deal with the clunky workaround you have in place right now.

8. Your ERP Project is the Main Focus

In your ERP plan, you should try and schedule your ERP project around a time that best fits your business’s availability. Avoid taking on any major projects until your new ERP system is completely operational, and if you currently have a large project already in process, it is smart to wait until that is completed before starting your new ERP project.

With any new process or system, there needs to be training, and there can sometimes be a learning curve. If your company is busy due to high demand, multiple projects or employees are just tied up doing other tasks then your ERP project is more likely to run into errors and mistakes because your main focus is not the ERP project. Your vendor will always be able to help you plan the best time for a go-live!

ERP project planning can be a daunting and difficult process for any company.  All companies are different and you will need to customize and adapt your ERP plan to your needs, schedules, and experiences to maximize your success. With the right strategy and methodology, you can successfully plan and implement a new ERP software and see significant advancements in your business afterward.

If you need any help deciding which ERP solutions are right for your business or need assistance developing a full-fledged custom ERP plan, our experts are here to help. Contact us to get started.

Book a Free Discovery with The Answer Company