Implementing a new ERP system within your company is a challenging transition and an extremely rewarding change – if implemented properly. To ensure the success of your ERP changeover, it’s essential you have a solid plan of action.
The following is a 10-step framework that will take you from day one of planning through to launch.
01/ Stakeholder goal alignment and agreement on where the business is going
The reason most ERP implementation projects are derailed is because the business lacks a clear vision and goals for the future. The lack of clarity in many situations limits stakeholder buy in.
Getting the project across the line involves many players company-wide. And each department will have their own motivations and reasons for selecting a certain solution or blocking change entirely. It’s essential that there is a ‘meeting of minds’ and that all stakeholders agree on the direction and growth plan for the future.
02/ Core areas of competitive advantage have been identified
Implementing a new ERP is a transformational business initiative that should provide your company with competitive advantages. The decision to change shouldn’t be taken lightly or made with incomplete information.
There are many factors that go into the decision-making process when choosing an ERP vendor. Since it is a costly and time-consuming process, it’s essential you make the right choice by evaluating the key functionality that will provide your business with the greatest competitive advantage in the future.
03/ Current processes have been documented
Analyse your business processes and take honest stock of the ways your business could and should change, as well as the ways ERP capabilities could improve business performance.
Gather and analyse copies of key documents, such as reports and spreadsheets used to manage important operational processes, and locate specification and process documents if they exist.
04/ Understand and accept that compromises will have to be made
It’s unlikely that any single ERP solution will be able to meet your current and future requirements completely.
You’ll need to face the fact that there will have to be compromises on some things – but your decision about what functions you’re prepared to compromise on should be based on your competitive advantage. Consider this: if an integrated ERP system can meet 80 per cent of the needs of your business, where does your competitive advantage or value proposition lie?
05/ The right team has been appointed
The ERP project will affect every functional area of the business, and that means everyone from senior leadership to middle management and staff-level employees will be involved in the implementation at some point.
The first thing a business should do in preparation is establish an internal team that will have the influence and authority to get company buy-in and get the job done. You can read more about what your project governance team could look like by downloading our free eBook, “Making the ERP transition – A guide for CFO’s and decision makers struggling with the growing pains of successful NZ businesses.”
06/ Key resources have been back-filled so they can give the right amount of attention and time to the project
Once you’ve identified your key people who will be steering the ERP project, consider who will be doing their day-to-day jobs while the implementation is in process. If your key employees and business experts are going to be tied up half the time on the project, it may be in your best interest to back-fill these positions — and don’t forget to factor temporary pay for any external hires as an internal cost.
07/ Data is clean and IT infrastructure is ready ahead of time
Data quality is a big issue for most companies who have grown and evolved with a ‘mash up’ of systems. The task of cleaning data must be done before implementation of any new system. Get a head start and engage your team on a data clean up project as soon as possible – it’s time consuming and not something that can be left to the last minute.
08/ Vendor documentation is thorough – no assumptions
After you’ve narrowed down your list, request demos from vendors you are considering. It’s very important to see an ERP system in action, and a reputable vendor won’t have any trouble arranging a thorough demonstration. In addition to demos, request documentation that showcases how the ERP system will meet your business needs.
09/ Risks have been identified and there is a good cutover plan
It’s important to identify the business risks of switching over to a new ERP system.
Establish what needs to be working on day one of going live and what can be refined later down the track. By de-risking your project you will be able to avoid the ‘operational fatigue’ that can wear down your employees and key team members with a never-ending project.
10/ Testing has been planned into the project
After a long decision process, followed by a long vendor selection process, followed by a long implementation period – not to mention a huge financial investment - many businesses are tempted to (and often do) scrimp on the testing phases before key releases.
The best approach is to plan and budget for thorough testing from the outset. And don’t be tempted to use your internal people to test – a proper testing process involves a specialist third party who will pick up issues your internal people become ‘blind’ to, because they are so familiar with the project.
If you’re wondering how to approach an ERP project and how to get your business ready for implementation, check out our recent eBook, “Making the ERP transition – A guide for CFO’s and decision makers struggling with the growing pains of successful NZ businesses.”