10 Things You Should Consider While Implementing an ERP For Your Business
Updated: Feb 26, 2020
As enterprises voyage towards improved processes that help them to scale at a faster pace, ERP plays a vital role in facilitating the journey. While it may seem like just adapting and integrating software, ERP remodels many operational, planning, and resource-oriented aspects in any company.
Successful implementation of ERP can lead to desired business outputs and can make the exercise worth the effort and cost. Failure in ERP implementation can not only lead to loss of productive hours and capital investment, but it can also cause serious business repercussions due to overlapping processes and silos.
Various reports suggest that over 70% of ERP projects fail. One of the most infamous ERP failures was that of Hershey’s when because of the ERP failure, the company couldn’t deliver $100 million worth of chocolate just before Halloween in 1999.
To ensure that the ERP implementation yields positive business outputs, we’ve created a checklist for ERP implementation. This checklist will ensure you sail through the successful implementation of ERP in your organization with no hiccups and promising ROI.
Factors to consider while implementing ERP for your business: A checklist
1. Get the buy-in of the upper management and leadership team
To begin with, ERP demands a significant investment of time, energy, and cost. To kick-start the process of ERP implementation, it is necessary to get the approval of upper management. Start by introducing the key benefits of ERP to your management team. Ensure that your leadership team is aligned with your goals and be open to addressing their concerns and queries. Understand the deliverables and objectives that your company’s leaders expect out of the chosen ERP software and the project. Obtain a budget for ERP implementation, which can help you make the next decisions in the process.
2. Carefully define the scope and clearly define the requirements
ERP extends solutions to improve several processes in an organization, but the key here is to identify which requirements you are looking to solve. Initiate a comprehensive requirement gathering to understand the scope of the ERP implementation, ensuring that you don’t overlook the small details.
This stage might take up the majority of your time in the implementation process, but it is well worth it. Identify the gaps in your current processes and match appropriate solutions that ERP can offer for each. Consider the future requirements and ensure your scope is scalable and future-proof. Understand that without planning the scope and requirements accurately, the implementation may take a longer time than anticipated and also cross the defined budget.
3. Onboard an experienced ERP consultant with a strong domain knowledge
A little or more handholding can be beneficial when it comes to implementing ERP at an organizational level. An experienced ERP consultant comes with extensive ERP knowledge and can carve the path for your ERP implementation. Since an ERP consultant is an outsider for your enterprise, she/he can offer the most unbiased advice without any vested interests. An ERP consultant can recommend the most suited ERP software based on your requirements. Further, this consultant can train your company IT team on the technological know-how to ensure proper customization and optimal software utilization. Look for a consultant who has strong domain knowledge and experience of implementing ERP for your industry.
4. Involve key employees from various functional areas and build a core implementation and change management team
For successful implementation of ERP- right from the planning to selection to actual onboarding, education, training, and usage, you can’t run the show alone. Involving key employees from different functional areas can alleviate your load of implementing ERP on a large level. Since ERP is designed to overhaul the processes and working styles across various levels, reluctance, lack of knowledge, hesitation, and sometimes, even resistance is anticipated. A change management team can help to educate and guide the employees, create awareness, and answer questions.
5. Evaluate and select the right software for your needs
Since you have already identified the challenges and the requirements you want your ERP software needs to address, shortlist the software vendors that match your criteria the most.
Look for a solution that matches your technical requirements. Is your solution mobile-ready? Do you need an on-premise solution? Or are you looking for a cloud-based solution? Rather prefer a hybrid one? Share your requirements upfront. Seek the advice of your consultant, schedule product demos, and test the product yourself before making a decision. Check the solutions used by your competitors or organizations similar to yours and ask your vendors for references. Compare prices and then zero on your solution.
6. Migrate your legacy data
ERP is set to enhance your existing business processes, but it should not impact the security and accessibility of your legacy data. Identify how much of your legacy data needs to be transferred and ensure that your infrastructure is ready for the same.Not all data can be converted, decide which data is outdated, and clean-up the data before you migrate it to the new system. Ensure that the data fed into the new system is accurate.
7. Don’t go after over customization in the initial phase
While customization and scalability are two attributes that you should always look for in an ERP solution, do not go overboard with it, to begin with. Choose a solution that is customizable, but in the initial roll-out, stick to the basics. Evaluate the risks and rewards of customization- understand the downsides and risks in customizing the software, especially in the initial phases, and then make a decision.
8. Keep risk management in check
Okay, so you have an ERP consultant, a change management team, and an ideal ERP software solution. But always test, test, and test again. Keep a plan B ready to fall back on in case something goes downhill. It can be anything from migration faults to technical errors.
9. Create a detailed roadmap for periodic enhancements
Your ERP implementation will need upgrades, changes, and updates from time to time. As we suggested in point no 7, don’t go overboard with the customization but evaluate the anticipated requirements for the coming 3, 6, 9, and even 12 months. Have a detailed roadmap in place and train your implementation team on the same. Remember that any changes and upgrades will undergo external audits, be ready for compliance checks with diligence.
10. Continuously gather feedback after implementation
This one is for after you go live with your ERP implementation. Once the ERP is set in place, ensure user acceptance for the product, and find knowledge gaps to ensure the system is utilized in the best possible way. Have post-implementation audits, and after one week of going live, start evaluating the ROI. You won’t necessarily have the best results at the start but be patient and continue to evaluate. Ask your implementation team to gather feedback and responses. ERP implementation is not a one-time job, but an on-going process that evolves as your business needs change. Incorrect implementation of ERP can not only run to latent, fault business processes, and impact revenue, but it can also be frustrating for your employees. Do it right with this extensive checklist, and you are set!