ERP implementation in any organization has become essential in the current market space. It is needed to stay in the competition.
Statistics of all past implementations derive only 25% of them are successful.
This post is for increasing the ERP implementation success rate.
Let us first define what is ERP implementation?
ERP implementation is the process of making an organization run business operations with ERP. That includes understanding needs, installing software, migrating data & processes, and training people.
We are providing you the ERP implementation life cycle steps, and action items for each step to make it happen.
Steps of ERP Implementation
The following are the eight steps involved in ERP implementation.
- Requirement definition.
- Building the team.
- Selection and installation.
- Process and data migration.
- Validate with real-life data.
- Training the end-users.
- Taking it to the live production.
1. Requirement definition
The first thing to do is the requirement definition.
Tip: Define clear expectations before selecting an ERP solution. Be flexible with your timelines.
- Understand and make note of the existing processes of the business. Find problems in the existing system. Learn about bottlenecks, inefficiencies, and things that can be made better.
- Make software requirement definition documentation. Let this include technical and functional requirements.
- Make a plan with timelines and resources needed.
- Identify key performance parameters and define your desired results.
- Decide which process needs to be manual and which process needs to be automated.
2. Building the team
An implementation team needs to be built before implementing it. The team needs to have the following roles,
- Executive sponsor: Responsible for guaranteeing a project’s goals are aligned with the company strategy. Communicating and collaborating with both the management and implementation team.
- Project manager: Managing implementation team.
- End Users: Help in requirement definition and also providing feedback on the new implementation.
- Application analyst: Cleans and migrates data from the previous system to the new ERP system
- Software developer: Software features customization and installing the software.
- QA test engineer: Testing the system for accuracy in data and functionality.
- Build a team with the above-mentioned roles.
- Hire consultants who can understand organizations’ needs and who can communicate with clarity.
3. Selection and installation
- Shortlist and select software vendor based on requirement definition.
- Design flowcharts to show the business process between different departments.
- Build networking facilities, data collection, and display screens hardware.
- Install the required software and do the customizations needed.
4.Process and data migration
Organizations store their data in different formats and databases(DBMS). Sametime each team may be following its own processes. Standardizing and centralizing the data and the processes need migration of the existing.
- Define clearly if there is any change in the process and who all will be impacted by this change.
- Validate existing data for accuracy and consistency. Remove unwanted data.
- Establish mapping between old database tables and fields and migrate the data.
5. Validate with real-life data
The system must be completely tested before going to production. Hence thorough testing of the system is needed.
- Test all use-cases, features, and reports with real-life data.
- Verify communication processes between different roles and departments of the organization.
6. Training the end-users
Inadequate training may hinder the adoption of the system. Training with a proper feedback mechanisms also helps in validating and optimizing the implementation.
- Develop a well-defined training program, let professional trainers guide end-users.
- Let there be a feedback communication mechanism between
- end-users and trainers
- trainer and implementation team
- End users and implementation team
7. Taking it to the live production
Before making it live, test the whole system thoroughly. Have a backup plan in case of adversities.
- Choose the approach for taking it to live
- Complete deployment
- Phase wise deployment
- Use the existing system and new deployment parallelly
- Ready for a possible change in deployment date. Make sure you have people who can handle adversities.
- In case of system downtime, have an alert system to let all users know about it.
- Verify the performance and accuracy of the system again after taking it to live.
- Expect process change during initial days and have IT people who can support it.
8. Maintainance after ERP implementation
After going live, support will be needed. Performance tuning also may be needed based on end-user feedback. Always keep auditing system against defined performance expectations. If the system does not stand up to the expectation, tuning needs to be done.
- Support system issues and end-user issues.
- Keep on evaluating the key performance matrix. Optimize the process based on the evaluation.
The time required for implementing ERP systems across the organization is dependent on, size of the organization type of the business, and type of deployment.
It takes less time for small organizations, however, it may take 6 to 12 months for big enterprises. Cloud deployment may reduce total effort, cost, and time taken drastically.
Additional tips for successful ERP implementation
- While implementing keep prospects of the business too. Customizing the system later may take more effort than doing it at the beginning.
- Get a clear idea about the total cost of the project. don’t forget to consider training and future support costs. The vendor may charge an additional cost for additional features if you ask for it later.
- On-premises deployments usually cost more and even the maintenance cost is high. Keep your options open for open source ERP and Cloud ERP solutions too.
- Since the new system involves a learning curve for its end users, people continue to do how they were always been doing. Emphasis on change management is essential.
- don’t buy functionalities that are not needed for your business. It makes training difficult and increases the price.
Following the above steps will assure the success of your ERP implementation. It is not a one-time process, you will have to periodically follow the above process.
The good news is, the success rate of implementation is increasing in recent times. It is due to advancements in technology and increased expertise of ERP vendors.
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