Tips to Successfully Implement an ERP System
Deploying an ERP solution for your business is no easy walk in the park. Implementing it is an expensive proposition that can cost millions of dollars (with the software licenses, consulting fees, integration costs, training and upgrades factored in) and take months, even years, to fully deploy.
It should be dealt in a slow, meticulous manner and requires a concrete integration plan. A step-by-step approach is necessary when it comes to deploying a system such as ERP. So what steps can you take when choosing or deploying an ERP solution to decrease the likelihood of failure? Here are a few suggestions from ERP experts, systems integrators and project managers who have successfully implemented an ERP software system.
- Selecting the right ERP Solution
Choose the appropriate ERP solution that best suits your business needs and industry requirements. It’s a major investment of money and time. So it’s best if you get it right the first time. Define your company’s core needs. A well-defined list of requirements will result in a more seamless implementation process and an ERP system with lower total cost of ownership. Make sure that your choice is not solely upon price or vendor alone.
- Take a detailed look at cost of ownership
You might choose an ERP solution owing to its low cost when compared to other solutions. It might sound as a good bargain initially. However, the maintenance of this system could be quite expensive. Don’t forget about hardware, consulting dollars to implement, internal resources to maintain the software and future upgrade costs that come with it. Companies have doubled the size of their IT departments in order to maintain an ERP solution.
- Choose the right vendor
There are umpteen numbers of vendors in the market. Every vendor offers almost the same solutions with different prices. Before selecting a vendor, do your homework and see who can get the job done to your specifications. Be sure they’re prepared to give specific estimates regarding the cost of ownership and the return on investment. Have a detailed discussion with respect to the budget and project completion time and ask for references from other organizations that have hired them. Also be certain they have the proper experience serving your specific industry.
- Adequate support from top management
Top management involvement and backing in prioritizing the ERP project, setting direction, allocating resources and facilitating communication can be the single most important success factor in any implementation process.
- Create a roadmap
Roadmaps help manage large, complex technology and business process transformations in a series of well-defined phases, and help take control of cost planning. A roadmap not only ensures a smooth process, but it shows financial stakeholders when the implementation will start, the cost and when they can expect to start seeing benefits.Putting together a detailed roadmap that outlines what steps the business needs to take before transitioning to the new system will help pinpoint potential ramifications and identify ways in which to mitigate those speedbumps from the get go.
- Establish a cross-functional team to oversee implementation
An interdepartmental implementation team could be established to help smooth the implementation process. This team should be made up of individuals from different departments such as accounting, operations, information technology, payroll, human resources, purchasing, service and inventory. The team needs decision-making authority and a clear escalation path when facing decisions beyond their authority.
- Deploy the ERP system one module at a time
Implementing module by module will help you sort out all issues that arise right after implementation. Once you have perfected the integration of a particular module, you can go for implementing the next one. Some companies go for a Big Bang Approach where all modules come online immediately. This could cause a lot of issues and cost you a lot of time and money.
Successful implementation of an ERP system isn’t enough, you need to train your employees to use it correctly. It is the most critical element of an ERP rollout. Create a full plan to train and onboard stakeholders. Ensuring implementation resources remain assigned for the first six weeks is essential to supporting end-users, managing change requests and addressing points of failure. Appreciable support is the most important factor for ensuring successful adoption of a new ERP system.