ERP implementation is the process of examining current business practices, strategic planning, streamlining operating procedures, installing and testing software, cleaning and migrating data, managing changes, training users, running and maintaining support. It is a big step for any organization as it is not a one-time event but rather a continuous process.
Since ERP implementation is a large project with a far-reaching impact, it is important to follow best practices at every phase of the process to establish a smooth deployment and ensure that you get the most out of the system.
1. Have clear requirements
Before you decide to implement an ERP system, it is vital to set precise requirements, which are aligned with your business goals. These goals might include automating processes to save time and reduce costs, improving your ability to respond to customers, and enabling better analysis across the business.
It's important to think about exactly what you want to achieve and how each process can be improved because ERP implementation is an opportunity to introduce better processes, not just to automate existing inefficient processes. Once you have identified your business goals and requirements, you will find it easier to communicate with your ERP consulting partner.
2. Choose the right project team
One of the keys to ERP implementation success is a strong project team. This team should consist of subject matter experts from all departments of the organization who are in leadership positions, able to make business decisions for their department, and know their part of the business very well. The team’s responsibilities involve setting top-level goals, requirements, and key performance indicators (KPIs); performing day-to-day project management, ensuring that projects stay on time and within budget; and measuring results.
During implementation, the team must be able to resolve conflicts and mediate between different groups within the organization. It may also be necessary to make decisions about midstream changes to the ERP implementation strategy based on user feedback and input. That is why team members must be knowledgeable and highly respected within the organization.
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3. Identify your KPIs
After identifying the key requirements, it is possible to define specific key performance indicators (KPIs). These KPIs can represent targets to measure the success of your ERP implementation. For example, a construction manager might want to be able to improve their labor productivity, achieve their milestones on budget, and deliver their projects on time. Meanwhile, for a manufacturer, KPIs might include improved cycle time, accurate demand forecasts, reduced downtime, and higher inventory turnover.
4. Build a mutual understanding of the goals
To achieve a successful project, it is important for everyone in the organization, from the CEO to the end-user, to be in sync. Everyone needs a clear understanding of why the company wants to implement an ERP system, what the system will do, the benefits to be gained, and what to expect during the ERP implementation process.
Clear communication and a collaborative approach are essential to building a mutual understanding. In addition, since the ERP implementation can also affect business partners, supply chain members, and customers, it is good practice to keep them informed during the project and help them understand how changes may affect them.
5. Migrate your data before the ERP implementation starts
Migrating data to an ERP system is an important step in implementation and therefore requires careful preparation and planning. There is a risk of data loss or corruption during the migration process, especially if you combine and standardize data from different applications.
To minimize the risk, your data should be reviewed and edited for accuracy and uniformity before migration begins. Any out-of-date information should also be removed. When the data has been updated and verified, an application analyst migrates the data to the new system. This step involves setting up the new database, mapping the database fields between the old and new systems, and transferring the data.
You also need to consider whether to transfer data manually or use special tools to automate the process. Each can offer advantages. Manually entering information into the new system provides an opportunity to clean up obsolete data, such as suppliers going out of business and customers who haven't ordered for years. Automation, on the other hand, can make the process faster and less tedious. Whichever method you use, it is important to validate the data after migration to ensure that it is properly transferred to the new system.
6. Create a change management plan
Change management is critical to the success of ERP implementation. An effective change management plan will help your employees adapt to the new ERP system more quickly, with a higher success rate. Employees need to be introduced to new job processes and roles over some time so that they can accept and internalize these developments.
For effective change management, companies must set the right expectations early in the implementation process. Ignoring this aspect of implementation or delaying it until the end of the project can result in organizational resistance to the new system, even to the point of operational risk.
7. Provide adequate training
It is unrealistic to expect that employees will soon become proficient with the new ERP system. You can’t have a successful ERP implementation without adequate key user training, user acceptance testing, and hands-on implementation support. Therefore, there should be a solid training program for employees, based on their role—for example, project team training, IT team training, business user training, etc.
There's no such thing as too much training, so budget more than you think you'll need, and make sure training is a line item in the budget for years to come. Ensure that new employees and core teams receive training and that the core team stays abreast of new additions to the software.
In addition to the seven tips above, choosing the right ERP software is also a factor to consider. For example, many organizations, especially small and medium-sized enterprises, opt for cloud-based ERP software, which can be easier and faster to deploy than on-premises and has lower costs, as it requires no investment in hardware.
Most importantly, before selecting a new ERP solution, the organization must ensure that the ERP consulting partner can match the processes and requirements of the organization with the chosen ERP solution. Whichever partner you choose, applying best practices throughout the process, from requirements definition to support, can help to ensure a successful implementation that delivers the most value to your business.