You’ve probably heard horror stories about system implementations – especially ERP implementation. Selecting the right system is no guarantee of success. A well-designed ERP implementation plan – combined with discipline, engagement, and realism—can dramatically improve your odds.
Here’s what to consider:
1. Business Case Foundation
Don’t forget what you should have known during the system selection process. You should have already identified your Critical Success Factors (CSFs) – those things you must do well in order for the ERP implementation to succeed. As well, you should also have defined measurements of success.
Before starting any project, you should know how to measure success. A good ERP implementation plan should include clear, quantifiable targets. These metrics serve as checkpoints, motivators for staff, and guardrails to keep the project aligned with its goals. Even if you have not done it for system selection, it’s not too late.
2. Business Process Improvement
Don’t assume your current business process is the best way to get the job done. Even worse, don’t insist on modifying the new system to do exactly what was done before.
First, start with a real understanding of your existing business process. Roll up your sleeves and talk to the people who do the work. Ask them to tell you how much time is spent on activities. It may not seem serious if 1 person wastes 15 minutes per day – but what does it cost if there are 10 people doing the same thing throughout the year? Assuming a rate of $25/hour and 1,800 hours or work per year, that little problem has cost the company $112,500 for the year. A thoughtful ERP implementation plan starts by eliminating inefficiencies—not encoding them into a new system. See our Business Process Review services here
3. Project Management
ERP implementation success depends heavily on effective project management. Project management includes management of scope, budget and timing.
Rather than using the school of hard knocks, you should consider working with a structured methodology such as published by the PMI (Project Management Institute). A good project manager has support of upper management, and can be tough. If the project manager wants to please everyone, he/she is not the right person.
4. Change Management
Change management is often underestimated in ERP implementation. You would think that everyone will be onside. Employees learn new skills and they become more marketable and valuable. They will be able to do less clerical work in their day-to-day jobs and will be able to make a contribution to the success of their employer.
But beware. Your employees may be threatened if they think their jobs are at stake or they will lose power as a result of a new system. They may also be concerned about the time it will take to implement the system. In addition, large organizations often have multiple profit or cost centres that need to adapt to standardization but are not ready to make these changes as they are viewed detrimental to their profit or cost centre.
Sometimes implementations are based on adapting so called “best practice.” Best practice could lead to huge changes that are not understood or expected throughout the organization. So it’s not enough to have great ERP software or a great ERP implementation partner. You also need your own internal people ready for change. An ERP implementation plan should treat change management as a dedicated workstream—with stakeholder analysis, communications, training, and support built in from day one.
5. Internal Champion in ERP Implementation
An internal champion is essential to a successful ERP implementation and must be allocated to the project. Even the most difficult projects can become successful when you have an internal champion who is ready to do whatever it takes to get the job done. It is best to assign the internal champion at the beginning of the ERP selection project to ensure their commitment and agreement with the system selected.
Without someone driving the ERP implementation from the inside, even the best external support won’t be enough.
6. Employee Involvement
Employee involvement is crucial in any ERP implementation. Without it, you could risk missing critical business process that only they know about. And just as important is the psychological component. People are often threatened by change. By getting them involved, they are more likely to be supportive. Include them in workshops, prototyping, and testing. Your ERP implementation plan should incorporate their insights early and often.
7. Best People
You want your best people involved in the ERP implementation. They have the confidence of their colleagues, know the business well, and usually have the right attitude. An ERP implementation takes time – more than most expect. Don’t make the mistake of assigning them and then asking them to continue their day jobs. Reduce their regular workload or backfill their positions.
8. Risk Management
Every ERP implementation plan needs a proactive approach to risk. Seek out potential risks, their impact, and their likelihood of occurring.
Encourage all interested parties to develop strategies to mitigate the risks. Every organization has at least 1 naysayer, who can cause a lot of problems, but who is also very knowledgeable. The naysayers must be included in the risk management process. By getting their input early, you can avoid problems and you effectively limit their negativity.
9. Communicate
Frequent, honest communication is critical in any ERP implementation. Don’t keep people in the dark. Share updates formally and informally. Weekly bulletins, sprint reviews, steering committee updates—whatever fits your culture. But do it consistently.
10. Train the Trainer
A train-the-trainer model works well in ERP implementation. It cut training costs, and force employees to know the system. The best way to learn a subject is to teach it. When employees are responsible for teaching others, they learn the system in a more meaningful way.
11. Extensive Prototyping
ERP implementation should include multiple rounds of prototyping. There are many options in the setup of a new system including setup options, conversion, integration, and customization. An iterative process is required until the prototype is completed. It may take a few times before you get it right.
Take a small, representative sample of transactions through the system including reports and controls. Run them through the system—start to finish. Review reports, controls, and exceptions. Repeat until the prototype works reliably. Don’t go live before everyone is ready.
12. Beware of Customizations
Customizations can derail ERP implementation. It slows down the system implementation and the costs soar and complicate future upgrades when you want to upgrade to the newest release. This is not to say that some customizations are warranted and have a compelling business case.
13. Phased in Approach
There is also what is called the big bang theory, when you do it all at once. I think it got its name because everyone shot each other. Most small and mid-sized businesses especially don’t have the manpower to do it all at once. A phased ERP implementation – by location, module, or department – is safer and more manageable.
14. Post System Implementation Review
Once the ERP system is live, the work isn’t over.
Your ERP implementation plan should include a post-implementation review. Assess what went right, what didn’t, and what still needs to be addressed. There’s always room for improvement – and opportunities to learn before the next phase.