Well, with ERPs it’s not just about selecting and going live with a software service as others. This is highly crucial as your ERP implementation phase decides what benefits you are going to derive from it.
When it comes to ERP, the implementation cycle is a long process and it can take ample time and participation of you and your service provider. The ERP implementation process begins from gathering your business’ requirements for ERP, choosing the right software, customization and system deploying cycle, data migration, pieces of training, going live, and managing the ERP support.
In This Article:
- ERP implementation process overview
- ERP implementation phases
- When should ERP be implemented?
- Why do you need an ERP implementation?
- Various trends in ERP deployment
- How long does it take to implement ERP system?
ERP implementations can be complex and challenging undertakings, even under the best of circumstances. The process includes a number of steps that must be performed in a specific order and can take anywhere from 6 to 18+ months to complete. Full ERP implementations will require organizational change and user adoption, detailed planning, accurate requirements gathering and preparation, proper planning for system customization, data migration, data integration across disparate systems, end-user training for new processes, and effective project management.
Implementing a new ERP system successfully is complex and time-consuming.
Let’s explore the steps in the implementation process and examine what you need to know about managing change.
Importance of a well-planned ERP Implementation Process
According to Global consultancy McKinsey, more than 70% of all digital transformations fail. A recent study over several ERP implementations in the past 10 years reveals that around 60% of ERP implementations took longer than expected and around 75% of ERP projects exceeded the allocated budget.
The main reasons behind these failures were found to be revolving around the business’s interest during the implementation process of ERP. Unclear project requirements with core team members not caring to give enough time for the project and the core team consisting of the wrong people are some major issues in this regard.
Well, all such causes can be nullified if we take our ERP implementation process as a priority during the project tenure. The leadership participation to help set up the correct requirements and get the right system becomes important when it comes to the Enterprise Resource Planning implementation process.
Phases of ERP Implementation
If we have thought of ERP implementation for our business, we are close to achieving the benefits of streamlining our business process with automation. But to get the best out of our investment, the ERP implementation process should be as efficient as possible at all stages. An error-proof ERP implementation life cycle with effective participation and a clear approach can do wonders.
Let’s see what these phases are?
1. The Discovery Phase
Discovering the needs of ERP implementation is the first and foremost step towards your process automation planning. Before going through the multiple phases of ERP implementation, the two most common yet important aspects are ‘When’ and ‘Why’ ERP?
1.1 When ERP should be Implemented?
There may be a global buzz towards business process automation, tougher competition, and some process optimization requirements that might bring up the thought of ERP implementation but how we’ll come to know when is the best time for us to automate our business processes?
Well, multiple signs can help us decide this. There may be multiple software on which different departments are running, there may be less transparency and sync between processes and require a manual tally mechanism to match up with data from different departments, data becoming unmanageable, scaling up of business, etc. and all of these shouts for the requirement of a centralized ERP software needs.
1.2 Why do we need an ERP Implementation?
Keeping track of your business processes manually is time-consuming and prone to errors. With a cloud ERP implementation, you can eliminate repetitive tasks and make better decisions based on the real-time analysis of the most recent data. A cloud-based system offers the enhanced ability to streamline business processes while keeping in tab with production demands. A digital transformation is necessary to change your business processes, keep up with the latest technology, and get ahead of the competition.
2. The Project Planning Phase
A well-planned project is a must for ERP implementation. From the appointment of an efficient project team to examine all the current workflows and define goals for ERP service, to budget allocation at first place, all becomes mandatory in the project planning phase for ERP.
The project team shall be appointed with the necessary leadership to carry on with the ERP implementation process journey. Such a team generally includes an executive for budget allocation, project managers, business process experts, or the concerned department representatives along with IT leaders. From preparing the project plan, important timelines, resource allocation, and daily management, the project team shall be.
The business process experts (can be leaders from concerned departments) in the project teams are mostly into defining requirements for ERPs along with possible improvements in the current workflow with all possibilities of growth and scalability in the future.
The executives may help decide the budget allocation based on the requirements set by the process leadership. The team shall collaboratively document all the specifications and KPIs based on which they can monitor the ERP service’s benefits and add-ons for the business.
3. The Service Selection & Evaluation Phase
The requirement analysis will provide you with answers for why an ERP system is required and for what goals. Along with this, the requirement analysis will also speak up for the type of service that is required in your case. Based on the goals and timelines, there can be two categories in 2022 that you can choose from, ie having an on-premise system or subscribing to a Cloud-based ERP service.
If you are preferring to go for the robust Cloud-based ERP services, the process will deviate accordingly and the next step would possibly be the package selection.
The twenty-twenties is a decade of a high trend for cloud-based ERP solutions that are easily customizable, fastest to implement with high flexibility and scalability as the super-strengths. There are multiple service providers across the globe with all needs brought on a single centralized system for complete resource planning across all departments. But, choosing the best ERP software for your business is highly dependent on your business process.
Once you are done with the service selection, the next thing is the package selection that is desired. Service providers have ERP solutions for all departments, but your requirements may be more or less. The selection of the right packages may help you to get the SaaS as required along with the best subscription prices.
It’s a crucial evaluation phase in the ERP implementation life cycle. In this phase, the Gap analysis is done which speaks up for the missing sync between the requirements and the ERP offerings. This gap analysis shall be taken into account with the leadership to ensure you get the ERP to meet all the functional requirements for your business.
Service agreements with ERP vendors can be the final point to discuss here. Your package selection with the number of users may give you a clear idea regarding the subscription priced regularly and can help build your contract with the service provider.
4. The Customization and Testing Phase
After the software selection and evaluation phase, here starts the job of your cloud ERP solutions provider. This phase involves work mainly on the service vendor’s end yet it may involve multiple meetings and discussions for process improvements and re-designing of customized modules. Complete configuration with safe Data Migration is the critical process involved here.
Testing can go parallel with the development phase, as the team can monitor and test-verify specific modules that are ready. Various re-testing and amendments can be suggested where required. The better you cooperate with your ERP vendor in this phase; the best results can be brought up with the project.
Meanwhile, the team is supposed to work on necessary documentation and training materials for their end-users. The project team is not just responsible for carefully listening to the end user’s issues and concerns, but needs to also help them understand the reason, goals, and benefits of ERP implementation. ERP implementation is a complex process and hence, you will have to look for well-organized ways of training users, which is only possible with two-way communication with them.
5. The Deployment Phase (Go-Live)
With the final testing of the ERP modules and training of end-users, the ‘day’ has arrived, when you are finally ready for the actual implementation process. Still, we need to keep all the rush aside and be ready for the downtime and other issues on our way. We shall be more patient at this phase and be highly resistant to the changes.
The Various Trends in ERP Deployment
Organizations adopt different approaches when it comes to going live with a new set of software. 3 key common approaches that can be chosen for ERP implementation include:
1. The big bang approach: A highly popular approach among various big businesses. With the big-bang approach, the software is installed in one-go on a go-live date for all teams of the organization including sales, finance, operations, marketing, etc. Thus, requires a lot of planning, as a single mistake has the potential of affecting all business functions.
2. The phased approach: As the name suggests, in this approach organizations plan phased implementation as per the department, location, manufacturing unit, etc. The risk is lower as it will not have a huge impact on the entire business at a time and things can be quickly tackled in case of faults.
3. The parallel approach: In this approach, teams integrate a new parallel system, while the older one is already in function. This again minimizes risks involved in implementation, as you already have the old system running parallel to back switch to. However, running two systems at a time comes with its own set of technical glitches including issues like data synchronization as well as issues with the end-users.
How long does it take to implement an ERP System?
ERP implementations take six months? No way!
A lot of companies in the late-90’s, 2000’s and early-2010’s thought they would get a company off the ground just by picking up an ERP system from their local reseller and be running smoothly three months after the installation.
Those companies were wrong. Agile, ever-changing business models require agile, ever-changing business software.
With today’s modern Cloud ERP Software technology companies can expect quicker implementations with better integration between their current systems and their new business software.
ERP implementation process is a major project that can be an exciting and great learning experience for the whole project team. The inside-out process journey and optimization cycles can boost up the process knowledge along with the real value ie automation. The implementation process experiences shared by various industry leaders show how they have gone through the unnoticed finer points of their business process became added a great experience to their profiles.
Remember, it’s always teamwork when it comes to optimization and automation. Your ERP implementation cycle if you go well, can thrive the business process and help the business touch skies with its real-time cost-cutting and saving mechanism.