As an organization grows and expands, so does its need for better and more advanced systems. At one point or another in every organization’s growth, an important change to a new Enterprise Resource Planning system is needed to streamline operations and improve efficiency.
Enterprise Resource Planning (ERP) software is a major proposition for any business organization. Besides the significant monetary investment and maintenance, there’re also costs with regards to dedicated resources and time. This is why, before initiating any ERP project in a company, it is critical to make sure that the whole organization knows and understands the strategy and reasons behind the move.
Note that nothing has a more significant and profound impact on the long-term success of an ERP system than the quality of the implementation. If it is done well, a business is more likely to enjoy a greater Return on Investment (ROI) in a lot less time. On the other hand, if the implementation is poorly planned and executed, a company will likely waste a lot of money and time without seeing any noticeable advantages.
What is the Implementation Phase for an ERP software?
In the implementation phase, companies make efforts to synchronize their current business process with the ERP software package. To meet the specific and unique needs of the business customization of the ERP software might be required to achieve optimal results. This phase also entails testing the ERP software and providing training to employees on the new system.
It is essential to test data, processes, and procedures before launching the ERP system to lower the risk of errors after system deployment.
Phases of ERP Software Implementation
Before getting to the ERP implementation stage, a business should already have its goals, milestones, and budget mapped out. Without these, it will be difficult to choose the right ERP system for your needs and preferences.
Choosing an ERP solution that meets all your specific business needs and requirements will enable you to have a smoother implementation and avoid issues later on in the process.
Phase 1 of an ERP Implementation: Planning
This is one of the most important phases. First, a business needs to plan out its ERP implementation steps and delegate these steps across their ERP implementation team.
Phase 2 of an ERP Implementation: Build a Dedicated Team
This project team should have employees from sales, accounting, customer service, purchasing, operations as well as senior management. Have the implementation team perform an in-depth analysis on which business processes must be improved or streamlined. Also collect copies of important documents, like batch tickets, invoices, and bill of lading for this analysis.
Coming up with suitable a project plan is a vital aspect of the planning phase. This is because it is going to serve as a guiding principle for the remaining phases of the project. A company should also clearly define the objectives before implementing the ERP solution.
Phase 3 of an ERP Implementation: Build a strong scope with the elements that have the most impact on your business.
Keep in mind that ERP systems are often massive, and the business will not be able to implement each and every function. Defining the scope of implementation is crucial.
Performing a timely gap analysis in ERP software implementation helps a company assess the direction in which it is headed. GAP analysis in ERP system implementation is important as it identifies and suggests the ways to bridge or close the gap between ‘As is’ and ‘To be’. Usually, a consultant will go to the company’s premises and perform a gap analysis. This is an analysis that determines the existing state of the business and its processes vs. what the optimal situation would be after the proper ERP software is put in place.
In most cases, the result of this phase will generate a very detailed report that will outline the structure of the organization, how many employees it has, what their departments are, and so on. Some customization points will likely be identified during this phase. Keep in mind that in the absence of adequate GAP analysis in ERP system implementation even the best solution won’t be able to provide the benefits it claims to offer.
The design phase is an important part of the implementation, and the focus is on creating a specific system configuration that will make the most of the system benefits and maximize the ROI received by the business. During the design phase of an ERP system implementation, the project team and implementation team will work together to come up with suitable configurations for the new system.
A company should make sure that there is a project team encompassing all areas of the business to make sure the system design captures what is actually needed. Inadequate representation during this phase is a common gotcha.
The next step is the system development phase. And it is one of the most important stages in the implementation cycle. During the development phase, the team has to prepare the complete system so that the system can go live. This implementation phase includes many activities, like completing all necessary customizations, developing user training manuals and importing all the data.
If the design phase is executed right, this should mostly mean configuration with little custom code. A company has to make sure that the project team has enough time for this work. This is because many ERP deployments have been squeezed by inadequate or poor staffing, and this means trouble later.
Companies should look to fine-tune the required built-in processes and features to deliver the desired outcome rather than writing code. If this stage of the implementation is handled carefully, it is possible to resolve most of the conflicts at the initial stages and move on.
Training and Testing
User testing is usually the closest thing to real-world tests before a company fully deploys the software. During this ERP implementation phase, specific users in an organization will run tests on the new ERP software in parallel with the old software to make sure that they achieve matching or better results. The implementation project team should ideally practice in a test database in order to confirm that all the information is accurate, up to date and working correctly.
It is advisable to run real-life scenarios when testing for data accuracy and completeness. Note that from the user’s point of view, testing is often the final quality control procedure performed in order to determine whether or not the ERP software is performing as expected. Testing phase allows the team to determine whether the functionalities of the system align with the pre-defined requirements for the specific project or not.
Training is equally important. If people do not know how to use the software, or they are afraid or reluctant to use it, it will likely fail. Keep in mind that poor training often leads to poor system adoption rates. Also, users have to be involved right from the initial phases of the ERP implementation to get the best results. Training involves the use of training videos and manuals as well as additional training from the software vendor.
Training is done according to particular functions, such as sales, finance, and marketing, etc. Depending on the request this can occur either on-site or offline.
Before flipping the switch, a company needs a go-live plan. The testing phase would have helped the company eliminate most of the issues, but in case any of them are critical to productivity, the business may have to delay deployment. In contrast, for minor issues, a company may choose to go live while taking an agile approach to problem-solving. Keep in mind that before going live, the team will load the final data and validate it.
Finally, when everything is complete, the project will go live. It is worth noting that the new ERP software will continue to run in parallel with the old one for the near future.
Although running both new and old systems in parallel is a smart idea, particularly in case issues or complications arise that were not discovered during testing, a company has to make sure there is a firm deadline to retire the old system and that everyone within the company is clear regarding when the changeover would run its course. Running parallel systems gives the business peace of mind and also helps confirm that no issues are present.
Maintenance and Support
Keep in mind that the project does not end when the ERP system goes live. A company should plan support and ongoing training for the foreseeable future so that all employees are comfortable using the new system. Follow up and support will help ensure that the first month-end close is successful.
Depending on the specific contract, the vendor may continue ongoing maintenance and support in order to make sure the software product keeps working well and gives the business the peace of mind it deserves.
Those are the key implementation phases, from project planning to deployment and support and maintenance. Follow these steps carefully to ensure successful ERP implementation and avoid common pitfalls.