Planning to implement a new enterprise resource planning (ERP) system? The important thing is to ensure a smooth transition. There are companies that rush the process, only to encounter problems along the way (just read about the Lisa computer that Apple made — that did not go anywhere since it was not well thought out). Some business owners find it difficult to manage all the moving pieces and focus on the bigger picture, resulting in the failure of the ERP project.
It’s one of the major reasons why 55 percent to 75 percent of all enterprise resource planning technology is unable to fulfill their objectives, according to Gartner. What they need to do instead is adopt practices based on successful enterprise-wide system implementations. These are listed below:
Maintain clear records
Once the project is successfully underway, you will be left with tons of documentation. All the major documents will have signatures from the key team members. Considering how many moving parts there are in a new ERP system, you should carefully maintain records of major conversations and decisions.
Keep the documents for technical design, functional design, agreed upon reports, agreed upon business processes, and more properly arranged. Make sure the members have signed off on all the designs. While such an approach may appear too formal, once the system goes live you’ll start to understand why this is important.
Get support from higher management
The implementation of enterprise resource planning in your business is a large-scale one. So, the failure or success of the process greatly depends upon the support of the upper management.
Unless you receive the green light from them, nobody is going to take this project seriously. They need to be vocally supportive of this system to prevent anyone from undermining your project. For this reason, you must have formal mechanisms in place that highlight this support visibly to every party involved in enterprise resource planning implementation.
Adopt a realistic outlook
Your ERP project might never attain the level of success YOU expected, but that doesn’t necessarily mean it wasn’t successful. Whenever a project exceeds the stipulated budget or requires more time, people start wondering whether the project has been successful or not.
The vital aspect is to be completely transparent regarding the time-frame as well as the costs for the project. You should never lowball costs or exaggerate how long it takes to complete the project just to gain some momentum on the project. This will affect your perception about the success of your enterprise resource planning project later on.
The trick is to ask your delivery partner for their top-end estimates, and then increase it by 20 percent for contingency. The timescale must also be increased proportionally. You also need to consider the project management expenses.
Never customize your system, only the processes
There have been many instances where a business implementing a new system seeks to customize it for meeting specific needs. However, this is not a prudent idea for the following reasons:
- Customizations tend to make the deployment process even more complicated. Plus, it becomes harder for the business to update the ERP system into the future at a later stage. That’s because the more they have, the more the total project costs will be — now and in the future.
- Customizing the system isn’t always the most practical choice. Spending valuable resources on tweaking a system so that it matches an inefficient or outdated business process really does not make a whole lot of sense.
If you wish to increase the chances of the enterprise resource planning process, the best course of action would be to review all the different business processes. This provides some easy “quick wins” even before you begin implementing the new system. Plus, the money you save on system customization will pay toward the time spent on understanding how exactly the business works.
Have a strong project plan and team in place
A lot of the success of your ERP project rides on how good your project charter or project plan is. Every single aspect of the project that requires attention must be included in the list along with the expected costs for the individual phases. The last part can be somewhat intimidating since you’ll be predicting all the expenses across all the phases of the project, which is likely to run several years.
That’s why each member of your team must understand and agree to all parts of the project plan. They must provide valuable suggestions and insights based on their area of expertise for the success of the project.
But no matter how efficient a plan is, you still need a fantastic team to pull it off. Now, the question is, what kind of project team does your business need for successful enterprise resource planning implementation? There are several factors that come into play here. For starters, each selected member of the team must have sufficient knowledge and experience. Also, they need to be team players and communicate easily with one another.
You might also need additional members, like a technical lead, a functional lead, a report writer, a data specialist, a project manager, integrator, and project coordinator. You want people who are there to win as a team and not people trying to seek individual attention.
Finally, as the success of such a large project rides on the individual contributions of each member, the team needs to function as one cohesive unit. There is no place for lone wolves on such projects.
Cloud-based or on-premises enterprise resource planning?
Both these choices have their share of pros and cons. To determine which is the right option for your firm, the first thing you must do is decide whether you want a short-term or long-term investment solution. Businesses that are simply “testing the waters” should pick cloud-based enterprise resource planning since they do not have to pay any sizeable costs upfront, which is not the case with on-premises software.
What’s more, you can also press the button to pay for monthly subscriptions. On the other hand, on-premises ERP solutions are the more cost-efficient choice if you wish to invest in something slightly more long-term. On-premise solutions enable you to exercise more control over the different security measures as you will be hosting the ERP onsite. Some businesses, however, have had success with a hybrid ERP solution.
Implementing enterprise resource planning and finding success with it can be difficult for businesses that have no prior experience on the subject. Thankfully, one can move in the right direction by following the steps mentioned above, putting your company on the road to the Promised Land.
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