How to Really Prepare for Your ERP Implementation
When it comes to implementing a new ERP system into an organization, preparation is key. It’s important to take all necessary steps in order to ensure successful deployment of your new software. In this blog series, we will explore three essential topics that will help you build out a strategic plan to really prepare for an ERP implementation.
Part 1: Understand the problem and why some ERP projects fail
Analyst firm Gartner estimates that 55% to 75% of all ERP projects fail to meet their objectives. Fortunately, while failure is common, it is not unavoidable. One way to improve the outcome of your implementation is to learn from other companies’ failure to understand the problematic and pitfalls in ERP implementations, and mitigate these risks by developing strategies to avoid them. While there are many reasons for the various failures, there are several common pitfalls to avoid.
Executive support and limited engagement from your business
ERP implementations are complicated, often stressful for an organization, and take a lot of time and effort with some employees often doing double duties. Requirements need to be identified, processes mapped, data setup or migrated, scenarios or story boards defined, tested, verified and readied for production usage. The implementation team needs time, resources and decision making authority to adequately handle issues, tasks and decisions for implementing the new ERP system. In the same way, the company leaders or owners need to be fully supportive of the project and need to be heavily involved with each step of the implementation. Without the commitment from the executives, no one else in the organization will be committed either. Ultimately, management is the key to getting all other employees on board since they are likely the ones who decided to purchase the ERP software in the first place.
No clear destination, unfocused project scope or poor expectation management
Once an organization makes the decision to implement a new ERP system, one of the first steps are to define goal, scope and objectives, and to have a clear definition of what constitutes success. Without it, the end point becomes a moving target. The lack of a clear definition of the goals and the objective often leads to jumbled up implementation strategies. Projects without clear communication about the desired outcome of the project and the problems being solved often are facing challenges in controlling the scope of the project, leading to significant time and budget overrun.
The implementation strategy should be in aligned with the goals and objectives of the organization. A good strategy should factor important business processes, financial benefits and deadlines up front and making certain stakeholders agree how to address them.
Under-estimating resources required, part time resources or project management
A common blunder for some organizations is with the projected needed resources and these organizations often downplay the required resources for the ERP implementation. It is critical to have a solid understanding of the internal and external resources needed to complete the project. This goes along with unrealistic timeline expectations. Typically ERP implementation are scoped and budgeted for fairly optional circumstances, but statistics show that the average implementation usually takes longer than anticipated, about 14 months for a small to mid-sized company. Being realistic upfront with the time estimates may avoid delays or extra costs, resources, and a rushed implementation.
A person experienced in project management makes a lot of difference, but in the first place the project manager should be internal and needs to be an active leader pushing for accountability, transparency, and decisiveness. When choosing a project lead, choose one who will understand the pain of the users. The manager should have the most to gain or lose with the successful or unsuccessful implementation.
When schedules get tight and project resources are drowning in work, then often corners are being cut. Reducing the number or depth of test cycles may lead to undiscovered or undocumented features, which then often needs to be dealt with during or shortly after the go-live. Don’t fall into this trap either. The test cycles should be your primary means to assess the readiness of the system’s and team’s ability to execute the business processes required to support your business using the new ERP system and other supporting systems. In addition the last test cycle should be verification that all operating data and procedures are in place, and all business requirements can be met by the utilizing those data and procedures. It also should serve as the implementation team’s acceptance test that verifies the system meets requirements and is ready for production usage.
Not enough user training
End-user training is often another activity to be cut short, if timelines and budgets get problematic. Never fall into such traps. End-user training deserves a high priority right from the beginning of the ERP implementation, and is essential to your implementation success and improved business performance. Proper and suitable training of employees or end-users can determine the success of the Enterprise Resource Planning (ERP) implementation in your organization, while no training or improper end-user training can cause serious damages to your organizations. There are numerous case studies that poor training on the ERP software affected the profits of these companies, leading to productivity issues, including preventing fulfilling or completing customer orders in a timely manner, and ultimately leading to a significant drop in profits. In addition adequate training encourages the employees to be fully engaged in the transition, embracing rather than resisting change.
There are several strategies and training options to help ease the process whether it be by training all of your employees or by training a few of your employees and then having them train the rest.
Take a look at part 2 of this blog series, The Discovery Phase: Getting Your Ducks in a Row for an ERP Implementation, where we take on the vital first phase of any successful software project.