10 Steps to follow Successful ERP Implementation
The ERP solution has evolved from a simple business management tool to an integral part of any business. It is now a key component of the business and helps in accelerating its overall growth. Unwarranted chaos is caused by the complexity and many activities of businesses that cross all time zones and borders. An ERP solution can help to transform chaos into a systematic design that delivers positive results for the company. It gives the company a competitive edge by streamlining and accelerating the business process.
It is often said that “the first right move leads to half the war won”. Therefore, it is essential to implement ERP correctly for optimal utilization. In this article, We have listed below the “10 Must-Follow steps” to ensure a successful implementation of ERP.
1. Identify the problem(s) / Determine the objective(s).
ERP can provide a solution to many problems faced by companies. It is important to determine the true purpose of ERP implementation. It is not about whether ERP should be implemented, but rather what ERP should be used for. To understand the need for software intervention, it is important to analyze the Key Performance Indicators (KPI). These objectives must be analyzed not only concerning the current but also in light of future projections that are included in the request list. This allows businesses to account for scalability as well as accommodate changes in future business/industry. It is crucial to determine the exact problem or necessity that motivated the ERP.
2. Define scope/team
Many objectives can be achieved. These could include bringing transparency to operations, financial control, supporting organic growth, supporting acquisitions, or supporting common processes. Panorama study shows that 61.1% of ERP implementations take more time than anticipated and that 74.1% of ERP projects exceed their budget. Unclarity in the ERP requirements is the main reason for delays and overbudgeting. It is important to evaluate the ERP features in light of the company’s needs. The ERP demand list, which is based on the core necessity and budget, should be created to ensure smooth implementation.
3. Evaluate and brainstorm the options
According to Capterra, 33% of ERP buyers didn’t demo the product before purchasing it. 22% of respondents said they purchased the first system they saw. These are alarming statistics for both ERP vendors and ERP users. The optimal use of ERP software is still a goal. The company’s management must spend time evaluating all options to make ERP software work for them.
According to the 2015 ERP Report, 93% of companies had customized their ERP software in some way to suit their needs. As customization can increase complexity, it could lead to an increase in ERP system failures. Because the ERP system is already configured and ready to go, customization may not be necessary. It is important to evaluate ERP options. Options should be evaluated against both current and future needs. Customers are currently deciding on cloud ERP solutions or SaaS ERP as their preferred option. These options offer flexibility and scope to meet future needs. To bring the best system to the company, the company must work with ERP consultants and vendors.
4. Data migration
The next step, and the most important, is data migration. This allows for smooth transitions and future use of the ERP solution. It can be difficult to implement an ERP, especially for companies that are just starting with the program. It is important to identify the data that are required for a successful transition to common software problems. Although most software can be used to input data, it is not possible to shift all of the data. The software can only accept the most critical data. However, it is important to transfer only the essential data. It is also important to ensure that data is available for retrieval from the software when needed.
The preparation of the company for ERP implementation is the most important step in any ERP implementation. It plays an integral role in all aspects of the process, whether it succeeds or fails. The infrastructure required is put in place after a thorough brainstorming session between the vendor’s management and the vendor. Mint Jutras found that 23% of respondents are not able to grow their businesses as fast as they want. This is since they don’t have the right tools in their ERP system. The software infrastructure must be scalable and allow for updates as needed. This requirement should not be restricted.
ERP software is developed after extensive research and under the industry’s needs. Sometimes the customization is not necessary. The implementation of an ERP solution can be a major investment decision for a company. It requires a lot of resources. Therefore, the management must keep track of the ERP software and the maintenance schedule. Management must evaluate the system’s value against the company’s desired value during pilot testing. It is important to review the system used by the company since its creation. These questions must be answered before customization. There is always the possibility that the system may not be fully understood and positive changes made.
7. Management of change
Any company’s employees are used to performing the same activities through a set process every day. Changes may be difficult to accept, especially if it is an influential tool like ERP. This is where Change Management is crucial. ERP isn’t a fixed asset, like a computer that is bought and installed in the company’s office. It is a system that can change the working environment and work style and affects all operations.
Managers should engage their employees and train them to ask critical questions such as “Why is ERP important for my organization?” OR What would an ERP do to increase productivity? OR How can an ERP automate back-office functions and save time? Employees will be more open to change if there are a series of brainstorming sessions, regular updates on developments, and the resolution of queries. Communication with employees positively will help make the transition easier. An ERP system can only deliver optimal results if everyone accepts it. It is important to build employee confidence and consensus to make the transition smooth.
8. Technology & Knowledge Transfer
21% of ERP implementations fail to deliver substantial business benefits. There are many reasons for this, including improper customization of non-optimal software usage due to ill-trained personnel feeding data/operating the solution. The most important aspect of ERP software implementation is training. This ensures that there are fewer problems and greater success, particularly when ERP software is being implemented in a new company. Management must ensure that the company has proper vendor details and technical know-how for its IT support staff. The success of the project depends on the proper use and transfer of knowledge. The consultant should be included in the project to help ensure a smooth operation. It will also reduce the time between the problem and solution.
9. Management of projects and Testing
After evaluating all options and selecting the most suitable, then training employees, the true aspect of project implementation is the actual implementation. Panorama Research found that 40% of ERP implementations result in major operational disruptions following go-live. Proper implementation is therefore essential. Because there are many time gaps between selection, evaluation, and implementation, rigidity could backfire. . You should also include lateral improvisations. The core objective must not be altered or diluted simultaneously. The testing phase is crucial in the implementation process. It includes user and system acceptance testing.
10. Final touch (go live), & ongoing support
After the ERP solution has been properly tested and implemented, it’s time to go live. As a safety measure, it is recommended to perform an additional functionality test. ERP solutions are not a one-off event. They are a continuous process. The company must keep an eye on it to prevent any systemic glitches or aberrations that could impact the ERP software’s functionality.
After implementation is complete, vendors must update their software regularly. As part of the ongoing support, maintenance must be performed periodically to ensure that your solution is fully functional.