We’ve all heard the scary stories of implementations gone wrong. There are many statistics about the large percentage of ERP implementations that fail, but there are also many success stories. So why do some implementations go wrong, and how can you ensure that you achieve a positive outcome?
Select the Right Project Team and Set Them Up for Success
A qualified project team is a significant factor in successful ERP selections/implementations. These are the people responsible for researching and recommending the software and then helping with its implementation. The other key component in successful implementations is management’s full and unwavering support. They must have the time and resources needed to thoroughly accomplish all tasks in the project.
Choose highly qualified staff
ERP Selection and Implementation will the MOST strategic undertaking that your organization will execute in the 2-5 years. Your best and brightest employees must be on the project team – someone from each key area of the organization who has a strong understanding of that department’s operations. Leadership must view the project, which can take five months or more, as a worthwhile and strategic commitment that will significantly benefit the company. Staff should feel positive about the new system, which is essential to the project’s success. It’s also vital that the project team has the respect of staff members across the organization to achieve the desired results.
The project team structure
The project team is made up of three entities:
- Steering Committee – Senior executives responsible for ensuring the project is completed successfully, and that the company’s goals align with the implementation.
- Project Sponsor – On the Steering Committee, the Project Sponsor is the direct liaison with the Project Manager. The Project Sponsor works directly with the Project Manager on an ‘as required’ basis to ensure that obstacles to project success are mitigated before involving the Steering Committee.
- Project Management – Responsible for managing tasks, deliverables, risks, and changes needed to keep the project on budget and on time.
- Core Team – Staff who will handle changes to processes, test the ERP system, and teach users how to use the ERP system.
Skills the project team needs:
- Functional departmental expertise
- Cross-functional business process knowledge
- An understanding of Fundamental ERP concepts
- Computing, documentation, and communication skills
- Adaptability to change
If the project team is unfamiliar with what ERP selection and implementation entail, they must become well-informed about what’s involved before the project starts. It is a complex process, and it is easy to make costly missteps if unprepared.
Project team time commitment
The staff members on the team will need at least 50% of their time dedicated to this project, but a full-time commitment, where possible, is ideal. Project members may need their work delegated to other staff willing and able to take on the additional tasks, or the company can hire temporary staff to assist with the workload. In larger implementations, the employees on the team should not be expected to handle their regular workload in addition to the project. Not only would that be unfair, but it would create resentment and prohibit a successful implementation.
Establish Requirements and Define KPIs
With help from leadership, the project team will need to establish the requirements that directly correlate to the business goals for the ERP implementation. Those goals are important to remember throughout the project to ensure the software and the selected vendor achieve them. As a result of the team’s research, some goals may need to be realigned if they are unattainable. To keep it on track, the project team must identify Key Performance Indicators (KPIs) that can measure the project’s duration, budget, and achievements. These KPIs will ultimately measure the success of the project and its objectives.
With an ERP implementation comes change. People are naturally averse to change. Asking stakeholders who will use the system for their input will help them feel involved and more enthusiastic about the implementation and any changes it will bring. It’s essential to consider their input, as their feedback may uncover concerns that hadn’t been previously considered. It may reveal that adjustments are needed to the ERP strategy.
Collaboration and Communication
As with any project, ERP selection and implementation need a high level of collaboration and communication. The steering committee should meet regularly, monthly, or quarterly, with key project team members, and once the software is selected, with essential staff from your implementation partner. This is the opportunity to ensure everyone is on the same page and to address any key concerns. You’ll also want to communicate with your vendors, business partners, external stakeholders, and customers about changing to an ERP system and the advantages it will provide for both your company and theirs.
Data migration is taking the needed data from any systems being replaced and moving it to the new system. This is essential, as you don’t want to lose or have corrupt data, so it’s critical to be well-prepared for this portion of the project. It is critical that your people clean and scrub your data before uploading it into the new system. While your implementation partner will review your data integrity, only your people understand the data accuracy/quality. Your vendor will need to know the reports that are essential to your business so they can be sure that you’ll be able to continue to retrieve the required analytics. It is highly recommended that you address the departmental critical reports earlier in the implementation cycle. Towards the end of the project, everyone is hectically busy with end-user acceptance testing, training, cutover, etc.– key reports, at this time, get short-changed. Do it early.
Data can be transferred through an automated process or manually, and your vendor, IT staff, and project team can work together to determine the best method to migrate your data. It is critical to ensure the data is migrated correctly, as this is significant to your implementation success. If your data gets corrupted by not migrating it correctly, future transactions and reports will be inaccurate. Make sure your data is carefully added to the new system to avoid the frustration of having to remove the data and start again.
Each business process in every department should be examined to see if the ERP software can accommodate it. Below are three steps in the testing process.
- Conference Room Pilot – define each process and write instructions to test them methodically.
- Departmental Pilot – retest each process and test any others not recognized initially. Then create stress tests to ensure the system can support the data and transaction volumes.
- Integrated Pilot – all transactions should be tried as they would be in real life with cross-functional integrated testing. They should flow smoothly between departments, and users should feel confident that their processes work effectively.
To have a successful ERP implementation, you must dedicate the necessary resources to the project and allow the time needed. The most crucial aspect of your project is choosing a team who can effectively select and implement the ERP system. They are the ones who will be responsible for carrying out each of the steps involved in the ERP project, so choose them wisely.