Growing pains are hard. An ERP implementation involves scores of details, extensive planning, and most importantly, management commitment. Add that to the time and funding needed and you get a thunderstorm of possible failure points to navigate.
The essence of an ERP (Enterprise Resource Planning) system is that your business processes will be performed within separate modules that are all connected to a single centralized database. Selecting the right modules and vendor, preparing your workforce for the implementation process and building a solid project plan are essential.
An ERP will help you manage with dashboards and zero in on data anomalies, recouping precious time that can be lost in layers of spreadsheets. If you are ready to be relieved of inefficient work flows and wasted time on solvable supply chain issues, now is precisely the time to start planning for an ERP.
If you’ve already selected your ERP system and are ready to begin implementation, check out “Your ERP Implementation Plan: Lead the Way to a Successful Launch“ for additional information.
Is failure a foregone conclusion?
Going full-force into an ERP implementation project without proper due diligence and planning isn’t only naive, it’s costly. A quick web search will easily tell you that even top companies experience ERP implementation failures. Target, Hershey’s and Nike have each had major setbacks that they blame on their ERPs. CIO.com can fill you in on the details if you’ve got the stomach for it. Sadly, McKinsey Digital says that an unbelievable two-thirds of ERP implementations have a negative return on investment (ROI).
It doesn’t need to be this way. Your company runs lean. You know where the implementation hiccups might be and where you’ll meet resistance. Gain a clear understanding of what it takes to make an ERP implementation successful, examine the potential risks to the project and staff it appropriately. Then, you can reap the benefits of having your ERP be a catalyst for your company’s future success.
Know your motives
What gains do you expect when implementing your ERP? What problems will it solve? What won’t it address? We all know the phrase “garbage in, garbage out.” That certainly applies here. If your data isn’t clean, plan for trouble or plan to resolve it. Treat data cleansing and migration as separate elements within your project.
If workflow is crushing you, plugging data into a different tool won’t help on its own. Commit to address both your workflow and transaction processes during an ERP implementation. It’s time to re-think everything.
A central database serves as the single source of truth. You will now be able to marry purchase orders with existing stock, perform margin analysis and align your sales goals to reap major benefits. Quantify the ROI and other metrics when you can, but don’t ignore ease-of-use and other non-monetary benefits that moving to an ERP will provide.
Assess your needs
Hone in on what you need, what you want and what would be nice to have. While the latter often has to get shelved, there may be ways to achieve the results you’re looking for with methods you may not have considered.
Finance, accounting, HR, sales and customer service are universal needs across industries. Service businesses may find a contract management module essential. Manufacturers need inventory management, production and warehouse monitoring tools. Non-profits often need grant management and donation tracking.
You can (and should) continue to get more granular. Do you engage in eCommerce, require HIPAA compliance or deal in multiple currencies? Put them on your list. Planning on an IPO some day? Definitely put that on your list. Being aligned with regulatory requirements is critical.
Is there more urgency in one area than another? Naturally, you’ll want to scope out the whole ERP package, but put special emphasis on ensuring your priorities are fully addressed by your ERP solution. A by-module implementation might be helpful or necessary given your available resources and priorities, so consider that as well. If your sales team loves their current CRM (customer resource management), investigate the option of retaining it and using an API (application programming interface) to tie it in rather than shifting to the ERP’s own CRM module.
Ask tough questions and pick a winner
In the age of online reviews, vetting vendors by checking references may seem passé, but it’s still a valuable exercise worthy of your time. References may turn out to have entirely different business models than yours, but you might be alerted to difficulties with migrating to a particular module that sways your decision or helps you better prepare for your own implementation.
Are there ERP companies that specialize in your field? What degree of customization, if any, is needed if you pick someone else? Trade publications and industry colleagues can help narrow down your prospective vendor list. Look to articles, advertisers and conference sponsors to find information on your options.
Once you are down to the top couple choices, ask for video conferencing meetings with the implementation teams. It’s important to move beyond the savvy sales team and get to the people you would be committed to working with day to day. Even with demos, seeing the team’s body language and side glances can help inform you of their confidence in the product while providing you with information needed to make your decision.
Rally your troops
Involving key stakeholders early is vital to a successful ERP implementation. The conversations will serve to shore up your knowledge while also gaining buy-in from potential resistors. Change is hard. Perfect your communication and leverage the involvement of your peers. Enlist end users now to aid with their adoption of the new platform, encourage early feedback and ultimately get great insights of where unforeseen wins and gremlins may be hiding.
Assembling the ERP project team should also be underway. Tap into existing resources where you can, ideally by assigning them to the project full-time. Consider backfilling positions for the duration if needed. Take note of team members who are particularly interested in technology and improving business processes. They will be assets to keep others motivated when the going gets rough.
Identify any skill or knowledge gaps and investigate options to resolve them. If you anticipate an ongoing need beyond the project, budget and staff for it. If specialty or short-term assistance is needed, Paro can quickly match you with ERP implementation experts to provide insights and assess your situation.
Building a successful ERP implementation plan is challenging but completely doable. With the right preparation, resources and team, gaining the advantages of an ERP are within your reach.