Succeed by Implementing ERP
Implementing ERP systems are extremely complex and take months and even years to implement. If your stakeholders understand the long-term benefits
of the system, they are much more willing to accept any perceived temporary steps backward. An enterprise resource planning (ERP) software project can be daunting for first-timers or veterans handling a migration.
A D V E R T I S E M E N T
A common malady for some stakeholders is to become complacent with the status quo. You often hear, “We like what we have. It works for us.”
This mindset is predominantly on campuses with strong IT departments, and older, homegrown legacy systems that still function quite well. Typically they have been designed to do exactly what the functional departments want them to do. In these cases, it’s easy to believe that an ERP does not meet their needs.This sentiment will continue throughout the implementation unless you proactively sell constituents on the many advantages of the new ERP.
Tougher competition in the marketplace is generating the need to better optimize
resources, improve profitability and keep customers satisfied. Companies are
increasingly implementing Enterprise Resource Planning (ERP) software solutions to
improve operations and provide faster customer response.
Choosing an ERP solution that meets your specific business requirements will enable you
to have a smoother implementation. If the software package is written for your industry,
you won’t have to custom design a solution. Customized solutions are time consuming to
implement and add unnecessary cost. One of the top reasons ERP implementations fail is
because the software doesn’t meet basic industry specific business requirements.
However; purchasing an ERP application is only half the battle. A well designed
implementation plan is the key to success.
The following five steps are treated as the key behind succwssful ERP implementation:
STRATEGIC PLANNING :
Project team: Assign a project team with employees from sales, customer service,
accounting, purchasing, operations and senior management. Each team member should be
committed to the success of the project and accountable for specific tasks, i.e. developing a
timeline, finalizing objectives, formulating a training plan. Make sure you include first line
workers as well as management on your team. Base the selection on the knowledge of the
team not status of the employee.
Examine current business processes: Have the team perform an analysis on which business
processes should be improved. Gather copies of key documents such as invoices, batch
tickets and bill of lading for the analysis. To start the team discussion, consider questions
such as: Are your procedures up to date? Are there processes that could be automated? Are
personnel spending overtime processing orders? Does your sales force and customer service
personnel have real-time access to customer information? The team members should also
conduct interviews with key personnel to uncover additional areas of improvement needed
Set objectives: The objectives should be clearly defined prior to implementing the ERP
solution. ERP systems are massive and you won’t be able to implement every function. You
need to define the scope of implementation. Ideally, the scope should be all inclusive. But
practically, it is very difficult to implement. Examples of objectives would include: Does the
solution reduce backlogs? Can the solution improve on-time deliveries? Will you be able to
increase production yields?
Develop a project plan: The team should develop a project plan which includes previously
defined goals and objectives, timelines, training procedures, as well as individual team
responsibilities. The end result of the project plan should be a “to do” list for each project
PROCEDURE REVIEW :
Review software capabilities: Dedicate 3-5 days of intensive review of the software
capabilities for the project team. Train on every aspect of the ERP software to fully educate
the team on capabilities and identify gaps. Determine whether modifications are needed prior
to employee training.
Identify manual processes: Evaluate which processes that are manual and should be
automated with the ERP system.
Develop standard operating procedures (SOPs): for every aspect of your business. These
procedures should be documented. Make sure that you modify the document as your SOPs
change. This is a huge task, but it is critical to the success of your implementation.
Examples of SOPs:
• How do you handle global price changes?
• What are the processes for inputting new customer records?
• How do you currently handle the paperwork on drop shipments?
• How do we add a new product or formula?
DATA COLLECTION & CLEAN-UP :
Convert data: You can’t assume 100% of the data can be converted as there may be outdated
information in the system. Determine which information should be converted through an
analysis of current data.
Collect new data: Define the new data that needs to be collected. Identify the source
documents of the data. Create spreadsheets to collect and segment the data into logical tables
(Most ERP systems will have a utility to upload data from a spreadsheet to their database).
Review all data input: After the converted and manually collected data is entered into the
ERP database, then it must be reviewed for accuracy and completeness. Data drives the
business, so it is very important that the data is accurate.
Data clean-up: Review and weed out unneeded information such as customers who haven’t
purchased in a while or are no longer in business. Now is the time for improving data
accuracy and re-establishing contact with inactive customers.
TRAINING AND TESTING :
Pre-test the database: The project team should practice in the test database to confirm that all
information is accurate and working correctly. Use a full week of real transaction data to
push through the system to validate output. Run real life scenarios to test for data accuracy.
Occurring simultaneously with testing, make sure all necessary interfaces are designed and
integration issues are resolved to ensure the software works in concert with other systems.
Verify testing; Make sure the actual test mirrors the Standard Operating Procedures outlined
in step 2, and determine whether modifications need to made.
Train the Trainer: It is less costly and very effective if you train the trainer. Assign project
team members to run the in-house training. Set up user workstations for at least 2 days of
training by functional area. Provide additional tools, such as cheat sheets and training
documentation. Refresher training should also be provided as needed on an ongoing basis.
Final Testing: The project team needs to perform a final test on the data and processes once
training is complete and make any needed adjustments. You won’t need to run parallel
systems, if you have completed a thorough testing.
GO LIVE AND EVALUATION :
Evaluation: Develop a structured evaluation plan which ties back to the goals and objectives
that were set in the planning stage. In addition, a post-implementation audit should be
performed after the system has been up and running for the first week for reconciliation
purposes and three to six months following to test whether or not the anticipated ROI and
business benefits are being realized. Comparing actual numbers with previously established
benchmarks will reveal if the software tool does what it is intended to do - add value to the
business. It is important to periodically review the system's performance to maximize ROI.
Upper management and project team
members should be committed for the company to realize the benefits of successful ERP.