Have you made the decision to use ERP (Enterprise Resource Planning) software in your company? Your worry has started, as ERP Implementation doesn’t come without risk. ERP Implementation has positive and negative risks, Talking about triple constraints, cost, schedule, and quality will always remain a concern of anyone. Business performance, loss of revenue, and productivity of staff during implementation is other major issue.
All these questions and concerns are commonly raised by Business and IT Professionals and the fact is that 70% of ERPs fail if they don’t follow proper implementation methodology. Remember, ERP implementation is an investment of time and resources, any mistake can lead to disaster and you can’t roll back or fix the issue when it is too late.
But the fact is that 30% of ERP implementation succeeds because the implementation team and organization follow the best practices. I am going to reveal those best practices that I adopted during my 2 decades of ERP Implementation career and I was able to smoothly deploy the ERP, with very few issues.
1. Form an ERP Steering Committee
There are various critical factors of implementation of any project, and number 1 amongst those is Management Support. Until you get support from top management EPR implementation can’t succeed, therefore, form a steering committee that consists of Top executives of the company.
2. Identify the Process Owners and Key Users
Here people always get confused, they think process owners are the key users, but it is not true, process owners can be the functional heads or the process managers, they must lead their department to ensure that the project tasks related to ERP are completed within the allocated time. The key users are those who will be experts of that department, they must have a logical mind and they know the smart work.
3. Create Project Charter
The project has not yet started, you must form a project charter with a high-level budget, key stakeholders, success criteria, assumptions, and constraints. High-level requirements, schedule, and quality concerns must also be mentioned in the charter. This will help the project team to successfully complete the project. refer to my PMIsm guideline for Project Management best practices.
4. Form Project Team using team-building techniques
You can simply get the list of team members, you have to form the ERP Project team, to do this you have to see who has the better knowledge of Business Processes, you also must do the force field analysis to see who will against the project and who is in favor of the project. There might be some key users or process owners who will be against the ERP project, you must identify them and update their details in the stakeholder register and see if they need to be monitored closely and look at their role in the project. You must involve the top management/ERP Steering committee and address the stakeholder register. Buy-in from the process owners is important as you will need to allocate the resources in the ERP implementation. ERP Implementation is not a one-man job, the team must have clear roles and responsibilities and KPIs defined, this will help to ensure they treat the project with seriousness and spare their time.
5. Requirements Traceability Matrix
Though ERP Implementation is all about business process reengineering, you must ensure that success criteria are available as an outcome of the ERP project. Therefore it is important to gather the requirements and align those requirements with business goals and objectives. SMART Goals and KPIs must be mentioned to ensure that the ERP project is successful.
6. ERP Vendor and Implementation Partner
Implementing ERP is a long term business investment, and the product and partner also creates a long term business relationship with the company, therefore you must do your research to ensure that ERP products is sustainable, upgrades and updaates are regular, if chosen then you must ensure that the vendor is capable to implement the ERP. Their successful projects must be reviewed, you must meet existing clients and know what challenges they faced with the ERP vendor and Implementation partner. Know about specific issues in the ERP software before you sign the contract with the ERP partner.
7. Engages Key users and End users
Users must be engaged throughout the life cycle of ERP Implementation, make sure the survey forms are ready, and keep taking their feedback when any module or part of the module is implemented, you must also make sure to take the feedback if any challenges are faced by the users. If these problems and issues are identified at early stages you can avoid cost overruns. When the project is at the go-live stage you may not be able to resolve the issues at that time, therefore ensure that end-user feedback is recorded and resolved.
8. Prepare and Clean Master Data and Transactions
I must consider this as crucial and critical. Master data is critical for any Business application deployment, ensure that Master Data is up to date and it is clean, this may include Chart of Account, Customer Master, Supplier Master, Inventory Master, Employee Master, Fixed Assets, and so on.
Not just the master Data you must decide before tha implementation about the transactions data, and how many years of data you want to have in the new ERP System. New ERP may not have the same structure and the same format. Your implementation might delay if you have not prepared the master data. ERP Implementation partners will enjoy this moment as they will just keep charging their fees for implementation time but your master data is not ready. Therefore, ask the vendor prior to implementation to send you the template for the Master Data and make the data ready before the implementation. Though you might need to update the new records, this can be done by simply using a few scripts, and updating those scripts using a predefined template.
During this process you will also find the mismatch and missing data, that can be addressed before the implementation.
9. Business Process Reengineer and Change Management
ERP implementation is in fact the business process re-engineering. Staff is used to following the old practices and old system. What is expected from the new process must be communicated to the staff. It shouldn’t come as a sudden change, staff must be aware that the process change will take place so they must prepare themself to adapt to the new process instead of instructions, provide them the updates on a regular basis to ensure the staff is well informed and engaged.
10. Knowledge Transfer: Training is important
New User interface and, new software, new processes. This is a big change for the people, they may not be familiar with the new technology, new terminologies, processes, interface navigation, and so on. Train them and train them again, do it again. Yes, training is very important, they can’t learn the software in just one day, give them time, provide them the interface to practice, but have a proper learning management system and ensure that when you train they really learn. Develop a mentor-mentee relationship where key users should train the other users and so on. This can save time and cost.
ERP Implementation is easy if the best practices are followed, these are a few common practices. There is much more than just these 10 practices, ensure that you follow the critical success factors and project management methodology before implementing ERP.