Top 5 Guidelines for Successful ERP Implementation
The list of companies with failed ERP implementations is long. From mega corporations to city governments, one common theme from these disasters is the lack of planning. Here are some guidelines on what you should be focusing on when implementing an ERP solution.
1. The decision to implement an ERP solution should start and end with the long-term goals of your company.
Too many times company executives think that ERP is a technology play when in reality it is a business process improvement project. This misconception hands the reigns of planning, choosing, and implementing all over to IT. This is not to say IT should not be involved because their role is vital also. But, IT should not be the leading department on an ERP project. The three most vital players in the decision to implement an ERP solution are the CEO, COO, and CFO. Direction on the long term strategy of the company should be tied to what is being purchased and implemented for an ERP project. If these three officers are not involved up front the project is at risk of failure.
2. You scheduled your go live, or project kickoff during a busy time in your company's yearly business cycle.
All companies have busy times during the year. Usually a company has the same busy time during the year every year. For my company it is usually end of the year between September and December. For some manufacturing companies it is in the beginning of the year. For retail organizations it is November through December. Knowing that these busy seasons occur every year it always amazes me when I see a company not take into account these seasons of productivity when rolling out a new ERP system or process improvement. This can really affect the go live for a project because the resources that are needed can be tied up with normal duties. This double dipping of resources can put a strain on the project team and cause the project to be implemented poorly, or result in cost over runs due to missed deadlines. It might not be avoidable in some cases during the project but there should be a mapping of all important company activities so important milestones in the project can be planned do avoid company conflict.
3. You thought training was for tri-athletes.
Your shiny new ERP system has been implemented, the project came in under budget, there were no snags in test to production and everything seems great. Then all of a sudden there starts to be a ground swell of complaints about the new system and how it is making life harder for everyone in the company (Exactly the opposite of what the system was supposed to do). Many companies experience this for one simple reason. The company did not view training as being significant enough to be included in the final budget. Not Training a staff on a new system that is supposed to improve company productivity will cause your company to grind to a halt. The reason for this is twofold, 1) Training helps to make people confident in how they do their job and 2) It gets people comfortable with the changes that are happening which in turn endears them to the process. Training should be happening during the project, during go live, and after the project has been completed. Training should also be used as testing sessions while the system is going through the test phase of the implementation. What better time to have people play with the system then when problems can be corrected. Training ensures that the money spent on this shiny new ERP system won't be wasted.
4. You did not track your improvements after the ERP system was implemented.
The planning part of implementing an ERP system is the most crucial part of the project. Interviews are conducted with the different line of business owners, time lines are laid out, and data is cleansed and prepped to be moved over to the new environment. These are all very important steps. But, one step that is often over looked is documenting what the current performance levels are of the existing enterprise and what will be the measure of success once go live occurs. When the enterprise has adopted the new system all of the reasons that the system was purchased seem to disappear and the only thing left are the headaches associated with it. It is crucial to see where the enterprise is tracking in terms of performance against the company's goals and where the leaders expect it to be once the new ERP system is put in. This analysis will add time to the overall project but will pay dividends in the form of return on investment four to five years into your implementation.
5. You hold on to old systems and business process that will not allow you to accomplish your long term goals.
You have made the decision that your current business processes, and systems are holding your company back from growing and accomplishing its goals. You have chosen your ERP provider and start to go over your infrastructure for implementation. During the mapping out of what needs to be done you start to realize that a good portion of your existing process will have to be thrown out due to it not fitting the new system. One of the casualties is an old manufacturing program that is used to produce and track your products during production. Many people have used this system for decades, and the pain it will cause to replace might be more than you are willing to bear. In this scenario you have to stay focused on the reason that you are making this change, and stand tough in the face of adversity. The new system is going to make your business better for the long term. It will enable growth and allow your company to achieve a success that has not been possible with your old systems. Plus, if you decided to keep the old system, the cost to integrate it will increase the cost, and time of implementation. The other ramification is that keeping the old system will continue to cost you money each time an upgrade is needed for your ERP system. This cost is due to the connection between the new and old system having to be maintained, and will erode return on investment on the project. Try to use as much functionality that comes with the ERP system as you can. Customizations and interfaces with old systems are costly upfront and require expert programmers long term to keep the system running correctly.
If you follow these five pieces of advice you will have a much better experience implementing and using your new ERP system. If you have been experiencing these problems or went through a tough implementation I am sure some if not most of these were a contributing factor to your discomfort.
“Good is the enemy of great.”
- Jim Collins, Good to Great