How is ERP Implemented?
Enterprise Resource Planning (ERP) solutions allow companies to be transformed by optimizing customer engagement and streamlining the manufacturing process. Still, a significant percentage of businesses don't understand the successful implementation of ERP solutions.
To be more accurate, 75% of the ERP projects go wrong.
Because of the time and cost involved in implementing ERP in small companies or large, it's crucial for an organization to properly understand and thoroughly research the entire process before starting its ERP implementation.
Utilizing Acumatica's Financial Management Suite Inter-Company Accounting Module, PayWith has grown 50% year over year since its implementation.
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What is the ERP Implementation Process?
ERP software is used for uniting information, data, and process from all over a business and discrete systems. This could vary from staff availability to customer data stored within the CRM. The whole implementation process involves software installation, transfer of all information, both transactional and financial data, training your customers to use the software, and mapping the processes.
This process will find out whether your ERP implementation is a failure or a win. ERP software implementation represents the end-to-end process of collecting business requirements, choosing the right software platform, shifting legacy data, configuring the integrations, and eventually implementing a new ERP system.
Apace with assuring the technical aspects of the ERP system are implemented appropriately, the ERP implementation procedure also focuses on leading change management by making sure that user requirements are contemplated at each stage, and they all are trained well to use the software.
How is ERP Implemented?
The implementation of ERP involves several phases and steps, most often involving:
- ERP software installation
- Settings & Configuration options
- Migration of transaction and financial data from the old ERP system
- Setting up users or employees with particular responsibilities, ERP system access, and security settings
- End users’ ERP software training
Based on the implementation approach you decide and the intricacy of your business procedures, ERP software implementation could take three months to three years to show results, sometimes more.
Simply put, the timeline for a financial services company executing core account modules like Accounts Payable, General Ledger, and Accounts Receivable is going to be less complex and speedier than a constructing business also requiring shop floor, inventory, and buying, production modules, order process, workflow process and every additional data and configuration that comes with it.
Irrespective of the timeframe, going for the right ERP implementation partner, deploying a well-documented project plan, and appropriately allocating resources will determine how efficient, effective, and victorious the implementation process turns out.
What are the Steps to Implement an ERP System?
The initial step in an ERP implementation is to organize the project team. There's often an executive sponsor, many business process owners, and end-users on the buyer side. There will be technical consultants, business analysts, and a project manager on the technology provider or ERP partner side.
Implementing an ERP system at the beginning can be challenging, as it takes a lot of time, effort, and diligent planning to watch the perks to your company. The conversion can be complex as you and your employees must adapt to the updated system and learn to use it properly. The significant obstacle is that it transforms the technology used and hugely influences your company's culture.
Still, taking this step can be highly profitable if implemented appropriately. It can assist you in harmonizing all of your data, stream your business operations, and substantially improve collaboration and communication within your company. An ERP system is beneficial for lowering costs, and by enhancing cooperation, it can be helpful to boost efficiency and productivity, which will take to top-notch customer service and allow you to do much better than your competitors.
There are several reasons for deploying ERP software, but how can you ensure that the system has been implemented successfully? These are the essential steps of ERP implementation.
1. Analyze your objectives and goals.
Before ERP software solution implementation, you must classify your objectives and precisely understand what you want. Given the plenteous benefits of ERP systems, you might be thinking about what it can do for your organization, but do you know what targets it will help you accomplish?
Narrowing down your top choices and then comparing them can be very helpful in choosing the best ERP the first time around and save you on your investment in the long run. Ask yourself and key team members questions like those below:
- Which ERP features are most important for company initiatives and growth plans?
- Which areas of the company could be more efficient and lucrative?
- What main ERP characteristics, features, and tools will bring benefits to the business?
- What processes are holding back growth and development?
- What is the ERP implementation timeline and budget?
- Which types of ERP systems are best suited to the business and industry?
Then you'll need to consider the vendors that offer systems which align best with your company need and goals, asking questions like:
- Is SAP an ERP system for your business?
- Is SAP better for ERP? for your company?
- Is Oracle better than SAP when it comes to the features and integrations you need?
- When it comes to pricing and services, is SAP better than ServiceNow?
You must think about your company's objectives and goals for ERP and look for ways a new or upgraded system can be helpful to achieve them. You must identify your KPIs (key performance indicators) to analyze the problems that ERP will help you with efficiently. This will also provide you an insight into your future projections so that you can transform your organization to the change.
2. Appoint a project manager to alleviate the implementation process.
You must pick out a competent project manager who can ensure that the implementation process goes forth in a streamlined manner. A qualified and expert project manager with the right skill and experience will lead your employees through the the stages of ERP implementation and ensure that they totally understand the importance and the effect it will have on your business and describe their jobs and responsibilities.
That’s why you must look for either an internal employee with great communication and management skills for the project manager’s role or appoint somebody with the required skill set. In whatever way, you’ll save a whole lot of time which you can use to focus on your core expertise and all the other tasks required for a successful ERP implementation.
3. Search for the best ERP software for your business requirements.
Discovering the right ERP software for your demands is probably the most crucial step you have to take because not every ERP solution will bring you the ideal results. What worked ideally for somebody else might not be the best solution for your particular business needs, so you should think carefully through all the reasons to undertake an ERP implementation.
One-size-fits-all is definitely not the success mantra here, so you must consider your business requirements, the industry you belong to, and your system also demands your future expectancy. For example, do you want a cloud solution or an on-premise system that will work better for your organization? To come to the right choice, you should talk about all the possibilities with an expert ERP consultant.
4. Plan and execute data migration.
Shifting transaction and finance data is an essential step for the proper ERP implementation because, if done appropriately, it will help you streamline operations efficiently. If done negligently, it could take longer than expected to fix. Before migrating all of your data into the new ERP system, you must filter out the incorrect and unnecessary data so the new system is fresh and accurate. Your objective is to filter out the important data and shift the most important details to attain data efficiency and integrity.
5. Configure the ERP system.
After discovering the right ERP software for your business needs and directing accurate data conversion, it's time to launch the ERP system and implement your decided ERP solution. After installing the infrastructure, you must configure the ERP system and set it up according to your business needs. Based on both the vendor and the software you choose, the timeline of this process can differ greatly. You want to keep a balance between being watchful to details and time to execute.
Some ERP software is robust and will need a more extended implementation depending on the complexity. Some will be ready to get set. A good vendor will be completely attentive and cautious and spend time reviewing your demands before implementing the ERP solution to make the process shorter yet smoother. Others might exclude this step and get lost in details while implementing, dragging out the process or adverse, leaving you drooping with a system that is not up to par.
Ensure you speak about this process and timeframe with your vendor before the implementation, so there are no surprises.
6. Run a test.
After the configuration phase, it's substantial to move into a testing phase to ensure that everything is working as expected. Testing is an essential part of the ERP implementation process as it will give you a clear understanding of the system's performance and help you make a smooth switch. You should not opt for going live before running the system and user acceptance test.
7. Educate and train your employees.
After the implementation and testing step, you should train your workers so they can use the new system effectively and efficiently. You should appoint a team of experts to offer the mandatory on-site ERP employee training and help all your workers fully comprehend and become proficient with the ERP software. Your implementation team should indeed be provided with more detailed training to handle all technical problems that may happen in the future.
According to Hash Code Solutions, 51% viewed their ERP implementation as unsuccessful and 46% of the noted that while their organization had an ERP system in place or was implementing a system, they did not feel their organization understood how to use it to improve their business.
8. Enjoy your new ERP system.
After training your employees, it’s time to go live and start synchronizing all your resources and activities, efficiently streamlining your business processes. Do not hesitate to spend some time to approve, be 100% sure before approving.
You must check them once again to ensure that it is working flawlessly. Don't make the mistake of assuming that all work on your ERP implementation is completed.
For the ERP implementation process to be genuinely successful, you must continuously work on it. Only implementation of the software solutions employee training is not enough. You must maintain it regularly.
You must ensure that the system is being maintained properly, updated when required and that any kind of problem or glitch is dealt with speedily and efficiently so that your ERP system can achieve level best performance levels.
Which is the Most Critical Phase in ERP Implementation?
A traditional ERP implementation plan is usually split into ten phases covering the whole ERP software implementation lifetime, from conceptualization to deployment and supporting the live systems and its customers. The implementation plan phase is the most critical phase in ERP implementation.
Implementing ERP software is most likely one of the mega digital transformation programs an organization will undertake and ERP challenges often arise in implementation. It's thus crucial that an ERP implementation is made to document the needed resources, implementation timeframe, and how the change will be incorporated. In this phase, businesses must be attentive to these three departments.
To properly implement the ERP, you should select a competent yet reliable implementation for delivering the project successfully. This team will consist of technical and non-technical members responsible for designing and creating the software and providing feedback on its practicality.
It's super important to involve stakeholders from all over the organization in the implementation team because you will need to include the end-users of the software in the designing, creating, and testing phase to make sure the final product serves its purpose.
- Change Management Plan
The change management plan will list the roles and operations needed to successfully switch from your present fragmented systems to the updated ERP system. This will comprise tasks and milestones around data conversion, testing with QA, budget forecasting according to the project progress, and training of the end-users once the new system is live.
Besides outlining the implementation guideline, tasks, and milestones, the change management plan must also involve guidelines across general communication, critical issues must be escalated, and how to track the progress.
- Budget Expectancy
As with big-scale software projects, it can be easy to look into the budget when implementing a new ERP system. It's essential that you budget practically and expect some roadblocks during the implementation phase. It's thus recommended to set aside a decent amount of contingency in your budget from the beginning to cover unexpected expenses and delays. And keep in mind that you should always weigh the top ERP advantages into your budgeting to keep sight of the monetary growth and savings you expect to achieve by investing in an ERP.
This possibility can be reviewed throughout the implementation phase to ensure that it's enough and aligned upwards and downwards to mirror actual project progress.
Implementing an ERP solution into your business can be a game-changer. Although it takes a considerable amount of time and detailed planning, your efforts will reciprocate in the long run if you make the shift to the new system as streamlined as possible.
A truly well-qualified ERP help you improve productivity, decision-making, collaboration, communication, and efficiency within your organization, efficiently coordinating your business activities and improving your workforce performance; you'll also notably enhance your customer experience and bring forth plenteous opportunities for your business to grow.