• MSSBTA Staff

Ensure a Smooth ERP System Implementation

ERP System Implementation

Implementing a new Enterprise Resource Planning (ERP) System is a major business initiative, not just a technology project. It will not only transform the way your business operates internally, but it will also impact your interactions with your customers and vendors.

Your ERP System vendor’s job is to deliver the promised software on time and on budget. However, your organization will be responsible for several functions not typically within your ERP vendor’s scope. Prior to discussing these functions, it is helpful to understand the ERP System Implementation process and some challenges your organization may face.

The ERP Implementation Process

After conducting an ERP System Selection, you can expect an ERP System Implementation process beginning with a Discovery and Design Phase, moving to a Build and Configure Phase, followed by a Phase that includes User Testing and Training, and ending with Data Migration and “Go Live” and Post-Implementation Support.

Discovery and Design. Your vendor(s) will work with your business units to develop detailed requirements and obtain alignment on the system architecture and user interfaces. This is where the Business will be asked to make major decisions about what your System will ultimately look like and what ‘to be’ processes will be automated. The Discovery and Design Phase can be one of the most demanding phases in terms of management, Subject Matter Expert (SME) involvement, and time investment.

Build and Configure. Once the Design is finalized, your vendor(s) will work to configure the software, build the integrations, write any custom code, plan for data migration, and develop test scripts and training materials. This is the most technical phase of the project and will involve specialized resources from your vendor(s) preparing your new system for deployment.

User Testing and Training. Vendors vary in their preferences on when User Testing and Training happens. Some prefer an Agile approach where user testing occurs following every Sprint or series of Sprints. Others prefer an approach where user testing occurs following a major milestone or delivery of a module. Whichever approach is used, the Business Unit sign-off following User Acceptance Testing (UAT) is a major milestone for your vendor. Training for end users and super users can happen in parallel or following UAT.

Data Migration and “Go Live”. Data Migration involves moving information from legacy systems to your new system. Planning for, and testing of, Data Migration takes place early in the implementation process, while Cutover (the movement of data) typically happens just prior to “Go Live”. “Go Live” is when your new system becomes the active system of record, and all new data and transactions flow through the new system. Some vendors choose to conduct a “Go Live” following the completion of individual modules to decrease risk.

Post-Implementation Support. Following “Go Live”, most vendors will include some type of period where the vendor will rapidly address any problems that surface immediately following “Go Live”. Depending on your ERP System and the vendor’s business model, the vendor may also provide longer term post-implementation support.

Challenges in ERP Implementations

You have heard the horror stories where an ERP Implementation ends up costing much more than expected, taking a lot longer than planned, and failing to deliver on the promised results. Interestingly, we rarely hear these problems arise from technical issues with the software being deployed. Instead, problems usually center around people and process issues.

Insufficient Resourcing. Leaders often assume (or are “sold” by an ERP Sales Rep) the vendor(s) will manage the implementation and the burden on internal resources will be minimal. They underestimate the time and effort required from their own business resources and fail to budget appropriately for extra resources to support the implementation. Unfortunately, business does not stop when you decide to undergo an ERP Implementation, and there is often a tug-of-war between implementing ERP and dealing with the regular day-to-day activities. Failing to plan for this surge in resource requirements often results in delays and cost overruns.

Inattention to Change Management. Implementing ERP will have a major impact on your people. It will impact how they perform their day-to-day work and how they interact with your customers and vendors. Failure to adequately manage the “people side of change” can quickly lead to your own employees undermining the business changes you are seeking. We have seen these “people issues” range from low knowledge levels and incorrect usage of the ERP, to reverting to old processes. We also have seen poor accountability and ownership of the new system, and active resistance of the implementation itself.

Process Problems. We often see bad process getting automated. This happens because it is difficult for an organization to see its own inefficiencies and because organizations do not perform enough process rigor during the Discovery and Design Phase. Employees become entrenched in a way of doing things and have limited insight into industry best practices. There is also a significant demand on business resources during the initial phase of Implementation. When organizations lack this perspective and insight, and do not plan for this surge in resource demand, good “to be” processes do not get fully developed or defined. This can manifest in “re-work” or the ERP System failing to live up to the promised return.

Lack of Vendor Oversight. It is easy to fall into the trap where your vendor(s) manages you and not the other way around. An organization’s internal resources usually do not have the skill, capacity, insight, and tools to provide good governance for the vendor(s). They are unable to hold both the vendor and internal resources accountable for their respective roles and responsibilities in the ERP Implementation process. This lack of oversight and governance can lead to a lot of finger pointing when uncertainty raises its ugly head, and ultimately can result in delays, costly change orders, and a mismatch between expectations and the delivered results.

Data Migration is an Afterthought. The time to start planning for data migration from legacy systems is during the initial phases of the implementation. Often, we see leaders fail to think through what data needs to be moved, how it will be cleansed, how it will be moved, who will move it, and when will it be moved. Most organizations going through an ERP Implementation have enormous amounts of data and information about its customers, vendors, employees, and previous transactions. Poor data migration planning can result in delays, change orders, or lost data.

What ERP System Implementers Won't Do

Your ERP product vendor, or systems integrator, will typically perform the tasks related to infrastructure set-up and configuration, applications set-up and configuration, and applications training and support. Some questions you should be asking yourself include:

“What won’t my ERP vendor(s) do?” and

“What functions will my organization need to perform during ERP Implementation?”