Enterprise resource planning (ERP) refers to the systems and software packages used by organisations to manage day-to-day core activities such as accounting, procurement, project management and manufacturing. As well as enabling you to align departments and improve workflow, an ERP system can also benefit your business by:
- Improving insights and efficiency thanks to real-time information generated by reports
- Reducing risk as data integrity and financial controls are improved
- Lowering management and operational costs through better defined and more streamlined business processes.
If you’ve decided that ERP is right for your business but you’re not entirely sure how to implement it, follow the steps we’ve put together below.
- Put together a project team
By creating a dedicated ERP implementation team, the process is far more likely to run smoothly. You will need some core members including:
- A project manager to lead the implementation
- An application analyst, responsible for data migration and cleansing
- An application developer for system customisation
- A QA test engineer to head system testing and performance efforts
- Stakeholders, such as senior management or sales professionals can also be very helpful, but who you choose will depend on what functionality you’re implementing.
If you don’t have in-house ERP expertise, you should also consider hiring an experienced implementation consultant who will be able to run the project for you.
- Create a change management plan
Best practice would be to plan your ERP implementation in steps, delegating the relevant tasks across your new project team depending on expertise.
Change within an organisation can often bring disruption so take steps to keep this to a minimum, such as:
- Communicate any anticipated disruption with staff
- Allow adequate time for training employees on new systems
- Take key stakeholder needs into account when creating your plans
- Devise a budget
According to a Software ThinkTank report, more than half of ERP implementations run over budget. Although there’s no definitive answer for how much the process will cost, a fair assumption would be that it will require at least 1% of your annual gross revenue.
Some costs can be defined in advance, which can help with your ERP implementation budget including:
- Hardware/network upgrades
- Staff overtime
- Vendor training and consultancy fees
- Data backups and storage
- Productivity loss for the inevitable drop during implementation
- Migrate your data
Data migration is the first element of moving your organisation to the new ERP and will most likely be the remit of the application analyst on your project team. The tasks will involve:
- Database setup
- Data cleansing and verification
- Mapping legacy data to new database fields
- Transferring data to the new system
- Testing and verifying legacy data and new data inputs
- Train users
Once implemented, the new system needs to be adopted and embraced as soon as possible to minimise downtime. The style of training that suits your employees will be down to your culture and individuals, but it’s worth selecting a few either experienced or technophile employees to champion the new system as super-users, helping others and taking up the slack.
If your internal culture is suited to it, you could also try gamification or incentives to encourage training and adoption.
- Going live
There are a number of activities during the go-live stage of ERP implementation that will require clear communication from your team to the other employees, to manage their expectations:
- System testing (pre and post go-live)
- Staff scheduling (including required overtime or temporary staff)
- Identifying metrics for project evaluation
- Creating a communication strategy for system downtime
- Network speed and reliability checks
- Data backup processes
- Evaluate the success of the project
Once implemented, if all has gone to plan, there are a number of areas to consider and monitor to determine whether or not your ERP is successful:
- What’s your return on investment?
- Has there been a reduction in human error in processing data?
- Have productivity levels increased?
- Are your clients happier with the improved service you can now offer?
If you need help recruiting professionals who can help you with your ERP implementation, please don’t hesitate to get in touch with The Consultancy Groupand we’ll be more than happy to help.