The implementation of a software system—particularly one as complex and expansive as an ERP—requires a holistic knowledge of not only the software in question but an intense understanding of your own organization’s business operations and workflows.
We often take our institutional norms—the way things are done—for granted when we talk about business workflows. Changing these can result in unprecedented growth and, in the case of ERP software, bring more data and insight into your operations than ever before. However, these transformations need to be approached with great thought and care.
With more choice than ever before in terms of software vendors, types of ERP systems, and business operations, the chance to revolutionize your company’s productivity has never been greater. However, with the advent of such choices so, too, does the possibility of catastrophic mistakes become ever greater.
Proper preparation is key to avoiding these pitfalls and can help you learn even more about your own business besides.
Adhering to a general method and creating an implementation plan is the best way to protect your time and your business. Once you’ve learned the principles of how best to integrate an ERP system into your current tech stack, you’ll be ready to apply it to your own industry and organizational needs.
ERP implementation is the process of selecting, buying, and installing an ERP system for use in your organization. It also includes training your colleagues and team to adapt to the new system and workflows that come along with this change.
Implementing a software can range anywhere from simply downloading an application to your system to coordinating the data of your entire organization. Despite this vast range in time, effort, and money, the implementation of larger software solutions such as ERP or CRM will have similar orienting points when it comes to their implementation.
In short, the ERP implementation process is a heuristic wherein a prospective buyer (you) analyzes the current business plans and data processes, installs and tests the software, migrates data into the new systems, and trains your team in order to adapt to the adoption of a new major tool.
You might have noticed that several skills come into play in this list of tasks: people management, data analysis, and industry insider knowledge, to name but a few. The process of implementing major organizational change in this regard can become a job in itself.
Furthermore, this process is not a “one and done” task to be checked off a to-do list.
It is, rather, a continuous process that must be constantly nurtured and monitored in order to ensure a successful fusion of data, workflows, departments, and even individuals into the new institutional norm you are seeking to create by introducing a new—or the first—ERP system into your organization.
Understanding the ERP implementation lifecycle is one of the most critical aspects of ensuring the success of your business in the face of the unique challenges presented by adopting such a system.
Once upon a time, there was a one-size-fits-all approach that would most likely leave you wanting far more than you got. This period of the history of ERP is over, thankfully, and has ushered in a new era of choice.
To account for this, the way people implement the software itself has had to change and adapt in order to highlight the importance of making the correct decision for your organization:
The various points on the ERP implementation life cycle are not concrete steps for implementing the software. Rather, each one serves as a milestone to mark the general progress of the software deployment in your organization.
The “inception” of the ERP implementation lifecycle revolves around which software you’re going to use.
This informs a myriad of other elements of your implementation, especially depending on the type of ERP system you decide to use, and should be approached with an eye for the specific needs of your business and an understanding for the unique problems presented by the industry in which you operate as well as the size and type of organization you run.
For example, the implementation of a cloud-based ERP system is going to be extremely different (and more affordable) than what is required to install an on-premise ERP system.
Given the complexity and differences of each type of system, it’s imperative to understand exactly how each would work with the needs of your particular organization. Beware of buying guides offering quick and easy solutions!
Planning refers to the necessity to create a realistic and detailed plan for the various steps in the process of ERP implementation.
Even once you’ve found the best software solution to meet your business' unique needs, you need to spend some time determining a timeline for the installation, who will be in charge of the technical and/or managerial aspects of executing a normative shift in your organizational workflow, and creating a projection for how long it will take for the software to actually be usable by the relevant individuals and departments from the point of purchase.
This is where the actual implementation of your software happens. The installation of your system will vary widely depending on the type of ERP software you selected, the elements you wish to implement, and the size of your organization.
That being said, there’s a common thread that connects any type of ERP implementation: data migration.
Once this process is complete, you’ll need to spend extra time testing and tweaking the system in order to ensure it’s as effective as possible and ready for use by other members of your business that may or may not possess the same insider knowledge that you do regarding the inner workings of ERP.
Next to actually selecting software that’s compatible with your organization, training your teams and departments to actually make effective use of a new system like ERP is one of the most critical aspects of the overall implementation life cycle.
This goes far beyond simple technical training as well; you need to be prepared for a lengthy process of knowledge sharing, change management, and stakeholder convincing in order to complete this milestone.
There’s no rest for the wicked, and unfortunately, this holds true for major software implementations as well.
This milestone isn’t the end of your journey, per se. Rather, it’s a continuous, ongoing process that will require constant attention so long as you continue to use the software in question.
Now that you have an understanding of the broad strokes of ERP implementation methodology, it’s time to dive into the nitty-gritty that can take your plans off the page and turn them into real, functional utility for your stakeholders and your organization as a whole.
Developing a well thought out plan is going to be what makes or breaks the implementation of your ERP system. Of course, this is going to vary quite a bit based on your organization type, company size, and industry, but the guidelines presented here are aimed at helping you ask the right questions in order to build a unique plan that will help usher in a period of successful growth.
The first step of the process is to make sure you have a comprehensive understanding of the different software vendors that create ERP systems.
The business world has become wide-reaching and vastly complex; ERP software reflects this in the incredible variety that’s available to businesses looking for a way to control their data in a centralized, up-to-date knowledge hub.
It’s important to build this plan from the ground up. Start with the day-to-day needs of your business and find an ERP system that fits, not the other way around.
It might be tempting to default to the big name “best-of-breed” systems that many people use, and while it could very well be that the broad functionalities of such vendors are right for you, there’s a significant chance that your particular organization may require something a little more specialized.
Now that you know which vendor to use and have selected the appropriate ERP package for your organization, it’s time to turn your attention inwards.
No matter how knowledgeable and competent you may be, you’re going to need to build a team to help you implement and roll out your new ERP system. There are a few roles you’ll need to fill in order to best set yourself up for success.
Every project beyond small day-to-day tasks requires that someone keeps everything working as intended at a cross-functional level.
They should have visibility into all areas of the implementation and be able to facilitate communication between other team members, departments, and the initial vendor if necessary.
This member of your team oversees the goals of the project from a high level, adds legitimacy to the operation, and holds executive decision-making authority.
While they probably won’t be involved in the day-to-day aspects of the implementation, they do help by providing the broad “vision” of the overall project.
Business runs on the lifeblood of data. Ensuring yours is accurate and in the correct place is crucial at all times, but doubly so during the implementation on an ERP system.
Having a designated team member who has insight into the cross-functional elements of your organization is crucial for ensuring the data migration into the centralized hub that forms the backbone of your new system goes according to plan. Failure to import the correct data can lead to months of wasted work, so catch this before it becomes a problem!
This position may or may not be required based on the type of system you decide to implement.
However, if possible, you should make it a priority to have someone responsible for the selection, implementation, and maintenance of the main ERP system and various applications that’ll be used by your organization.
The system developer is responsible for developing an in-depth knowledge of the system and its functions across the entire organization.
Not only will this allow them to assist in training their colleagues when the time comes, but it’ll also allow them to act as security experts for both data and system access for the future.
These members of your team are where the “people management” element of the implementation really comes to the fore.
While they might not touch the technical side of things, having buy-in from various team members across the organization will make the cultural adjustment to a new system much easier. They can act as leaders when the issues and frustrations that come along with adopting new workflow processes inevitably arise.
These aren’t members of the “core implementation team” per se, but the part they play is no less critical than anyone else. Make sure you’re keeping them in mind as you design the training for the system so that they can actually succeed with the new workflows.
Time to put rubber to the road and actually get your new ERP system up and running.
This will most likely be done by your system administrator or developer and will require them to build the software infrastructure, network facilities, and data collection. Installation may also be handled by the vendor depending on your contract, or with the help of an external consultant should the need arise.
This part of the process is a great opportunity to evaluate the current workflows and best-practices of your business. Figure out which parts will need to remain manual and which can become automatic once the new system is put in place and re-imagine the way your organization conducts work on a day to day level.
Now that you have the system up and running, it’s time to move the records and data from your organization into the new database.
Data migration can be a tricky order of business, as many organizations store their records in a mix of physical and digital spaces. They are often rife with redundant, duplicate, or just plain wrong information, so it’s the task of the data steward to make sure that these inconsistencies are ironed out prior to the creation of the “master” database at the heart of the new ERP system.
It cannot be overstated that the data needs to be completely mapped, corrected, and verified before being migrated to the new system. Having an incomplete, erroneous database in your ERP system defeats the purpose of the system in the first place and can lead to major headaches down the road.
Of course, just because the system is up and running and the data has been vetted and migrated doesn’t mean that it’s ready to be pounced upon by the average user. The next thing on the docket is to put the freshly minted system through a series of tests in order to ensure the quality and effectiveness of the system.
This is something that shouldn’t be relegated to a few people; rather, make sure you’re conducting these tests using real employees and real data to simulate scenarios that could actually affect your business and the operation of your new software system.
The next part of this step is to make sure you’ve identified all the problems that arose during your trial runs and incorporated the necessary changes. Depending on the timetable you’ve decided on for implementation, the more tests you can run, the better.
This will help you find more corner cases and less obvious problems that may arise with the influx of a large number of users during the company or team-wide launch.
Now that you’ve finished ironing out the kinks in your system, it’s time to start bringing the end users up to speed.
However, before you start educating them on the nitty-gritty of the system and how best to make use of it, you need to go through a process of change management.
Change management refers to the process of strategically approaching the shifts to workflows and best-practices that come along with any major disruptions in the tools, strategies, or structure adopted by an organization. The goal is to both ensure the new process works at an operational level and is willingly adopted by the existing members of the organization.
This process goes beyond simply telling your team to adopt a new system. Make sure they understand the importance of what you’re doing and how it can directly benefit them and the organization as a whole.
In addition, don’t be afraid to let them voice their concerns and frustrations. After all, upending the best-practices and workflows that have kept your daily work life running for so long can be a scary thing. Attending to those fears can go a long way towards winning over the individual people in your organization so that they make a good-faith effort to learn and engage with the ERP system when the time comes.
With expectations set and the reason for the system now clearly understood by all the end-users, you can finally start showing them how your new ERP system works and how it can be used to revolutionize their workflows.
Even once this is done, training requires significant time and effort on the part of both the teacher and the end-users. Both parties will probably be expected to carry out their normal responsibilities during this process, so patience is a must.
While some vendors or external consultants provide training for certain ERP solutions, you want to make sure that you have an internal representative assisting in this process as well. After all, the true value of an ERP system comes with how it interacts with your organization’s unique capabilities and insights.
In order for the impact of an ERP system to truly be felt throughout an organization, it needs to be continuously supported by those who know the system best.
You should make sure your system administrator, developer, and any other relevant team members are prepared to update and maintain the system to keep things running smoothly. This might involve making sure the data stays organized and useful or hammering out bugs when a new update or feature is added to the system.
When it’s all said and done, you’re going to want to take a long, hard look at how the whole implementation went. Did you select the right vendor and packages for your specific organization and industry? Could you have spent more time training your end-users for a smoother transition period?
Either way, you answer these types of questions, it’s important that you continue to iterate upon and reach for even greater heights of success as you work within your new system.
Beyond that, it’s also important to evaluate the impact of the system on the business as a whole. Tracking the return on investment and how well your team executed against the initial goals and plans you set out for the implementation and adoption of the software overall can provide invaluable insight into the next steps you may need to take.
One of the most difficult things about successfully executing a plan for something as expansive as ERP software is making sure you’re avoiding inadvertent pitfalls that could undermine even the best-laid plans.
Even with a strong conceptual understanding of ERP systems and the implementation process itself, there are several things you need to remain vigilant in order to keep everything on track.
Before anything else, you need to realize one crucial thing: implementing an ERP software takes time and money. A lot of it.
Unfortunately, this fact is often lost on members of an organization who aren’t well-versed in both the investments required and the potential gains of an ERP system. Due to the intensely competitive nature of many industries, there may be extreme pressure to produce results quickly and save money while doing so.
Without an in-depth conceptual knowledge of what it takes to get an ERP system up and running, it can be easy to focus on short-term costs without considering the potential for long term return on investment.
Ultimately, the people who know your business needs are you and your colleagues. ERP vendors and consultants can be invaluable resources during the implementation process, however, like with any business, they have a vested interest in you spending as much money with them as possible.
This isn’t to say that you should ignore the advice consultants give you. Far from it! Instead, make sure you understand their business orientation and have done your research before agreeing to add any extra services or applications to your contract.
While ERP systems primarily function by automating workflows and coordinating business initiatives, you don’t simply want to make your old operations' best-practices faster.
The implementation of and migration to an ERP system offers most businesses an exciting opportunity to revamp their existing processes and create a new set of best-practices that can vastly exceed your organization’s ability to meet customer needs and improve interdepartmental communication.
It’s surprisingly easy, when caught in the whirlwind of implementing a large and complex software system like ERP, to completely neglect the needs of the end-users.
The process of implementation requires that you and your team develop a deep understanding of both the concepts and systems with which you are working. Not so for your other colleagues.
Make sure you take some extra time to translate the high-level concepts into an easily digestible training curriculum that approaches the process of learning an ERP system from the perspective of a complete novice.
Failure to do so can result in poor performance on the part of the end-users and drastically reduce the overall return on investment for your system.
While it’s true that vendors can sometimes try to offer more functionality then is strictly necessary, that doesn’t mean you’re absolved of all responsibility when it comes to selecting the correct type of ERP system, or even the correct packages and modules within the system.
Something very few people talk about is that many failed ERP implementations happen because the company that’s selecting their future system doesn't do their due diligence in the process of selection.
Whether this is due to an overreliance on the vendor’s consultants or pressure from senior leadership to reduce the implementation timetable, the failure to accurately and objectively evaluate the merits — and even the fundamental compatibility — of a potential ERP system can be disastrous down the road.
How do you think senior management is going to react when, halfway through the implementation process, the system you spent hundreds of thousands of dollars on is incompatible with your business processes or data? You need to do your homework, and do it well.
The key stakeholder is a position on the team for a reason: you need them to add legitimacy to the sweeping changes you’re going to bring to your organization with the implementation of an ERP system.
Internal politics has ever been the bane of efficient work execution, and having early advocacy from leadership can go a long way towards avoiding this from ruining implementation.
Furthermore, even though they might not have a direct hand in the nitty-gritty technical aspects of the process, securing the support of the relevant key decision-makers from the get-go and being thorough and transparent when it comes to managing their expectations can go a long way to afford you the time and space you need to make sure the implementation goes without a hitch.
This may seem obvious, but in order for your ERP system to function properly, you need to make sure that every relevant element of your business has been integrated and accounted for by the time implementation has neared its completion and has reached the hands of the end-users.
It can be easy to focus on the technical aspects of software implementation such as app development, user interface, and security, which are certainly vital or the success of your system. However, it’s also imperative that you develop a comprehensive understanding of the various aspects of your business that will need to be automated and, conversely, what will be better served by remaining manual.
ERP software provides the most value by being able to provide an unparalleled amount of visibility into the demands of your business and broader industry through a cross-section of data pulled from various teams and departments. Failure to integrate the knowledge of one could mean skewed and inaccurate results for the rest.
The process of undertaking a huge project like the implementation of an ERP system can be extremely daunting. Not only do you have to familiarize yourself with a variety of different concepts, vendors, and your own business, but you have to practice a variety of crucial project management skills as well.
While there are numerous pitfalls and setbacks that can cause your project to run aground, the best practices, plans, and common mistakes contained within this article should provide you with a solid foundation upon which to build a new period of growth and opportunity for your organization.
Make sure you’re prepared to tackle any and every challenge when it comes to migrating your company’s data during an ERP implementation. Failure to do so can result in far-reaching consequences to your productivity down the road.
Piper Thomson is a former Content Marketing Associate at G2. Originally from Cincinnati, Ohio, they graduated from Kenyon College with a degree in Sociology. Their interests include podcasts, rock climbing, and understanding how people form systems of knowledge in the digital age. (they/them/theirs)
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