Implementing a new ERP system provides a major opportunity to digitally transform your company. Not only can you move past the limited functionality or outdated technology of your legacy system, but you can also leverage modern ERP system capabilities to help you seize new business opportunities.

However,  not all implementations go smoothly. So how do you set your company up for a successful ERP implementation? How do you avoid unnecessary costs and risks? These ERP implementation best practices can help you avoid common pitfalls and realize the benefits of your new ERP system more quickly.  

Evaluating ERP systems

If you haven’t yet selected a new ERP software, get tips for evaluating your next system.

Where should you start your ERP project?

When people think about system implementations, they often start by considering desired features. But new features or technologies are not the core issue; what a business needs for growth is modern business processes. Only with effective processes that allow you to be agile and responsive can you boost your competitiveness and better serve international customers.  

Often, existing processes are inflexible and don’t meet company needs. Even when proven and cost-effective processes are in place, they often need to be updated to meet evolving needs or be enhanced with new capabilities, such as mobile access, alerts, and business intelligence. So, it’s important to always keep those processes at the core of your implementation plan.

What’s the biggest success factor? Your project team.

Case study after case study of ERP implementations tell the same story: the make-or-break factor is the implementation team. Great software is only great if implemented by a strong team. If people lack the time, support, or skills to do the job effectively, they will not be successful – and the project will likely suffer from delays, additional costs, and/or software that fails to meet the company’s needs.

Case study after case study of ERP implementations tell the same story: the make-or-break factor is the implementation team.

Companies that have experienced ERP setbacks or failures have often assigned staff who “had the time” to work on the project. But to be successful, you need to recruit the people that “you can’t do without.” These are the busy people who know the business processes, work well with other members of the organization, and have the respect of executive management. Dedicate these people to the project full-time (40 available hours), or as many hours as possible per week.

Add no one to the key project team who can’t dedicate at least 25% of their time (minimum 10 hours) to the project every week. Team members spending less than a quarter of their time will merely be able to catch up on project activities but will not add value to the project.

Executive support for your team is also critical. In every major implementation, decisions must be made regarding priorities and resourcing trade-offs. Without strong support and commitment, even qualified teams can flounder.

Getting a modern ERP system implemented quickly is one of the most significant things a company can achieve. It’s worth dedicating your best people and laying the foundation for success up-front.

How to plan your ERP implementation

Schedule the implementation sequence realistically. Consider the availability of your leadership team, managers, and in-house experts who contribute to the effort.

Prioritize your needs so you can focus on the big wins while building a core software and technology base that can expand with your business needs.

Your detailed plan and KPIs will be tailored to fit your specific requirements. However, the following key activities are common steps in all successful implementations:

ERP implementation planning
The main steps involved in ERP implementation planning
  1. Select a software and services partner to help in implementation

Your project team is probably not very experienced in implementing ERP software so they will need help. Research and select a qualified ERP implementation consultant resource(s) with intimate knowledge of, and experience with, the ERP application you are going to install. Confirm that they understand how the new software solution supports your current and evolving business processes. Interview their references to verify this.

Your software and services partners should have staff trained in your industry and available for your locations. If you have international customers and suppliers, your partners should have the multinational business, language, and currency skills to streamline your implementation.

Finally, review the project management software that a firm uses to make sure that it is compatible with your internal planning, scheduling, and tracking system.

  1. Detail all project tasks

Your implementation partner will help you develop a detailed task list of everything that needs to be done. This list will be extensive. Training alone, for example, includes many tasks:

The list of tasks should be divided up into phases. Time should be allocated for the conference room pilot, customizing the application, integration to other applications and data sources, infrastructure implementation, data cleansing, user acceptance, and so on.

Your implementation partner should be able to supply a detailed list of all the phases and steps required.

  1. Calculate work hours

Carefully estimate the amount of time it takes for each and every task. Do this by understanding the task and the work involved, and then assign the number of “work hours” required. It can be a range of hours, but it needs to be accurate. Add up the work hours for each phase of the project and assign the person responsible for getting it done.

This can be a daunting task; that’s why it’s important to involve an implementation partner familiar with the software solution. If you do this step well, you’ll be able to accurately calculate your timeline, determine if you need any help outside of your current team, and limit scope creep.

  1. Create your realistic schedule

Now that you have tabulated the work hours available and required, a manageable schedule can be created. In many cases, the first pass reveals a capacity problem when compared to the implementation timeframe that was originally presented to executives.

Here is an example calculation that illustrates the potential discrepancies:

The result? Go-live date is missed before the project begins. Here are some possible solutions:

This is where the executive management team will be required to make the decision. It’s just one example of why they should be involved in the software selection and implementation process.

  1. Conduct a conference room pilot

Once the project has been kicked off, and before you go live, conduct a test run or a pilot (in a conference room) before full roll-out. This conference room pilot will ensure that you have the proper business processes in place for the current and future needs of the company. As you design your new processes, it’s important to understand the range of options available in your ERP system – and to validate your processes with the project team and stakeholders from the user community.

In this multi-week phase, your implementation partner will install pilot software that allows you to test-drive all your processes and make sure that they work as expected, with no surprises. Often, you can apply best practices to save time, particularly if you have the configuration tools to make cost-effective adjustments as you refine your operations.

  1. Cleanse your data

It sounds simple but data cleansing is a very time-consuming activity. It’s best to start assessing your data accuracy as soon as possible because it takes a great deal of effort to complete this step correctly. During the project, business process changes will occur – so be prepared for additional data management steps during the implementation.

  1. Keep everybody informed

On a weekly basis, a staff member should contact all of the key stakeholders so that they know the positives and “not so positives” of the implementation project progress. The worst scenario is when people are not kept up to date and are taken by surprise.

Most good project management systems have visual representations of the project’s progress.

Start with the processes that matter the most

Not all businesses have the same issues, so it’s best to review your business processes and prioritize which ones to address first. Here is a list of high-value areas to consider: 

Tips for mitigating implementation risks

All projects have an element of risk involved but below are five valuable tips for improving your chances of an on-time, on-budget project completion.

  1. Select software, business process, and implementation partners with industry and local know-how. Always interview references in businesses like yours.
  2. Don’t stretch outdated technology beyond its limits. Eliminate old, outdated, standalone systems and, as much as possible, consolidate your data into a single database (single version of the truth) with built-in business intelligence for multinational performance. 
  3. In the digital economy, businesses must often integrate systems across business units as well as with customers and suppliers. Confirm that you have cloud integration capabilities and expertise with supplier networks.
  4. Avoid project scope creep. It’s common to discover needs and opportunities during an ERP implementation, so it’s important to manage change orders to avoid delays and cost overruns.
  5. Confirm that you have consistent expertise across all your locations. You need training, implementation, and support – often from a combination of local management, software distributors, consulting firms, and your software partner.

Tips for avoiding extra ERP implementation costs

A new ERP system investment includes your company’s time commitment, business process and implementation consulting, software, and cloud services as well as computer, tablet, and phone equipment – so it’s important to control the project and the costs.

Here are some key areas to track:

When is your implementation complete? 

Once your initial implementation is live, you will still need the flexibility to add additional capabilities for your business. Many changes can drive these opportunities, such as new locations, product and service lines, and acquisitions. 

Digital transformation also provides additional opportunities for you to team up with customers and suppliers to redefine how business is done in your industry. Often, these projects include new technologies, such as machine learning and artificial intelligence (AI), as well as integration with equipment and vehicles using Internet of Things (IoT) technology to improve speed and efficiency.

Ready to take the next step?

In every ERP project there will be unexpected issues – so expect them in yours. But, by following best practices for a successful ERP implementation, you can identify and address them as they arise to effectively manage your risks and costs. 

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