Enterprise Resource Planning (ERP) is a software solution designed to streamline business processes and increase efficiency. Whereas, ERP systems integrate a wide range of data from multiple sources and provide real-time visibility into the organization’s operations.
ERP implementation is no small feat, often involving teams of professionals and months of preparation. To ensure success, it’s important to have an in-depth plan that outlines each step in the process. In this blog post, we’ll discuss the essential elements of an ERP implementation plan and provide tips on how to keep your project on track.
What is an ERP implementation?
ERP system in your organization affects all departments, including finance, human resources, sales, and manufacturing. ERP implementation is the process of planning, configuring or customizing and deploying an ERP system throughout an organization.
To ensure your implementation runs smoothly, consult key stakeholders before and during implementation so your entire organization is prepared for change. The process of implementing an EPR system often takes months as it involves cleaning up existing data and migrating it to the new system.
What is the ERP implementation process like?
The ERP implementation process includes installing your software, transferring all financial and transactional data, mapping your processes, and training your users to actually use the software. This process determines the success or failure of your ERP implementation.
So where do we start?
We created this guide to help you plan your ERP implementation from start to finish. Packed with real-world advice, expert tips, and quick step-by-step break downs, we cover:
• How to implement an ERP system in seven easy-to-follow steps pace.
• Develop an effective change management plan (and who should help you implement).
• Hidden ERP implementation costs and how to do it they predict.
• Migrate existing data to the new ERP system.
• Go live, and how to measure your success project.
It (unfortunately) doesn’t implement your ERP for you. However, it will provide you with information, resources and templates to fully understand the implementation process and increase your chances of project success.
Isn’t it almost as good?
The benefits of ERP systems
ERP systems offer many benefits to businesses. By integrating all aspects of a company’s operations, ERP systems can provide accurate and up-to-date information on inventory levels, production costs, sales revenues, and more. This real-time visibility into key business metrics can help managers make better informed decisions that drive improved operational performance.
In addition to providing actionable insights, ERP systems can also help businesses automate and stream line their core processes.
For example, many ERP systems include modules for accounting, human resources, and customer relationship management. By consolidating these disparate functions into a single system, businesses can eliminate inefficiencies and duplicate data entry across departments.
Finally, ERP systems can improve communication and collaboration between employees by providing a central repository for information. With an ERP system in place, all members of a team can have access to the same data and documents, which can help reduce confusion and miscommunication.
The costs of ERP implementations
The costs of ERP implementations can be significant, and vary depending on the size and complexity of the organization. Small businesses may be able to implement an ERP system for as little as $50,000, while larger organizations can expect to spend several million dollars.
The largest cost is typically the software license, which can range from a few thousand dollars to several hundred thousand dollars. Other significant costs include hardware, consulting, and training.
The risks of ERP implementations
ERP systems are increasingly being adopted by organizations in an effort to improve organizational efficiency and competitiveness. However, ERP implementations can be complex and risky under takings. This section will discuss some of the risks associated with ERP implementations.
- One risk of ERP implementations is that they can be disruptive to business operations. The process of implementing an ERP system can be time-consuming and expensive, and it can require changes to business processes, which can disrupt normal operations. Additionally, the implementation itself can be disruptive, as employees may need to be trained on how to use the new system, and there may be downtime while the system is being installed and configured.
- Another risk is that ERP implementations can fail if they are not properly planned and managed. Because ERP systems are complex, it is important to carefully plan the implementation process and ensure that all stakeholders are adequately prepared for the change. If the implementation is not managed properly, it can result in cost overruns, schedule delays, and software that does not meet expectations.
- Finally, even successful ERP implementations can have negative consequences if they are not used as intended. For example, if an organization uses an ERP system to automate manual processes without changing the underlying business processes, they may find that their overall efficiency decreases rather than increases. Additionally, if an organization uses an ERP system to centralize decision-making authority without considering how decisions will be made at lower levels in the organization.
The key success factors for ERP implementations
There are many factors that contribute to the success of ERP implementations. Here are some key factors to keep in mind:
- Define the business objectives and scope of the project.
- Assemble a team of experts with knowledge of the business and technical aspects of ERP systems.
- Develop a comprehensive project plan that includes all phases of the implementation, from system selection to go-live and post-implementation support.
- Manage expectations by communicating regularly with all stake holders throughout the project.
- Be prepared for un expected challenges and have contingency plans in place to address them.
- Leverage the experience of other successful ERP implementations to learn from their mistakes and best practices.
What are the steps of ERP implementation?
- Assemble your ERP project team: Plan who should be on the team to ensure your implementation runs smoothly across all departments.
- Create an ERP Change Management Plan: Determine how to help your team migrate from legacy systems during implementation.
- Estimate your ERP implementation budget: What should be your ERP implementation costs and hidden costs you may not have anticipated.
- Start data migration: Migrating data from the old system to the new system requires a plan – start here.
- Train your users to use your ERP: This is how you decide how much training each system user needs.
- What to do during your ERP go live: You’re ready to go live with your system – how to make sure everything runs smoothly.
- Evaluate the success of your ERP project: You have completed your ERP implementation – has it been successful?
1.Form an project team
First things first: plan it yourself this is going to be very painful. Creating an efficient and dedicated ERP implementation team will make your job a lot easier.
To get started, you will need the following “core” members.
• Project Manager: Lead You probably have.
• Application Analyst: Responsible for data migration and clean.
• Application developer: responsible for system customization.
• QA Test Engineer: Leads system testing and performance effort.
But to make sure your implementation runs as smoothly as possible across all departments (and avoid having your entire workforce write your carefully crafted plan as “IT tells us what to do”), you need more people.
These largely depend on who your key stakeholders are – and due to the nature of ERP, these vary from company to company, depending on the functionality you’re implementing.
Here are some examples of stakeholders involved when implementing different features:
|Stakeholder||Function of interests|
|Senior management||Analytics, reporting, BI|
|Accounting||General ledger, accounts, asset & cash management|
|Engineers & shop floor staff||PLM, production scheduling, document management, designs|
|Shop floor workers||Document management, inventory, designs|
|Sales department||Forecasting, BI, CRM functions|
|Warehouse staff||Inventory, WMS, SCM, mobile device integration|
Should I hire an ERP implementation consultant?
Short answer: yes, if you don’t have the in-house technology and can afford it. An experienced implementation consultant has seen it all before and can fix problems before they arise.
However, a successful implementation can be done without people
– don’t despair if you’re short on budget or your accountant is notoriously tight-lipped.
How long does an ERP implementation take?
There is no rush to implement ERP. Your ERP will touch every function of your business, so it’s important to take the time to plan and handle the changes you’ll bring to your business. Typically, ERP implementation takes 4 to 8 months, but this can be shorter or longer, depending on the complexity of the project.
For smaller companies, you may find that you have a shorter implementation window using the out-of-the-box system, which may mean your implementation only takes a few months. In contrast, for global organizations with customizations, multiple locations, currencies and languages, more complex implementations will take longer—maybe years—to successfully roll out company-wide and implement the system.
2.Develop a change management plan
First, you should plan your ERP implementation in stages and delegate it to your implementation team based on their expertise.
We have a detailed ERP implementation timeline template here – but you can use the checklist below to get a quick idea of what needs to be done. Before you start implementing, you should have the following plan in place:
• Forecast implementation costs and develop budgets.
• Develop a timeline for ERP implementation.
• Migrate data to the new system.
• Train your ERP user base.
• Test your ERP and go live.
• Daily go-live events.
• Evaluate the success of your project.
Tools like Trello, Google Sheets, and Wrike are great for collaborating on projects like ERP implementations – browse and choose the one that best suits your company’s project management style.
Second, you need to plan ways to keep the business on-site during implementation. Change always brings some level of disruption, but it can be minimized by:
- Clear communication of any anticipated disruptions.
- Allow sufficient time for user training.
- Consider the needs of key stakeholders (you’re halfway there Already have this, including proxy in your project team).
3.Predict your costs and design a budget
What is the cost of ERP implementation?
This is a golden question. If this question were easy to answer, there would be far fewer budget-bloated ERP implementations and far more people volunteering for project management.
According to a recent analysis by Softwarethinktank:
• 35% of ERP implementations are 0% to 25% over budget.
• 15% over budget 26% to 50%.
• 6% exceeded budget by more than 50%.
This shows that overall more than half of ERP implementations are over budget. Of course, budgeting is a minefield and you have to be very careful. However, some costs can be defined.
A good starting point is to assume that the cost of implementing ERP is at least 1% of the company’s total annual revenue.
You should then factor all of these factors into your implementation budget to avoid being affected by hidden costs:
- Hardware/Network Upgrade: If You implement an on-premises system.
- Employee Overtime Pay: Important to Remember – “We No overtime pay, sorry” is not a sentence will be appreciated by your team.
- Supplier training, customization and consulting fees: if You are lucky, your provider may have included these in Initial software price, but it’s definitely not given. check often.
- Data backup and storage: These are often associated with Cloud ERP costs – but again – always check.
How much you can pay for ERP depends on a number of factors including company size, needs, and number of users, but a recent 2022 Software Paths report found that companies spend on average around $9,000. users of each system.
Tip: For the most accurate results, you should also plan for lost productivity—because no matter how hard you try, you won’t be running at peak efficiency during implementation.
4.Start migrating your data
You have planned as much as possible. Now is the time to start the actual process of migrating your business to the new ERP.
Data migration is the first step – if you do it right, you have a solid foundation on which to continue the implementation effort. If you get it wrong, things start to fall apart.
Your application analyst should lead the effort because it is their specialty. Get ready to help them:
• Data cleaning and validation.
• Database settings.
• Map old data to new database fields.
• Data transfer to the new system.
• Test and validate legacy data.
• Test and validate new data inputs.
5.Start training your user base
User adoption is the key to the success of an ERP implementation project, and a proper user training program is critical to achieving this goal.
There are different ways to train your staff; however, most training methods can be divided into “face-to-face” and “e-learning” methods:
|In-person||Ensures all employees attend through compulsory sessions||Difficult to coordinate across large workforces, especially with shift workers|
|E-learning||Easily customized to specific roles; easier to coordinate than in-person training||Encouraging employees to complete on top of regular work can be difficult|
Tip: Identify promising, tech-savvy employees who can be trained to become ERP power users. You can then work on low-level user questions so you can focus on the task at hand.
Why not try participating in your training program for the best results? In the Talent LMS study, 89% of respondents said a points system would increase their engagement, while 62% said leaderboards and the ability to compete with their peers motivated them to learn. Use it to your advantage.
Those small perks (free meals, an extra hour of lunch) and larger perks (cash bonus, extra day of PTO) for completing training tasks on time to the top performers make training more appealing to busy employees.
6.Plan and launch your ERP rollout That’s it
If you think that getting married requires a lot of tedious forward planning, you’re going to be unhappy with the “go-live” phase of your ERP implementation.
Things to plan for include:
• System testing (before and after go-live) .
• Staffing plans, including required overtime or temporary worker .
• Identify indicators for project evaluation .
• Develop a communication strategy for system downtime .
• Verify network speed and reliability .
• Data backup process Communication is key, whether with your team or with wider workforce. you have to know who it is what to do, when do you want it to be done, what to do a downtime For more information on the go-live phase of an ERP implementation, see:
• Five aspects of planning a successful ERP rollout.
7.Evaluate the success of your ERP implementation project
Start with these simple questions:
- Is your company bankrupt?
- Has your ERP supplier been sued for breach of contract?
- Are you trying to Budget?
If so, you’re probably not doing well. Give yourself a high five.
To dig deeper, consider using a combination of the following metrics:
- Give in. Do you see a return on the money you spend? your ERP?
- Reduce human error: a well-implemented ERP should do this Reduce data errors through process automation. if your Training programs work, and employees should most of these functions .
- Increased productivity: it goes without saying Has the ERP fully achieved its goals? Do?
- Improve customer satisfaction: there is throughput time Elevated? Are you processing orders faster?
Am I ready to implement ERP?
hope! However, it is best to remember that implementing ERP is a major undertaking and should not be taken lightly. To ensure a successful ERP implementation, you should ensure the following:
- Plan your ERP implementation thoroughly: Don’t underestimate the time it takes for your system to be up and running in your company. Taking an extra month to plan and make sure your data is clean and ready for migration, and making sure your team is ready for new processes and systems, can save you implementation time in the long run before you’re ready .
- Make sure your teams are supported and properly trained: One study found that 95% of companies with failed implementations spend only 10% of their total budget on ERP training and support — not among them. Failure to adequately train your team reduces your company’s involvement in your (very expensive) projects and the actual benefits you get from the system.
The challenges of ERP implementations
Any ERP implementation is a complex and challenging endeavor, regardless of the size or scope of the project. Numerous factors can contribute to the difficulties faced during an ERP implementation, including unrealistic expectations, inadequate resources, lack of senior management support, and resistance to change.
One of the biggest challenges is getting everyone on board with the new system. Change can be difficult for people, and they may resist using a new ERP system if they are not properly trained on how to use it. It is important to have a dedicated team in place who can help train users and resolve any issues that arise.
Another challenge is ensuring that data is properly migrated from the old system to the new one. This can be a time-consuming and tedious process, but it is essential to ensure that all data is transferred correctly. Inadequate testing can also lead to problems down the line.
Finally, it is important to have realistic expectations for an ERP implementation. Many projects run over budget and behind schedule due to un foreseen circumstances. It is important to plan for contingencies and allow adequate time for testing and training.
The people aspects of ERP implementations
One of the most important aspects of any ERP implementation is the people involved. From the project manager to the CEO, every member of the organization must be on board with the new system. Here are a few tips to ensure a successful ERP implementation:
- Assign a project manager: This person will be responsible for overseeing the entire implementation process. They should have a good understanding of both business and IT processes.
- Train your employees: Employees must be properly trained on how to use the new system. Make sure to provide adequate training materials and allow plenty of time for employees to become comfortable with the new system.
- Communicate with everyone: Open communication is essential for a successful ERP implementation. Keep everyone in the loop on progress, changes, and issues. This will help avoid surprises and keep everyone on track.
- Be prepared for change: Change can be difficult for some people. Be prepared to deal with resistance and help employees through any challenges they may face during the transition.
The technical aspects of ERP implementations
ERP systems are complex, and their implementations can be even more so. Here we’ll take a look at some of the technical aspects of ERP implementations that you should be aware of.
First, it’s important to have a clear understanding of your business processes before starting an ERP implementation. Otherwise, you run the risk of implementing a system that doesn’t fit your needs. To get a clear picture of your business processes, it’s often helpful to create flowcharts or process maps.
Once you have a good understanding of your business processes, you can start looking at ERP systems. There are many different ERP systems on the market, so it’s important to do your research and find one that will fit your specific needs. When evaluating ERP systems, pay attention to things like the system’s architecture, scalability, flexibility, and integration capabilities.
After you’ve selected an ERP system, the next step is to start planning for the implementation. This is where things can start to get technical. You’ll need to decide how you’re going to roll out the new system, what kinds of training will be necessary for employees, and how you’re going to handle data conversion from your old system to the new one.
All of these decisions need to be made before you can start the actual implementation process. Once everything is planned out, though, the actual implementation should go smoothly.
In conclusion, an ERP implementation plan requires careful planning and consideration of all potential pitfalls. By understanding the importance of a successful implementation process and developing strategies that address each stage, companies can ensure they make the most out of their investment in their new system. With the right guidance, any company can reap the full benefits of an ERP software package with in a short period of time.