ERP Implementation project requires an investment of time, money, and effort. It impacts almost all processes in the organization when you choose to drive your organization to steadily progress towards its strategic goals and objectives in a time-bound way.
The task of ERP implementation is to adjust and automate the processes in your organization that will facilitate its progress towards achieving its desired future state.
A project that impacts the business processes cannot yield expected results without detailed planning and preparation. This post’s focus is on preparing for planning a successful ERP implementation.
The most important aspect of executing a successful project is that you should be clear about the primary objective for implementing the ERP – the “Why.” It is essential to lay down the tracks that give direction and purpose to the project. It also aligns with the thought process of the leadership of the organization.
Your business strategy, goals, and objectives should dictate your investment in IT. Since requirements are the sum of known issues and aspirations, losing focus on them cannot be afforded. It is a list of problems that ERP needs to solve and incorporate processes and workflows to reach the desired future state. All stakeholders should record all their requirements well before the hunt for a solution starts.
An ERP project is an investment that demands a lot of time, effort, and money. An executive sponsor who can adjust business priorities and mobilize additional resources when needed is vital to its success. Someone with authority needs to drive the project. Right from the preparatory stage, you must be clear about who will lead the project.
A project of such a magnitude cannot succeed unless it is backed, supported, and directly involves top management. People who are the lead actors in the project by nature resist change. No one wants to step out of their comfort zone. The direct involvement of top management demonstrates a clear commitment to the project in terms of objective, direction, and resource mobilization.
Unless the message across the organization is clear that the project is a priority for the growth of the organization and each individual in it, cooperation and action from participants shall remain lukewarm. Everyone needs to have a clear understanding of
Why does the organization want to implement the ERP system?
What will the system do?
What are the benefits it will bring? And
What to expect during the ERP implementation process?
Clear communication and a collaborative approach are essential to building this mutual understanding at the organizational level.
No great project ever succeeded without a great team. Setting up a strong project team is critical. It shall be a core team of subject matter experts from all major functional areas of the business. A person of authority should head this team. It should also include individuals who will lead the project-specific functions like the management of
The project,
Communications related to the project and
Necessary changes in the organization’s work culture to facilitate acceptance.
Core Team members should be both knowledgeable and highly respected within the organization. It is necessary because, during the implementation, the team must be able to resolve conflicts and mediate between different groups within the organization. It may also need to make decisions about mid-course corrections in the ERP implementation plan if circumstances so require.
Authorize and approve requirements from all functional areas of the organization.
Authorization of the requirements should conform to the organization’s business strategy, project objectives, and business goals.
Evaluation of requirements enables the core team to gain a perspective on cross-functional dependencies. It helps them to adjust workflows and processes across the organization accordingly while defining the requirements.
Because of the expertise required by the project management functions, less-resourced companies may need the help of an outside consultant to overcome these challenges.
Every project requires a roadmap to succeed ERP project is no exception. A roadmap for the project needs a clear and exhaustive understanding of the organization’s requirements.
Clarity about what you want to accomplish from the project and which processes need to be improved is essential. ERP implementation is also an opportunity to improve processes and not simply to automate an existing inefficient one.
The primary responsibility of the core team is to define the requirements of each functional area of the business.
It will be input for the blueprint of the scope of work when the project starts. There should be absolute clarity about existing pain points, limitations, and adverse effects.
In addition to existing pain points and limitations, there should be clarity regarding the aspired future state that conforms to the organization’s business strategy and goals. For example, these goals might be to:
Automate processes to save time and reduce costs
Improve your ability to respond better to customers or business opportunities
Become a data-driven organization and enable better analysis across the business.
Requirements also enable the identification and definition of key performance indicators (KPIs) for the business to measure the success of your ERP implementation.
A manufacturer may want to improve:
The cycle time,
The inventory turns,
The demand forecast accuracy,
The order backlogs,
The lost opportunities,
The dispatch delays,
The sale returns,
The input costs, and
The equipment downtimes.
And for a retailer, KPIs might include total sales, profit margins, average purchase value, sales per square foot of the retail outlet, and inventory turnover.
Whereas for a service provider, KPIs might include the cost of customer acquisition, cost-of-service delivered, revenue-per-service delivered and revenue per customer, etc.
There is no magic bullet. But, experience in the field of ERP implementation suggests that the key is to focus on the non-technology aspects of your ERP implementation. After all, how so ever good the technology solution might be, it is the men who will be doing the hard work in the project.