Implementing Enterprise Resource Planning (ERP) software can seem a daunting task at first glance. Indeed, if the first glance (i.e. the sales pitch) is all you have to plan by, you’ll soon find your company lost in the process and flailing about in a quagmire of distractions and hefty technicalities.
Think about it for a moment, the sole and entire reason for ERP implementation is transformative – to take your company processes ‘as is’ and convert them into ‘what is.’ In some ways, the results of your efforts, then, depend on your definition of ‘is.’ See, confusion exists already.
Not to worry, your ERP implementation can be mapped out into a series of best practices that will keep you firmly on track and out of the realm of bizarre verb translations and vague instructions.
Begin with the understanding that ERP software implementation is a continuous process with continuous returns. There is, in fact, no end. Once you grasp this concept fully, the pressure to ‘finish’ will disappear and your goals will become more progressive and easy to reach because you start thinking in terms of precise objectives rather than simply hurrying to be ‘done.’
Divide by Function
The second thing you need to understand is that you should not attempt to do everything at once. In fact, a well cited best practice is to break ERP deployments into manageable chunks of activity according to function and phase.
"In certain global and complex organizations there is already a trend emerging in which ERP software instances are split by functions," says Amit Sen, director and practice leader, Patni Americas’ Business Consulting Services group. "This will gain steam as companies optimize further by functions and develop market readiness for M&A opportunities. ERP applications will be broken up according to finance, order management, supply chain, and project management functions."
"We will see a resurgence in ERP activities in many areas, including master data management, predictive analytics, global instance management (consolidation or distributed architecture), and business activity management," adds Sen.
It makes sense to divide your ERP implementation into phases and prioritize them by the functions your company needs most, or will deliver the quickest payback.
Process Processes Precisely
The third thing you need in place is a business process evaluation. It is a mistake to make the ERP system fit around your existing business processes if said processes are out-of-date or simply out-of-whack. It is also a mistake to change your processes simply to accommodate a new ERP system. Remember that the entire point of the ERP exercise is to transform your business, so transform it by first evaluating and revising your processes. Be brutal. Update, purge, replace, etc as needed. If you don’t optimize your business processes, ERP software will only help you be more efficient at doing things poorly.
"Evaluate and re-evaluate the business process as a whole, not in terms of ‘what I do, day -to- day’ but when one process ends and another begins, ‘how does this impact’ my department or does my business process negatively impact the next business unit in the company?" advises Rebecca Williams, program manager at Tachi-S Engineering, USA.
"Working in a vacuum, leads to ‘downstream problems’ later in the software implementation. Most business managers, directors and executives don't take into consideration the ‘entire process’ only what is important to their specific bottom line," says Williams.
"Therefore, in the end, the bottom line could be a negative impact due to an unforeseen change or changes to another important business process that was overlooked," she explains. Williams warns that such could lead to ambiguous requirements and scope creep due to backing up to include the missed processes. This leads to "the ‘ultimate project sin’ as a result of scope creep, increased cost!" she says.
When you are done with overhauling your processes, simplify the results so that you can make the best use of the business system. In other words, cut away any excess in your newly transformed business processes. Put a point on that arrow before you load it on the bow.
Who’s on Top?
There are two remaining factors that must be in place prior to a business system implementation if you are to see success and a sizeable return on investment (ROI): executive support and sufficient resource allocation over the entire scope and duration of the implementation project.
If top management loses interest and fails to support the project, the ERP implementation will get sidetracked and adoption rates throughout the organization will suffer. This will ultimately lead to project failure. The same is true of resource allocation. If there are insufficient resources behind the implementation and maintenance of ERP, progress will be slow and results poor. Make sure these two factors are in alignment before proceeding.
That said and done, you are now prepared to begin implementation. Here are the best practices to make your job smoother and the results bigger and better.
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