ERP success is hard to come by. The multitude of pitfalls, risks and landmines on the ERP implementation journey are difficult – but not impossible – to navigate. To complicate matters, most organizations only replace their ERP systems every 10 or 20 years, which doesn’t create enough internal experience to effectively manage these issues.
The sliver lining in all of this is that most organizations make similar mistakes along the way. To simplify matters even more, most of the issues and risks are related to people and processes – not technology.
Below are five things that you will want to make sure you’re investing in to increase the odds of a successful ERP implementation:
Project governance and controls. You’ve probably heard at least a story or two about an ERP implementation that flew off the rails because it wasn’t managed properly. Too much customization, delayed go-lives, budget overruns – all are symptoms of a deeper root cause: poor project governance and controls. Your project charter should ensure tight project controls, decision criteria, escalation procedures, roles and responsibilities of the executive steering committee along with other processes in place. It’s not enough to simply have a strong project manager. You need a solid overarching set of controls to ensure your project stays on track.
Business process management. Complex business transformations, such as ERP implementations, typically involve material changes to business processes. However, not enough organizations take the time to define both current and future state processes in enough detail to be effective. Once the meter is running with your expensive functional and technical software consultants, taking the time to define and reengineer business processes can be a very costly and ineffective proposition. After all, there is no need to rush business process decisions while being rushed to make software configuration decisions. Instead, take time to get your business processes right – even if that means delaying the official start of your ERP implementation. It will save a lot of time later on.
Organizational change management. The “people” side of the equation is the most difficult part of any business transformation—and ERP implementations are no different. It’s one thing to invest in end-user training and some basic employee communication, but these activities only scratch the surface of the organizational change management issues that will need to be addressed. For example, organizational readiness, change impact assessments, benefits realization and stakeholder strategies are all important – and often overlooked – aspects of ERP implementations. You’ve spent a lot of time and money on your ERP implementation, so consider organizational change management a relatively low cost insurance policy to increase your odds of success.
Thorough project documentation. There is simply too much to keep track of during an ERP implementation. Your project charter, “to be” business processes, system design and a host of other decisions made during the project all must be thoroughly documented to keep everyone in agreement and to maximize knowledge transfer from your ERP consultants to your internal team. Without it, your project is more likely to leave quite a bit of business value on the table than to deliver business benefits. This is especially true for high-growth companies or those going through acquisitions. It is much easier to integrate new operations into your business if your business operations, system configurations and other key project deliverables are clearly defined and documented.
Outside expertise. Don’t try to take on an ERP implementation alone. There is simply too much that goes into projects as complicated as these to rely on your limited experience. After all, your organization (hopefully) only has to replace its ERP system every 10 to 20 years, so that’s not much repetition to gain the necessary skills, experience and battle scars. When looking for outside ERP consultants, make sure to find a team that is objective, well respected in the industry, possesses a comprehensive implementation methodology and is scalable to meet the growing needs and complexities of your business.
ERP implementation success isn’t as evasive as it may sound. Investments in a few key areas will dramatically increase the odds of your project succeeding. It may be easier said than done, but focusing on the above five areas is a good start on the path to ERP success.
Though smooth ERP implementations are possible, every implementation entails a certain level of business and technical risk. Download our white paper Ten Tips for a Successful ERP Implementation that outlines some of the most common ERP implementation challenges that organizations face as well as tips for avoiding unforeseen costs, timeline overruns and material operational disruptions.