Without adequate planning, any effort you attempt could fail to meet its potential. This is especially true for an ERP implementation.
We’ve previously discussed the importance of ERP project planning, but there’s one tenet that often goes overlooked: defining your ERP project scope. Read on to learn how to define your scope and why it matters.
What is ERP Project Scope?
ERP project scope describes the extent of a project. Based on your goals, you determine the high-level initiatives and functional areas that define the project. For example, you may want to focus on improving your manufacturing processes but work on your accounting processes at a time in the future.
Another reason to define scope is to ensure alignment before implementation. You’ll want to refer to your ERP vendor’s statement of work, so you understand all of the functionality and initiatives included in the project. This not only allows you to set realistic expectations for your budget and timeline, but it helps keep the project team focused on the right tasks.
The 2021 ERP Report
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Why Should You Define ERP Project Scope?
The dangers of not scoping your project cannot be understated. Given the opportunity, ERP scope will erode governance structures, project management strongholds and even the most diligent core teams.
Here’s one example of how a project can run amok without a clearly-defined scope:
An organization decides to move full steam ahead on a project without a defined goals or focus areas. As a result, several employees feel that their functional area’s requirements weren’t properly gathered because they didn’t have the opportunity to express their needs and concerns.
While change resistance can extend your project timeline by creating the need for additional change management, resistance can also expand project scope. How? Well, when employees aren’t happy with the new setup, they may ask for additional technology or software customizations.
Normally, you wouldn’t want to concede to too many of these requests, but if you didn’t include these employees in the selection process, then their requests may be completely valid.
3 Components of ERP Project Scope
1. Central Scope Statement
Your scope statement doesn’t need to be lengthy, but it should be detail-rich. In this statement, you should outline:
- Project goals
- Deployment locations
- Affected departments
- Systems to be replaced
2. Detailed List of Functional Areas and Requirements
What functional areas are you hoping to automate and improve with your new ERP system? A few of the most common functional areas organizations include in their project scope are:
- Human resources
- Supply chain management
- Sales and marketing
- Customer relationship management (CRM)
Once you’ve defined each functional area, we recommend breaking it down even more by listing out your functional requirements. For example, do your warehouse managers need to be able to access real-time inventory data on their mobile devices?
These details might seem cumbersome to list individually, but organizing your business requirements in this way helps you evaluate potential ERP software.
3. Change Approval and Authorization Procedures
Even the best-defined ERP scope isn’t immune to change. There may come a point when you need to implement additional technology to fulfill your requirements or customize your core system to meet an unforeseen requirement. If that time comes, there should be clear protocols to follow.
We recommend outlining how you plan to govern change requests. Be sure to outline details such as who can request a change, who has the authority to approve it and what should be considered when deciding what changes to approve.