It’s easy to get pumped once you’ve selected new ERP software as part of your organization’s digital transformation effort. Typically, the team is ready to move on from that old system and hopefully excited about the possibilities that modern technology can bring.
But too often, organizations rush from phase to phase without a concrete plan. They don’t realize that the transition from selection into implementation is arguably the most important part of their entire project. More than any other stage of your project, this phase will determine whether your plan is successful, your budget is realistic, and your business benefits are attainable.
So instead of jumping in, spending a ton of cash up front, then having the meter start running on expensive technical software consultants, it’s important to have a smooth and thought out transition from selection into implementation. Here are five things that you must do during this critical stage to make your project successful:
1. Define a Clear Program Plan
Software vendors/consultants are generally good at installing and configuring software, but they generally aren’t as good at all the other key components required for your project to be successful. For example, organizational change, business process reengineering, data migration, and user acceptance testing are areas commonly not addressed by software consultants, so your overarching project plan needs to fill these gaps. Think of the proposed timeline provided by your software consultants as just one input that you will modify and add to, as part of your overall program plan.
2. Assemble Your Internal and External Project Team
You should spend considerable time defining and assembling the resources that will support your project implementation. This should be done well in advance of software consultants arriving and the billing clock ticking. You will want to make sure that you have a team with documented roles and responsibilities, including a project manager, core team, subject matter experts, and executive steering committee. You will also want to verify your needs and thought process with an independent ERP consultant. This is to avoid being beholden to simply accepting resources that your vendor or software consultants might recommend.
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3. Define Project Governance and Controls
ERP implementations go sideways quickly if not managed tightly, so it is important to have very clear project governance and controls in place. You will want to take the time to define how decisions are made, who approves customization, how scope requests are managed, what to do when the software doesn’t exactly fit your needs, and a host of critical decisions that can make or break a project mid-stream. This is a very commonly overlooked and misunderstood need, so enlist independent ERP consultants (such as Panorama) to help define this governance and scrutinize this framework (based on best practices from other organizations and other ERP projects). Companies on average make major system changes every ten years or longer, so don’t feel guilty about calling in independent thinkers who do these ERP projects daily for a living. To use a sports analogy, if you’re not practiced, skilled, and in tip top shape, you’re probably not expecting to enter the football game as the quarterback.
4. Engage in Business Process Management
Software vendors may say that software will drive your business process improvements, but that is a myth. You and your employees will drive business process improvements – not your new ERP software. Yes, the software will tell you how exactly business transactions will occur, but only you and your team can define how you would like your business to operate in its future state. Plus, ERP software is too flexible to provide one answer to any given process, so you will need to define your business processes preferred modus early on, otherwise, you will be paying for expensive technical consultants to sit and wait while your team is trying to decide how your business should run. This is an area where a company like Panorama can help as well. I always encourage companies to be able to confidently explain what their competitive advantages are, and how their processes support future growth.
5. Develop an Organizational Change Management Plan
Organizational change management is the #1 cause of ERP failure, so it is important to have a clear strategy and plan in place before your implementation begins in earnest. Be sure to define the change impacts as part of step #4 above, which will provide the foundation for the overarching organizational change strategy. I have yet to meet a CIO, CFO, or IT Manager who said they wish they would have spent less time on organizational management activities. Err on the side of doing too much here, and we can give you some creative ideas of how.
Bottom line: you are in control of your ERP and digital transformation endeavors, so be sure to manage accordingly. You own the project, so deploy the best internal and external resources you can. Don’t be rushed to prematurely start the project before you are prepared, and don’t hesitate to call a time out if it doesn’t feel right. This is a big decision and a risky project with a lot at stake, so it’s important to control the quality as well as the tempo of the project early on.