Our clients typically get excited at the conclusion of their ERP software evaluation and selection process. Momentum is high, employees are energized by the prospect of a new ERP system and are often ready to dive right into an ERP implementation.
A word of caution: don’t jump in too quickly without building a solid foundation first. Companies that prematurely begin their ERP implementations run into some common problems, including:
- Time and cost overruns, often caused by the software technical consultants’ meters continuing to run, while you finish making key decisions. There are many conclusions and issues to sort through before launching into implementation. Software technical consultants like to get in-and-out, so you need to control the pace between software selection and implementation.
- You may be more likely to use the new software to automate your existing processes if you didn’t first take the time for business process reengineering. Reengineer and streamline your processes first, then adapt to the software. Only customize when it comes to the important things that are differentiators for your business. Over-customization will haunt you monetarily and in other ways over the long haul.
- Take a step back and breathe. While the team may be excited, they are probably also exhausted after all the activities that go into selecting a software package. Debrief, continue to brainstorm the potential benefits and watch outs. The implementation phase needs a well thought out plan of its own and in many cases new/additional players may join in this next phase. Don’t forget to celebrate and recognize each successful phase with your team as it happens.
- Sub-optimal business benefits and reduced ROI can occur if the above three bullets are not taken into consideration.
Here are seven tips that will help ensure you don’t fall into common implementation traps:
1. Create your PMO structure
Your ERP vendor or system integrator will provide a “project manager” for the technical work, but what about all the non-vendor related activities? You will want to ensure that you’ve defined how your overall program and project management will oversee the various workstreams and decisions required for a successful project.
2. Define project roles and responsibilities
Every project and client is different, so there is no “one size fits all,” project structure. As the implementing company, you are responsible for defining project roles and responsibilities in a way that makes sense for you, so don’t feel compelled to defer to everything your vendor might suggest. Instead, define the roles and responsibilities, striking a balance between your internal competencies and bandwidth, the capabilities of your VAR and overall time and cost tradeoffs.
3. Make key strategic decisions regarding your implementation.
Implementations all have their unique challenges and characteristics. Before starting your implementation, you will want to realistically define your phasing strategy, integration strategy, data conversion approach and a host of other criteria feeding into how your implementation is structured. You will eventually want to translate this into your more detailed project plan, tying together all the various activities and resources involved in the project. Your implementation plan is a living document; change it when necessary and monitor it continuously.
4. Define your future state business processes.
A common misnomer (often fueled by software vendors) is the concept of letting their software drive your business process improvements. There are two problems with this approach:
1) There is no such thing as software “best practices.”
2) Software is too flexible for canned functionality to define business processes.
Keep these points in mind. Define your macro-level business processes first before starting technical configuration activities.
5. Develop an organizational change management plan.
Your project’s success or failure is much more likely to rest on how you handle the people side of the equation rather than the technical issues. It is also more likely to be more of a critical path activity, so it is important to have a clear organizational change management strategy heading into deployment. Start by conducting an organizational readiness assessment, which will highlight the most important change issues your organization is likely to face.
6. Define a clear data migration strategy and plan.
Data is another likely critical path item. The later you wait to start cleansing, mapping and migrating data, the longer your project is likely to take. Decisions you make regarding your data conversion strategy are very likely to directly impact the success, speed and cost of your project. Having a clear strategy and plan up front will be well worth your time and resources. Best practice: take the time to determine what data doesn’t need to be migrated before the conversion.
7. Develop a benefits realization plan.
Most executive teams and boards of directors are not forgiving of deviations when it comes to the risk, cost and time associated with large-scale ERP projects and digital transformations. It is imperative you have a clear benefits realization and ROI plan, translating your business case into a tangible plan. It should be transparent and understandable. If anything, this plan will help you save your job, if and when, the project runs into serious difficulties.Remember that this is your implementation project and you control the tempo. Your software vendor, VAR, or system integrator may want you to start the implementation right away so they can get the meter running on their technical resources. This is why it’s important to make sure your foundation is solid.
Most of our clients leverage the assistance of Panorama during the implementation planning process. Helping manage the overall implementation, including keeping all parties accountable from an outside perspective can be invaluable. We are well-experienced in mitigating disruption risks, and clever at assisting with mid-course corrections if needed.