Let’s say you are about to choose and implement a new ERP system. You’re excited about the prospect of finally letting go of that old legacy system, and you and your team probably couldn’t be more eager to get started.
A lot of our clients find themselves in this exact situation after we’ve helped them select new ERP software. However, we typically advise them to slow down and take their time to build a solid foundation before embarking on implementation.
We do this for several reasons. First and foremost, companies with solid strategies and plans in place are much more likely to succeed. In addition, it costs them less money since the meter on expensive technical consultants won’t be running while these foundational activities crystalize. Finally, it insures that the project team has a clear sense of direction and expectations – which will ultimately make the project go more smoothly.
Here are 10-key questions to ask yourself before beginning your ERP implementation:
1. Do you have the right project team?
- You want the A players from your company, it’s that important. Identifying them and freeing them up can sometimes be tricky. Plan to backfill your internal resources who will be consumed by the project
- Add an independent external ERP expert as a collaborative additional resource. This will give you the best likelihood for success. This consultant will join forces with the team, and suggest best practices learned from other implementations
- Also identify other resources you will need, such as vendor consultants etc.
2. What will the project’s org chart look like?
- Project roles need to be clearly defined, along with reporting structures and relationships. There are many roles that have to be filled, so be sure your project organizational chart includes the project management, core team, functional, technical, organizational change, business process reengineering, and other key roles.
3. What will the total cost of ownership of the project be?
A common pitfall is to take a vendor’s software and implementation cost estimate at face value and assume it to be complete. It’s important to take it with a grain of salt, and add a dose of reality. In addition, you’ll want to make sure that you identify the variety of hidden costs outside the vendor’s purview before finalizing your “total cost” of ownership estimate.
4. What is the justification or business case?
Successful companies quantify their business case and estimate/project the anticipated return on investment. Forget the whole “we’re doing it because we have to” form of justification. Instead, be sure that you’ve analyzed and considered potential business benefits just as carefully as you have the costs. Senior management is going to be looking for quantifiable metrics, and these measures will impact their opinion of a project’s success or failure.
5. What is your overarching implementation plan?
Your vendor, VAR, or system integrator’s proposed project plans are incomplete at best, so you’ll want to make sure that you’ve identified the missing activities that they typically don’t cover – such as a comprehensive organizational change management plan, data migration, conference room pilots, and other areas that are typically outside the scope of software vendors. You’ll also want to validate the vendor’s proposed phasing and rollout strategy by benchmarking to other organizations, which is something Panorama can help with.
6. How will you integrate to other third-party systems?
Most organizations can’t address their entire spectrum of business needs via a single ERP system. Thus, it’s important to define how integration to other third-party systems will happen. In addition, it’s important to define an overarching solution architecture so you have a straightforward way to deploy a complete solution across your enterprise.
7. What organizational change management strategies and tactics will you deploy?
Most software vendors, system integrators, and ERP consultants are woefully underprepared to address the organizational change management activities required for a successful ERP implementation. Unfortunately, this is something you will need to address either with internal resources or an independent third party specializing in organizational change, such as Panorama.
8. What project governance and controls will you put in place?
It’s no secret that many digital transformation initiatives run off the rails largely because of poor project management and governance. Your project charter must clearly state what controls you will have in place, how decisions will be made, and what issues or decisions will be escalated to your steering committee. I’ve seen many projects in jeopardy because of over-customization, typically a governance issue.
9. What stage gates or milestones will you use to evaluate progress?
It’s important to take a step back to evaluate the project at regular intervals. Be sure to identify key milestones and criteria crucial to the project along the way. This will ensure that you make midcourse corrections before things get too far off track. Taking a step back, when needed is a sign of strength, not weakness. Don’t let project dates trump the importance of stage gate checks and actions.
10. How will you define success?
This is a tough one. Perhaps it’s insuring that your organization is better off than before. Perhaps it’s a specific ROI figure. Hopefully your business is now better positioned to handle future growth. Or perhaps it’s as simple as not getting yourself or anyone else fired because of the project. Whatever measures you use, be sure you define and communicate the goals to your team early in the project. A best practice is to celebrate “wins” as the project is progressing.
Some of these questions are difficult to answer and execute on. They also vary from organization to organization, so there is no one set of one-size-fits-all solution. The best way to cover all of your bases, is to find a qualified independent expert that can help define the answers and assist in ensuring that nothing critical get missed.