How to go about a proper ERP implementation?
By A R | 09 Feb 2019 | Recent, Technology, backup, Business, Popular,
Enterprise Resource Planning software is a critical and essential tool for any organization today. A properly planned ERP implementation goes a long way in bringing out efficiency in operations of any organization.
Here are things that must be kept in mind in order to ensure a tight fitting software solution ensuring that you get the most bang out of your buck.
Step 1- Business Requirement Gathering
The most basic of the steps, this phase has the most profound and long-lasting impact on the entire project. Generally handled internally by the IT department of the organization, the idea is to collect requirements of management from every level of your organization.
Broadly any organization can be represented by this pyramid where the C and the D Level management occupying the top of the pyramid, mid-level occupied by senior department managers and the frontline occupied by managers of teams on the field. Having said that, Its okay if your organizational structure does not fit this pyramid. The point is to identify the different layer of management which is going to interact with the system. You’ll notice that the requirement and style of interaction with the system will vary from each level and department
One of the best ways to get the ball rolling is to identify one user of each management level from every department and try to understand from them:
- How do they currently interact with the system, for eg, the features that they use from the current system?
- What do they feel is missing from the current system
- And lastly, what would they need the new system to do for them.
The requirements collected in this exercise should then be grouped categorically as requirements that the new system:
- Must meet: Features that are critical for the day to day business operations of your organization. Highest priority.
- Should meet: These are features that are mostly missing from the current system. These features, when incorporated, could improve the operations and business processes. Important.
- Could meet: Mostly a wishlist, with minimal impact on the productivity of the system. These must be assigned the least priority
The requirements should be collated and signed off by every department in the organization.
Now is also a good time to identify the budget for the project and the timeframe to achieve deployment. An average ERP project takes up to 90 days (ballpark) to get fully deployed.
Once this is done you have concrete requirements as per priority to work on.
Step 2 - Software Selection
Once the requirements are frozen, you can float the tender and start inviting RFP from vendors of various makes and brands of ERP developers. Note, that depending on the vertical of your organization, you may need specialized modules like inventory, manufacturing, logistics, machinery maintenance, construction, HRMS, ETC along with general modules like GL, AP, AR. In most cases, there is always a brand which caters to your segment its a good Idea to start looking from there.
Another aspect to keep in mind during the software selection process is the mode of deployment. Locally, as in on a Server on your office premises or off-premise hosted on the cloud. Both of them have their own pros and cons.
On-premise deployment adds the cost of a server and network infrastructure hardware and installation as one-time cost and their independent maintenance as recurring cost.
Cloud deployment means no hardware and networking costs, only a subscription fees to be paid monthly (could be quarterly too, varies from vendor to vendor).
So on-premise deployments attract one-time payment and then recurring costs as maintenance Upside being that you fully own the system (and hence are responsible for its maintenance too) and cloud deployment means no one time cost but a lifetime subscription payment commitment in return for not having to maintain any network or server infrastructure.
Having clarity on which mode of deployment can help you further qualify the competing software.
Last but not least. Check the skill availability for the software in the market too. By this I mean, any ERP that you select, must not be so obscure that it's hard for you to find people to work on it or to provide you support.
Step 3 - Selecting System Integrator
Here is a golden rule with you, an ERP is only as good as the team that deploys it. Due diligence must be taken when you select a vendor. Check for the experience that the vendor has, where they are located as timely support is critical. Remember, the big company brings with it the power of infrastructure but You may never be a priority for them, too small a company, you have to priority but you may face difficulties because of the small team size. The trick here is to find the middle ground. Seek a vendor who is hungry for success but is also stable. Has experience and is also available for quick service.
Step 4 - Deployment
By this stage, you have already identified the ERP make and a reliable deployment partner to take the project ahead, it is now time to start the deployment of the new ERP.
Start with requirement mapping, where you will match the requirements generated internally (remember the must-have, should have and could have?) with the features of the selected software. Don’t worry if not of your requirements aren’t being covered “as is” by the new ERP. This brings us to the Gap Analysis. In this step, the deployment partner may propose “workarounds” and in some cases, “customizations” in order to completely cover the requirements of your organization. This stage is a good Idea to discuss any new requirements which may have come up since the initial requirement gathering exercise.
As long as the requirements are minor, the deployment partner generally rolls with the punches and incorporates them in the schedule, but in case the requirements require a major change, in that case, it's back to the drawing board with costs and efforts. (that’s why I said in the beginning, requirement gathering really does have a profound impact on the entire deployment process)
Once you agree on the gap analysis and the proposed solution to resolve them, you can finally get started with the configuration of your shiny, brand new system. This involves data migration from old to new systems and setting up workflows and rules. Different ERPs handle this differently and are undertaken primarily by the deployment partner with your inputs from time to time.
After all, this is done, we can start the User Acceptance Trials. This stage brings out a model user from each department on your organization and tests all the use case scenarios as detailed in the requirement document. Based on the results of the UAT, after some tweaking, you have a functional ERP at your organization.
All is not done though, we still have to account for end-user training. The best practice is to select power users from each department and give them extensive training on the new ERP. These power users can then conduct internal training within their organization, albeit, with occasional hand holding with by the deployment partners and voila, you are ready to go.
What happens to the old system? How to transition to the new system?
Best practice in the industry mandate that both systems be used parallelly for at least a month before phasing the old system out completely. We do this to iron out any unplanned teething issues with the new system while at the same time insulating the day to day business operations from disruption. This step is not compulsory but highly recommended.
So this is it. If you follow these steps, your ERP deployment is going to be a smooth and painless experience.
Evomatiq Business Solutions LLC is a trusted, lithe and boutique enterprise software service provider based in Dubai. We help businesses get the most out of their enterprise software like ERPs, CRM, Business Intelligence tools.