Tweet When you search for "ERP" on the web, the sheer amount of information that comes up can be overwhelming—not to mention a little confusing.
The following steps have been the product of years of learning by different customer approaches and implementation methodologies and should be considered before, during and after any ERP implementation. These steps do not purport to be a definitive list or the exact recipe for success, but by reading and acting on only a few of the suggestions here will ensure your implementation goes smoother than it otherwise would have done.
Understand your incumbent system The decision to purchase a new ERP system has been made, but why?
There are many reasons a new ERP system will be sourced, but it is important to understand that the implementation of a new ERP system will not simply create a return on investment or solve the issues of the business.
These come from the process improvements; the ERP system is a tool and improving the way a business uses the tool can reap benefits. The process of implementation does not start with the initial inviting of suppliers to fill invitations to tender, it is when the company define the goals that the new ERP system will set out to achieve.
It is the goals that are critical, and should be referred back to during and after the implementation process to ensure focus is retained. If there is no clear goal, the process of selecting a product and vendor will be a futile process, whilst the overall situation may have improved this will bear no resemblance to the investment of time and money made, and in many cases the business would have been better off not changing.
Setting and defining these goals can be driven by the current system. The business may have outgrown the system, or the system may be non-compliant or non-supported, but whatever the reasons the system and the processes inside and outside of the system must be understood.
User-centric improvements focused on usability and deeper integration of analytical capabilities is at the core of leading systems. Additionally these figures need to be recorded over a period of time in the old system and then compared to a similar timescale in the new system after a period of stabilisation to try and prove any improvements; many businesses never record these figures and can never go back and justify an actual improvement even if one exists.
The success of your future implementation lies in the process and data of your current system. Study your current system at length and learn from it to take forward the elements you do well, change the ones you do not do well and enable you to statistically prove the success of the new system compared to the old one.
There may be industry verticals supplying specific software to meet the needs of your business, or a tailorable ERP system may meet the needs of the business, but the key is to investigate, find out what your competitors, vendors and customers are using. Many businesses send out invitation to tenders listing hundreds of questions filled in by potential vendors based upon an assumed set of answers to open questions.
Whilst these may assist in narrowing the choice down, the choice of software alone cannot be based upon these. It maybe that the software choice can be narrowed down, if it cannot get businesses in to present the benefits of the software they supply.
Once you can decide on the software to meet the needs of the business you need to choose the correct vendor, not simply the vendor who helped you define the software choice. Does the vendor have the ability to transform the business to help achieve the set goals? If they cannot the likelihood is they are not the correct vendor.
However there are other methods that can be employed to judge the suitability of the vendor. References must be taken, preferably with site visits and face to face contact. Can the customers acting on behalf of the vendor stand in front of you and tell you why you should choose the product and the vendor?
This endorsement will show how the vendor and customer act in a relationship, and this is a key concept to understand if you wish to purchase from the vendor, because if you do you will soon be in the same position as the reference extolling the virtues of the supplier.
Ask about the implementation methodologies; what standards are used and are these industry recognised, proven and successful in the field delivering tangible results? Any vendor seeking to develop a long standing successful relationship with you as a customer must be able to assist you in reaching your aims, and will be able to prove they have done this in the past and have the tools and resources in place to deliver a successful project.
If you cannot trust or work with the vendor then the project is very unlikely to be successful.
Therefore choose the vendor very carefully. Budget Control To be able to control a budget you need as a business to identify the real costs of ERP. These costs can include hardware, training, organisational change management, developments, staff cover for project members and the software.
The identification of a clearly defined budget scope is critical and difficult. The ERP supplier can provide a scope of services and a software and hardware budget, but this is not the entire budget. This can traditionally be data migration, modification work and attendance contingency.
These elements will be unknown at the start of the project, but should be estimated because they are critical to avoid significant budget creep. The non-budgeted elements are difficult to define because the breath of these areas vary greatly project to project and business to business.
However it can be said that almost all projects involve data migration and every project requires modification even if it is to the output documentation. Additionally there can be third party software costs, or non-related ERP software costs, or freelance consultant costs.
All of these need to be estimated and entered into the control Budget Document. The Budget Document is an evolving document as the project progresses and the estimates are known in greater detail.
Once the business has a budget, it needs to control it. This requires constant monitoring and change control where additional work is required. It is critical to establish Project milestones, key sign off points and compare the budget at each stage and more frequently if possible, to control the budget.
Active management of the budget is the only way to manage and control overruns and alterations to the project.Follow the "Proven Path" to successful implementation ofenterprise resource planning.
Effective forecasting, planning, and scheduling is fundamentalto productivity-and ERP is a fundamental way to achieve initiativeblog.comly implementing ERP will give you a competitive advantage andhelp you run your business more effectively, efficiently, andresponsively.
Enterprise resource planning (ERP) is the integrated management of core business processes, often in real-time and mediated by software and technology. Enterprise resource planning is a set of integrated program to manage the critical operations for an entire organization.
Learn about the advantages and challenges of implementing ERP. DOD’S ENTERPRISE RESOURCE PLANNING (ERP) SYSTEM IMPLEMENTATION EFFORTS HEARING DOD’S ENTERPRISE RESOURCE PLANNING (ERP) SYSTEM IMPLEMENTATION EFFORTS STATEMENTS PRESENTED BY MEMBERS OF CONGRESS Andrews, Hon.
Robert, a Representative from New Jersey, Ranking Member, The problem with the enterprise systems . What is ERP software? The key to understanding ERP software is to think “integration.” ERP software links systems across an enterprise to streamline workflow, share information among different departments, and provide insight into a business’s operations.
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