ERP Implementation: Secrets of Success
During the recession, many ERP (enterprise resource planning) system implementations have been put on hold. Now that we are emerging from the recession, companies are beginning to think about implementing – even if not a full implementation, they are considering upgrades and/or implementing specific functionality to help the business run more efficiently. Thus, understanding how to implement successfully is vital, as no one can afford to spend more money or resources than required. And, most importantly, it is important to be one of the 20% of companies who achieve the expected results.
In the last 20 years, I’ve implemented countless systems, ranging from full ERP implementations to specialist software implementations such as transportation management. A few secrets to success have emerged during that timeframe. Most companies do not follow them, as they cost upfront; however, in my experience, the total project cost is significantly lower and/or the results achieved are far greater. The secrets include: 1) Select the best core team. 2) Focus on processes. 3) Integrate training with daily business processes.
- Select the best core team – This is always a significant issue, as the business must continue to run while the implementation preparation occurs. Thus, you need your best people dedicated to the implementation while you also need your best people running the business. Not a simple dilemma! The best companies begin preparing in advance with cross-training and by adding resources into the organization. However, that isn’t enough.
The best organizations also emphasize teamwork. It is critical that the leaders ensure that everyone works together. There is no way to simultaneously run the business and focus the energy required to have a successful ERP implementation unless leaders leverage each person’s strengths and encourage teamwork.
- Focus on processes – One of the largest mistakes I see companies make when implementing ERP systems is ignoring processes. Typically, the thinking goes something like this, “our new ERP system is set up with best practices, and we want to take advantage of these best practices”. Of course it’s a good idea to leverage best practices; however, it will not be successful if not thought through with current processes. How will you transition from current to new? What non-system processes should be considered? How do you handle exceptions?
In every ERP implementation, one of the best ways to ensure success is to focus on common exceptions. It’s surprising how often it’s not considered, as the exceptions are commonplace. For example, what should the user do if he/she makes a mistake when shipping an order? Or receives too much product? Or receives it in the incorrect unit of measure?
- Integrate training with current business processes – Last but not least, there is nothing more important than providing not only excellent training programs but also integrating the education with the their current daily work processes. Otherwise, their entire daily routine will be turned upside down, which typically leads to unintended results of poor service, lost customers, poor efficiencies and low morale. And, unfortunately, once a customer is lost, it is nearly impossible to get them back. In my experience, if it’s possible to get them back, it not only takes a long time of providing consistent service but it also typically requires lowering prices – and therefore margin.
The best way to ensure that the training programs are integrated into daily processes is to run in parallel. That can be expensive, and so the next best way to achieve this objective is to run a full test with current daily processes. For example, instead of testing with practice data when entering work orders or invoices, use the real data for that day and enter into the new system. By running through a few of these types of tests, enough real life examples will arise – exceptions, issues etc. That way, implementation issues can be addressed prior to go live, and the user will understand his/her new daily routine with the new system.
Although implementing systems can help a business achieve significant results, it can also destroy a business if not successful. Implementing these secrets to success can ensure you come out on the right side of that equation.
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