There are two things that all ERP implementation project managers should know before the implementation process begins:
Twenty-one months is an enormous amount of time for businesses to experience constant change and transition—so, why do they choose to take on implementing a new ERP system and how can that process be made easier?
According to our data, 71 percent of potential ERP buyers are looking to invest in a new ERP solution because they require an integrated system between their HR, accounting, and manufacturing modules, while 31 percent say they’re looking to invest because their current system is not being capable of handling the business workload.
These results highlight two trends for the reasoning behind ERP investment:
Putting these goals into action over a long period of time isn’t easy—and companies that aren’t careful in their implementation risk being one of the 50-60 percent of organizations that Gartner says are being held back by their own ERP initiatives (content available to clients).
Here I’ll go through three of the crucial ERP implementation steps that all businesses must execute in order to achieve ERP implementation success.
I interviewed Jonathan Gross, Managing Director at Pemeco Consulting, and Jeff Carr, founder and CEO at Ultra Consultants to understand how businesses can better focus their ERP implementation steps, and address the challenges above.
1. Review your business processes before implementing a new ERP
Reviewing business processes may technically be a step that precedes the actual implementation of a new ERP, but it’s a vital step in making sure that the desired effects of the implementation project come to full fruition. This step allows organizations to identify areas where they can save money and increase efficiency by eliminating business processes that either don’t fit the organization any more, or will be unnecessary once a new ERP has been implemented.
Gross recommends that business leaders ask themselves the following questions before eliminating any business processes before implementation:
- Will my business realize benefits from these changes?
- Will those benefits outweigh the costs of implementing an ERP solution?
- Can my business leverage the benefits of those changes during the ERP project?
Carr also recommends conducting a comparison and analysis of the business ‘before and after’ before implementation. He says, “Rather than a focus on converting the current state to a new ERP system, the project focus should be to use this technology to drive business value improvement. We’ve found that failing to fully understand and document the current state and the desired future state is the single biggest reason ERP projects fail.”
2. Design an airtight change management plan that caters to people, processes, and technology
58 percent of those affected by ERP implementation have described the changes involved as very difficult or difficult. When teams aren’t fully informed of how the ERP implementation will affect them, it’s likely you’ll lose buy in and experience resistance both pre and post-implementation.
While the main focus should be on effectively inputting change management throughout the ERP implementation steps, the implementation process also provides a good opportunity to initiate further changes within the organization.
Gross believes that good change management covers ‘people, processes, and technology‘ and includes detailed information about the following:
- Project governance
- Project and risk management
- Training and communications
- Process reengineering and testing
- User adoption.
Instead of viewing change management as a phase, Carr encourages organizations to weave change management throughout the project, being sure to take into consideration specific team cultures.
Carr believes that leaders should devise an airtight change management with plans that include activities and phases that achieve the key objectives listed in the graphic below.
3. Your communication plan needs to be effective and timely
The Project Management Institute’s 2017 Pulse of the Profession Survey reports that the two main causes of failure of strategic initiatives were a ‘lack of clearly defined objectives‘ and ‘poor communication‘.
During this step, businesses should reflect on the results of the first implementation exercise listed here—once certain business processes have been reduced, and the future state of the business has been defined, the capabilities and expectations of a new ERP solution can be communicated effectively.
Carr says that, “All parties must have insight into what the new ERP system will mean for their departments, and for the entire organization. Communications must stress the new capabilities, new processes, and the expected value after implementation. Change only follows when there is shared understanding”.
This supports the findings in Gartner’s report “Create Expectations About Success With Postmodern ERP, Don’t Just Manage Them” (full content available to Gartner clients) on expectations within ERP initiatives—the research found that between 50 to 60 percent of ERP initiatives are “compromised in some way by the same organizations undertaking them. This results in a gap between end users’ expectations and the delivered reality”.
Gross believes that a good communications plan should serve six purposes. It should:
- Make ERP initiatives visible to the entire organization
- Define a structure for messaging and content
- Define the structures, media, and methods to disseminate communications
- Establish structures to encourage feedback and collaboration
- Create stakeholder and business partner awareness
- Facilitate management of a complex, cross-functional project.
Carr also defines a good communication plan as one that acts as more than a ‘blanket plan’ with rough timescales and project plans for the whole organization. Instead, he believes that there are several ways in which an organization should be kept abreast of updates, goals, and project dates. He suggests that business leaders employ the following three communication plan methods:
ERP implementation steps: what to do next
If you haven’t already started the ERP implementation process, and are still in the stages of weighing-up which ERP software is best for your business, check out: