Companies are rapidly turning to an automated business management system to streamline their efficiency and productivity. Ensuring rapid customer response is another impact behind the current development of ERP (Enterprise Resource Planning) trends. Implementing ERP software is not easy as there are thousands of solutions. Choosing the right helps to enhance all the business activities in a company and increases their success. This blog discusses the strategies for implementing the right ERP in a firm.
ERP Implementation Stages
Ensure that the ERP system chosen for a company meets its needs to have a smooth implementation. ERP implementation in a company is divided into six primary stages. These stages might vary and overlap, but mainly companies follow these stages.
Exploring and Planning: The organization forms a project team to fetch the requirements of the firm and problems an ERP system should resolve. The team is assigned to shortlist the vendors, issue requests for proposals, select the appropriate ERP system, manage the implementation, and ensure that the ERP meets the company’s requirements. Avoid shortchange preparation in the implementation of ERP to adopt the best ERP that suits your organization.
Design: The team evaluates the current workflows and understands how to change them with the new system. The ERP features needed for the company, the customizations needed and the data needed to migrate to the new system are analyzed through the workflow. Flexibility is important because administrators and business process owners responsible for day-to-day operations must be open to adjusting the way they perform their duties.
Development: The integration partner and the team works united to configure the software to suit business needs and prepare training materials and documents to prepare for deployment and start importing data.
Testing: Before going live, test the system and solve the errors and make the corrections in the mistakes. All ways an employee uses the system should be checked and make the system error-free.
Deployment: On completion of completed configuration, data migration, and testing, give proper training to the employees to use the system to make the working of the company more efficient.
Support: The project team confirms the user supports and assists in upgrading the system and troubleshooting the problems. If you have chosen an on-premises ERP system, dedicated IT resources for security, patching, maintenance, and troubleshooting are needed.
Top ERP Implementation Strategies
There are several strategies for implementing ERP, different having varied benefits and drawbacks. The purpose of the implementation of an ERP is the business success of the organization.
Most common approaches to implementation of ERP
1. Big Bang
The strategy is also known as the “single-step method”. In this, the users adopt the new system at the same time. To make this happen, the new system should be configured and tested, making it error-free. Along with that, proper training needs to be provided to all the employees to make the new system more efficient.
This approach helps to attain the ERP benefits faster.
2. Phased Rollout
In this strategy, the deployment of an ERP is done in phases, which take weeks or months. This approach is less risky than the big bang approach and allows the employees to get trained from initial deployment phases to its subsequent process. The drawback of the approach is that an organization takes a long time to achieve the full benefits of an ERP system and has to pay for two ERP systems at the same time.
Three approaches in a phased rollout.
• Use one ERP module, find errors and make solutions, and then tackle another phase.
• Start with core functions and then expand.
• Phased roll out geographically.
3. Parallel Adoption
With this strategy, the organization adopts a new ERP system in parallel to its earlier system. This is usually considered a low-risk approach because you can move back to your legacy system if you run into problems.
This approach helps to adapt to the new system slowly. However, parallel adoption is an expensive approach because more staff, time, and resources are needed to run two ERP systems simultaneously.
It involves all the processes mentioned above. In the Hybrid approach, ERP is deployed according to the needs of the company and through various approaches.
How to Select an ERP Implementation Strategy?
The ERP implementation strategies are different for different companies and it changes according to the needs of a company. The implementation strategy depends on:
The Big Bang strategy is suitable for small and medium enterprises, where you have the entire staff in one location and it helps to control the process of transforming the entire organization at once. This approach makes risk factors for large companies with complex organizational structures.
The business is affected in a worse way if employees are facing major problems when they start using a new ERP system. This makes more impact in the business while using a Big bang strategy. A parallel adoption is a suitable option to avoid this risk factor.
The implementation of a new ERP system using the Big bang strategy is cost-effective. While approaching all other strategies, the cost is high, as two ERP systems are used by a company at a time.
The desired pace of return on Interest (ROI)
By adopting step by step, you can release ERP modules that address specific business limitations and can create ROI relatively quickly. At the same time, in the Big bang, everyone is using the same integrated system and its benefits begin to be immediately understood by the organization. This helps to obtain greater ROI while the transition to the new ERP happens quickly.
ERP Implementation Tips
Obtain senior management buy-in: Without the support of good management in all departments, the implementation of an ERP is likely to be a failure.
Manage expectations: On the completion of the project, there can be hindrances as every project of this scope. Employees need to be realistic about the transition. Communication from the project team is a must in these processes.
Use the right KPI’s: The ERP system supports tracking key performance indicators (KPI’s) that enable the organization to measure developments and outcomes. But it is important to focus on the dimensions that make the most sense of an organization’s business goals, which means tracking sales growth or performance.
Consider the impact of customization: Companies look for customizations to enhance their business performance. With On-Premises ERP, extensive customizations make organizations restrict access to new updates and with SaaS ERP, customizations are allowed but it is expensive. Before submitting a custom code, carefully check whether the procedures can be configured; You may find yourself ending up with more efficient ways to get the job done.