Have you ever wondered why you keep hearing about failed Enterprise Resource Planning (ERP) implementations? Is this a reason why you are avoiding your ERP upgrade or the implementation of a new ERP system?
Over the last ten years I’ve worked on many projects implementing Microsoft Dynamics 365 Business Central (formerly Dynamics NAV). I have witnessed projects being extremely efficient and others fairly fragile – both taught me some lessons. This blog will outline some factors I consider to be indispensable for a prosperous ERP implementation.
Select a Suitable Squad
In order to implement an ERP system, it is crucial to select a suitable crew. Focusing on this first factor for a moment, you have to become aware of three fundamental characteristics: resources, planning and enterprise. Let me explain this in a little more detail.
Relevant People for Relevant Processes
When it comes to resources it is vital to involve relevant people for relevant purposes. Whatever aspect you want to implement, you have to connect with the people that provide expertise in this particular matter. We call them Subject Matter Experts (SME). If you have highly specified operations, you probably have some people that are familiar with the processes and the daily routines. This is what we mean by SME. Quite often a team member is more aware of these things than a team lead is.
A Dedicated Project Manager
Planning is paramount. Without someone keeping the big picture in mind, your implementation will most likely fail. Thus, make sure to have a dedicated project manager (PM) with insights into all different areas of your company and awareness for its structure and processes. A PM should not be a SME at the same time. SMEs need PMs to escalate upcoming issues and moreover a conflict of interest may occur if the implementation of a subject must be delayed or cancelled. Too often the value of a PM is underestimated by customers.
A Supportive Management
The decision to implement an ERP System is an essential one for all kinds of enterprises. No matter how big or small a company is, the support of the enterprise’s management is of utmost importance. No ERP system can ever be implemented successfully if the companies C-level does not fully encourage it or distrusts the SMEs and PMs. A few times I have witnessed staff members doubting or rejecting an ERP system due to the lack of support by management. So, make sure that the enterprise is with you.
In the end all components will work hand in hand. SMEs provide detailed insight into their specific subjects. PMs merge and evaluate the different aspects and identify issues or flaws to control. Management supports wherever needed and contributes to the success by giving SMEs and the PM the time and resources they need.
Focus Your Scope
As soon as your squad is ready it is time to consider the scope. Scope refers to the aspects and processes of your business that an ERP system should encompass. When it comes to scope one thing is strongly recommended: simplicity.
Keeping it Simple
Implementing an ERP system is much more than just another IT project. An ERP system will (re-)structure your company and have an impact on the way your employees work. Therefore, you must become aware of the fact that implementing and thereby changing too many aspects at once may affect the productivity of your business. You should evaluate the amount of change your business needs and the amount of change your business can handle at the same time. What I mean by this: focus.
Prioritize aspects you must realize and identify crucial processes. Try to separate them into phases. Find out what is absolutely necessary for your business to function, identify the features that are just “nice to have” and set up a timetable. Is it important that invoices are documented properly and generate the correct ledger entries? Is it essential that a label in the warehouse fits a certain layout from the get-go?
Configuration Before Customization
Try to avoid customization/development and focus on configuration. Every enterprise is unique, but all enterprises share similar needs. ERP systems are created to fulfill those needs in whatever way using configurable built-in functionality. In the process of the implementation, make sure to understand the way the system works and thereby find out how it can be configured to reflect your processes. Or adapt your processes. If customization is necessary, try to limit it to the essentials.
Tailor-made features are time-consuming and time is money. Always consider the lifecycle of a customization: design, develop, test, document and potentially upgrade. Far too often I’ve watched effort escalate quickly from a small change to huge development, most often because not all implications were considered from the start. Quite often this culminated in exceeded budget and delayed schedule.
I don’t want you to neglect things your business needs in order to thrive. Simplicity suggests focussing on those things that are the most important for your business and include them in a first phase of implementation and postpone noncritical functionalities.
No one really likes surprises, especially in the daily work routine. Therefore, the last piece of advice I’d like to give you is this: try to avoid surprises for anyone, including yourself.
Implementing an ERP system can and will fundamentally change and optimize the way employees work. But the process of implementing will have an impact as well. From my experience it is imperative to inform and involve all of the affected teams as soon as possible. Prepare them for the modifications the ERP system will have and communicate the additional workload they might face during the process, as week as during the go-live phase.
Too often customers obliterate the necessity to participate in analysis workshops or trainings, to test configurations or customizations, to train power users or end-users, to install and update appropriate SOPs and to provide first-level support during the go-live phase. As a rule of thumb, you should consider that you and your squad will need to provide 2 to 3 times the budgeted time that we have. So, if we assume an amount of 100 hours for the completion of the project, then you should prepare your teams to invest a total of 200 to 300 hours.
It is discouraging to not feel or see progress. To become aware of progress a team needs benchmarks. In an IT project those benchmarks are the expectations and goals that you absolutely need to define. The nature of these expectations and goals is to be precise and most importantly to be measurable. Only if you install these milestones, you can reach and pass them.
Meet expectations rather than face surprises. Prepare your team and your company for the upcoming challenges when you plan and start the implementation of your ERP system. Keep them updated during the process. Celebrate with them when milestones are reached. And throw a party when the system successfully goes live.
Every ERP system is as unique as the company implementing it. Thus, the process of implementation is different every time. However, over the years I have been able to single out some of the common denominators:
- Avoid the avoidable by connecting with Subject Matter Experts (SME)
- Plan the plannable by nominating a dedicated Project Manager (PM)
- Simplify and focus the scope by prioritizing subjects and processes by separating them into phases
- Configure the system and adapt your processes before customizing it
- Build and meet expectations by early and constant communication
- Celebrate your successes
Crawl, walk, run. Make sure to challenge your business, your team, and yourself, but make sure not to break any of them.
If you have any questions about ERP implementations, please contact us.
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