In our experience of over 2,000 implementations, we’ve found that there are 12 critical success factors for an ERP implementation.
These best practices ensure your project has the right people, plan, and process to succeed.
If your C-suite supports the project, you will be able to secure the internal resources you need, when you need them for each step of the implementation.
- Seek your leadership’s input on project goals and budget before signing a contract with an implementation partner.
- Recruit one or more company leaders as project sponsors.
- Have that sponsor send internal messages to your company as a whole about the project early on. It’s important for ordinary staff to know leadership supports it.
- Return to your sponsor for guidance when difficult issues arise – especially with respect to budget or differing needs between departments.
SMEs Identified and Available
For your ERP implementation to be a success, the implementation team will need access to members of your company who have deep, hands-on knowledge of each business process the ERP will cover.
We call those knowledgeable people Subject Matter Experts (SMEs).
- Try to choose SMEs who are team members experienced “in the trenches” of your day-to-day business, rather than team leads.
- Identify SMEs early, and involve them in mapping business processes.
- Make those SMEs available to your implementation partner during configuration, training, and testing.
- Prepare your internal teams to provide a total of 2x to 3x the time budgeted from your implementation partner.
Some customers are tempted to try to take short-cuts to greatly reduce the amount of time needed from SMEs and other internal team members. Don’t. In our experience, all such short-cuts lead to serious pitfalls.
Learn more about ERP implementation risks.
Experienced Implementation Partner
We recommend you look for these 5 criteria in an implementation partner:
- Serves your business almost as an extension of your team. They are trustworthy, and look out for your best interests in the guidance they provide.
- Guides you skillfully through the change-management and user-adoption challenges your company will face.
- Has a deep bench of experience with the specific ERP product they will implement.
- Takes the time to understand your unique business needs, so they can fit the software to them.
- Can offer advice for your long-run roadmap with later ERP implementation phases or other business software.
At Encore, we are a Dynamics implementation partner with over 30 years experience helping customers leverage Microsoft business solutions to improve their businesses.
Your partner should provide a project manager (PM) for the implementation. The PM marshals all the different resources at the right times, and communicates regular updates to the stakeholders.
For very large projects, we find it’s also best for you, the customer, to assign a PM for the implementation on your team. In that case, the PM from your team should:
- Meet regularly with your partner’s PM to discuss project status and escalate important issues to the executive level.
- Contribute insights into all different areas of your company’s structure and processes.
- Make sure that your SMEs are available when needed.
Note: Your company’s PM for the implementation should not try to fulfill a role as an SME for the project at the same time. SMEs need PMs to escalate issues, and moreover a conflict of interest may occur if the implementation of their subject area must be delayed or cancelled.
Business Processes Mapped
One of the most overlooked contributors to success of any ERP implementation is documentation of your business processes.
This mapping allows your implementation partner to configure the solution to fit your current needs and help you leverage the solution to modernize some of those processes.
- Make initial maps of processes before engaging a partner. This saves you money and time during the implementation, although your partner may assist you with improving those maps as you go.
- Involve your most experienced frontline staff in mapping — they know how things really get done.
- Use diagrams for mapping: Visio or PowerPoint can be very helpful, although Word and Excel can work well too.
Simplicity of scope is one of the major success factors for any ERP implementation.
Too broad a scope — implementing changes in too many aspects of your business in a single project — makes the technical challenges of the ERP project less predictable. It also increases the amount of change your staff must absorb, and that can harm their productivity.
Distinguish your business-critical processes from the “nice to have” features your new ERP could provide.
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?
Implement the business-critical processes as phase 1. Break your ERP goals into phases, and save the “nice to haves” for a second or third phase. Treat each phase as its own implementation project.
Resist scope creep. During the implementation, new ideas and problems will arise, and you may be tempted to ask your partner to add “just one more feature.”
Your partner should not simply add everything you request, then bill you for the dev time. First, they should help you consider the technical, budget, and schedule consequences of each proposed change. They should also provide guidance on the most cost-effective strategic options for the long run.
See “Ongoing Communications,” below, for how to handle out-of-scope requests from within your company.
Realistic Budget & Timeline
Many organizations preparing to implement an ERP underestimate the commitment required — often because they think of it as “just an IT project.”
Implementation partners with less experience, or those who use a “set it and forget it” methodology, also may not fully assess the extent of the commitment needed up front.
At Encore, we believe your partner should empower you with all the information you need to properly budget and schedule for the implementation.
- Ensure your implementation partner provides gap-fit analysis between the product and your business needs up front.
- Decide on any customizations and integrations ahead of time. Those are often the biggest contributors to project cost and time.
- Incorporate training and other change-management time into your budget.
- Check that, for your SMEs and other internal team members, there are no schedule conflicts between their planned contributions to the implementation and their vacation or regular duties.
Configuration before Customization
A major factor in the technical success of any ERP project is whether your partner can tackle your problems by configuring rather than customizing.
Few or no maintenance costs
Maintenance costs during ERP updates
A skilled partner can configure the built-in functionality of an ERP solution like Microsoft Dynamics 365 Business Central or Finance & Operations to fulfill most business needs.
Your partner can also customize the solution to create unique functionality for your business, but in some cases your partner should advise against it. Each customization can be costly to create, and can lead to later maintenance costs for your ERP as a whole.
If customization is necessary, try to limit it to the essentials, and plan ahead for the full lifecycle of the customization, including documentation, initial testing, and recurring testing to be done after future updates of the ERP.
In order to get buy-in from staff members, it’s important to communicate regularly about the project to your whole company.
- Emphasize the vision and value of the project. Why does your company need this change? How will it help?
- Make information accessible by leveraging Teams channels, short video updates, or other tools.
- Encourage staff input. We have seen companies use regular townhalls to get the needed engagement.
Note: Encouraging staff input usually results in new feature requests, many of which will be out of scope. However, some of those ideas may be crucially helpful.
When you and your partner determine that a feature request is out of scope for the current project, consider adding it to a list for future implementation phases. This helps you control scope for this project, and demonstrate the value you place on candid feedback.
Change Management and Training
To succeed, your ERP implementation must transform the way many of your employees work. Helping them make those changes is just as important as the technical aspects.
- Make sure your executive sponsor recognizes (and shares with the company) the importance of dedicating time to training.
- Start training long before the implementation ends. Don’t leave it until go-live day.
- Have your partner “train the trainer,” so you develop a group of skilled early adopters and power users.
Important Data Defined and Cleaned
Your new ERP needs a certain amount of data to be useful for your staff on go-live day.
Decide what that data needs to include, and then make sure that data is cleaned and formatted for import into the new ERP solution. Your implementation partner can provide advice and templates here.
A key best practice for successful ERP implementations is careful testing by the customer before cut-over to the new system.
- Test every business-critical process touched by the new ERP.
- Test processes, not just tasks. For instance, make sure data flows properly from invoice to payment to inventory.
- Test edge cases. What happens if an invoice has an error? What if inventory gets lost in transit, or placed on the wrong shelf?
- Tailor the script to your business. The script for testing should be created by someone familiar with the business needs for the project and with your relevant processes. Your partner should not just hand you an off-the-shelf template and let your team test based on that.
Achieve Success for Your ERP Implementation
There are many different ERP products available in the modern market. However, the best practices for implementation are fundamentally the same.
Sadly, Gartner indicates that 20%-35% of ERP projects are seen as failing. Please plan carefully and collaborate with an experienced implementation partner to prevent that happening to you.
Encore Business Solutions is a Microsoft Dynamics implementation partner with more than 30 years in business and 2,000 implementations across North America. We also provide training and long-run support to our customers. Learn more:
To discuss your ERP project with Encore, contact us.
Read Case Study of a Manufacturer's Dynamics 365 Implementation with Encore
"We met our three project goals of 100% completion of critical business requirements at Go Live, completed with 90% Best Practices or better, and GO Live done in a timely manner."Read Case Study