Insight

Enterprise resource planning - avoiding the pitfalls

January 2017


Ultimately, business is about profit. Get it right and ERP can move you towards that goal. However, too often ERP implementations disappoint and do not bring about the desired benefits. In this article we will look at some of the areas to consider when implementing ERP.

Do your groundwork

Preparing the ground for an ERP implementation is a vital step in the process. Skip this step and you will finish with an ERP system that doesn't meet your needs.

Choose the right ERP

Choosing the right ERP package is key. But to do this you need to decide what your objectives are. Take time to map out your requirements, not just current but future requirements too.

Once you understand your requirements make sure you control the selection process. Don't just choose the right system, choose the right supplier too as you will need professional after-sales support.

Making a return on your investment

An ERP implementation is an investment in your business; like any investment you need to see a return. Investing time up front will shorten the implementation time. A faster implementation will both heighten and quicken your return.

Make sure you are aware of, and understand, all the costs. It's easy to overlook such costs as licences and ongoing support. And if you negotiate a fixed price contract make sure it delivers your requirements and not the supplier's - buy the system you need; don't be sold the system your supplier wants you to have.

Get everyone onside

It is natural for people to resist change, so be prepared. Be proactive and sell the benefits to everyone. Communicate at every stage of the implementation and your employees will feel involved. However, resist the temptation to allow users to customise the system to fit their needs: they may customise it to perform the current outdated processes, not the new improved processes. Remember, you are trying to improve the business not just automate the way you've always run the business.

Have a plan and implement it

Start by choosing your project manager carefully; your project manager is the person who will make your ERP implementation happen. The first job for your project manager is to build a project plan. This is the roadmap by which your project team will navigate the implementation from start to finish.

You also need to allow your team to dedicate themselves to the project. If you expect them to divide their time between the project and their day-jobs it will take longer to implement. Remember, the quicker you implement, the quicker and higher your return on your investment.

You need to build your team with the right people too. This isn't about seniority; your project team should contain people who understand the business processes in the various departments.

Decide what data you will migrate to your new ERP system as well as what interfaces you will need with other systems. And document everything along the way. Storing vital knowledge in people's heads is high risk: they might leave, taking the knowledge with them.

Often management information reporting is an afterthought. Don't make this mistake otherwise you are asking employees to use and trust a new system without seeing any tangible output from their efforts.

Some people will leave during the implementation, so plan for this. One of the by-products of implementing an ERP system is you create experts in your business. Make sure you review how you reward these people: if you don't, someone else will.

Ownership of the solution

When you implement an ERP system you ask your employees to change the way they work. After all, optimising business processes and streamlining operations is the driving force behind an ERP implementation.

Users in every department should be made accountable and responsible for their parts of the system. You can only do this if you give them ownership; for employees to take ownership they have to feel involved in the implementation process. Training them to be users is not enough; you must make them owners.

In summary

Deciding to implement an ERP system is not a step you will take lightly. In doing this you cannot avoid:

  • disturbing employees by forcing them out of their comfort zones and training them to do their jobs differently
  • incurring a major cost, albeit a strategic investment in your business
  • disrupting the business while implementing your ERP.

However, look beyond this, invest the time and resource in getting it right, and ERP can revitalise your business and position it to cope with modern business challenges.