ERP Implementation Overview

It is important to treat the procurement of an ERP system as a structured project, from the selection stage through to implementation and post-implementation activities. A dedicated project team must be formed which has the necessary skills and resources to fulfil the functions that will be required of them. It must also have the support of senior management, with one member of management acting as the point of contact for the project team.

As part of the project specification it is critical to set clear, business focused objectives. Define and quantify the process improvements that you expect to get from the new system and work towards them. This should be done in consultation with all the stakeholders in the company. A structured methodology should be defined, documented and followed in order to select a vendor. A sample methodology could look like the following:

1.        Project Specification and Consultation

2.        Document System Requirements

3.        Research Potential Systems and shortlist

4.        Invite Tenders

5.        Evaluate Tender Responses

6.        Evaluate Systems

7.        Choose Preferred Vendor

Avoiding the Pitfalls

Many ERP implementation projects are badly managed and companies do not see the improvement to their business that was anticipated. The is mainly due to a finite list of mistakes that companies make and in order to avoid falling into the same trap, it is important to be aware of these common mistakes.

• Poor budgeting and allocation of insufficient resources
• Lack of support from management to champion the project
• Poor project management from the project leader
• Insufficient Technical Support from IT department
• Not involving users in the consultation and evaluation process
• Insufficient consideration given to business process re engineering
• Unwillingness to involve consultants where knowledge deficit exists
• Lack of communication between key personnel
• Not giving due consideration to users resistant to change

  

Additional Requirements

In addition to ensuring that an ERP system meets your documented requirements and your budget constraints, there are other factors to consider when choosing a system. For systems that are very similar in terms of functionality, these can be used to determine the best overall solution by rating them or giving them a "score".

They are listed below; 

• Customisation - It is essential to be able to customise the software by adding new fields, tables and forms in order to allow the system to grow and react to changes within the business.

• User Interface - A logical user interface that is easy to navigate and allows the users to quickly get the information they need. This is especially important to the people in your business who will use the system the most, so they must be given an input in this area.

• Reporting Capability - ERP systems typically use one of the industry standard reporting tools such as Crystal Reports to provide their reporting functions. It is essential for an ERP System to have a flexible report writing tool.

• Stability - It is essential that an ERP system is a stable and reliable piece of software. If the software is regularly crashing it will affect the efficiency of your business, and increase the chance of your database getting corrupted and losing data. Do some research to see if the software you are thinking of buying has problems with stability.

• Maintenance & Support - The quality of the maintenance and support is crucial to the selection process. Phone support, remote dial in, User group forum are all types of support that should be available to you from the chosen vendor. Crucial other questions to ask in relation to maintenance & support are as follows:
• Are there consultants in your area available to come on site at reasonable notice?
• How much does the support contract cost? Is it mandatory? Does it include installation of upgrades to the software?
• Is there training available to get new users trained when required?

• Site References - Get relevant case studies of companies from the vendors. Also if possible, arrange to visit a company with a similar business model to see the software in operation and get feedback from the users.

Timing of Implementation

It is important to choose the timing of your go live date to give you the best chance of a successful implementation. This should be discussed at the consultation stage and taken into account when drawing up the project plan.
Many companies choose to go live at the beginning of a new financial year and there are advantages and disadvantages to doing so. From an accounts perspective it is a good time to switch over because you will not have accounts information for the year spread across two different systems. However year end is a busy time for most companies, with stock takes and financial audits typically taking place. If you do choose to implement at year end, ensure that you have sufficient resources available at that time. If you choose to implement in the middle of the financial year, ensure that you will be able to comply with audit requirements at the end of the year.

It is critical to use a phased approach to the implementation. Get the processes that are critical to your business (typically Accounts, Manufacturing and Supply Chain) up and running first before implementing the less critical processes.

Your aim must be to minimise the down time associated with the changeover between your legacy system(s) and your new ERP solution. In order to achieve this, careful consideration must be given to the following;  

• Harvesting of data from legacy systems
• Cleanup and formatting of data
• Methods of data entry to new system (automating as much as possible)
• Testing of the system prior to go live using real data.