Great job! You have grown your business to the extent that you now need technological intervention to manage it. The need for ERP implementation in your business means that you have achieved a certain level of success.
Having an ERP system to streamline your business will help you grow even further.
However, you should know that implementation of ERP in an organization is a huge undertaking in terms of finances, time, and manpower. Moreover, the process is complex because it aims to integrate various functions across the business into a single dashboard of comprehensive data.
Are you ready to commit to this for the long-haul? If yes, here’s are the phases of ERP implementation process – also called ERP implementation life cycle.
1. Establish Your Project Management (PM) Team
The first phase of an ERP implementation plan is to establish and mobilize a project management team. The PM team will be widely involved from the beginning through the end of the implementation process. And up until the post-deployment stage of the system.
Diving straight to ERP implementation without first establishing a project management team may result to issues later on. Therefore, project management is the vital ingredient to the success of an ERP system integration.
The project management team consists of:
- executive sponsor / senior management – oversees the project and supplies the needed resources; provides the backing needed to effect changes across the entire organization.
- project leader / project manager – one that is knowledgeable about the entire business and its different processes; and is responsible to the entire team.
- business process owners
- end-users – people throughout the organization who will be using the technology.
ERP partner or technology provider’s side
- business analysts
- technical consultants
- project managers
The project leader could be an internal employee, or an experienced third-party. He must have the required expertise and appropriate experience so the ERP implementation process can go seamlessly. Additionally, he must be able to lead your employees throughout the process to ensure that everyone in the company (end-users) fully understands their roles and responsibilities early on.
2. Identification of Business Requirements, Planning, and Collaboration
Before the implementation of ERP in your organization, it is important to initially identify your objectives and understand the needs of your business. Therefore, the primary goal of your management team is to obtain detailed data of your business and system’s current issues. Inputs must be gathered from end-users across the business.
This stage requires thorough research and analysis of existing workflows, and consultation across the entire organization. The goal is to identify bottlenecks, redundancies, and pain points on all business processes. The PM shall keep an open mind for suggestions by end-users on how the process can be simplified and improved.
The results will help in selecting an appropriate system and its specific features that are fit to your business process.
3. Software Design and Development
The design and development phase largely depends on the findings during the research. An improved and more efficient workflow must be the goal in the development of the system.
The ERP system must be configured to meet ever-changing business requirements and improve overall performance. The newer system may also be integrated to other existing business software used by the company – even with those that are not to be replaced by the new system.
It is important to include end-users in conceptualizing the system because they will be the ones who will use it. They are also the ones most familiar with their workflow, its problems, and how it could be addressed. Involving end-users ensures their acceptance of the new system. Especially because it has been “personalized” to address their current issues.
External consultants may also be hired to contribute their expertise in the design and development of the system. Having your internal IT specialists and per-department report writers involved in development will also help.
Simultaneous with software development, the project management team must start developing training modules for end-users. A well-thought data migration plan from old systems must also be in place.
4. Data Migration and Testing
After software development, the next phase of an ERP implementation plan is the rigorous testing of the entire system to ensure that it works as intended. To add, it will provide a clear insight to the performance and effectivity of the system before deployment. The testing must include select end-users or employees and it will serve as an introductory training to them.
However, before testing, all foundational and necessary data must be migrated to make testing closer to real-world operations. Data migration in this stage is crucial because if done properly, it will help streamline your operations.
Also, unnecessary or incorrect data must be filtered out before migrating to ensure data integrity on the newer system.
During this phase, all functions will be tested, fine-tuned, and adjusted when needed, to address potential problems.
Software development and testing could be conducted simultaneously. The project team may test and measure specific modules, while another one for a different business process is being developed.
5. End-User Training
The fifth phase of an ERP implementation plan is End-User Training. After development and rigorous testing, all end-users must be trained to use the new system effectively. The training must be led by experts to provide in-depth education. This will ensure that all users acquire full understanding and excellent proficiency with the software. Additionally, your IT team should have a more extensive study of the software so they can address potential issues.
To lessen the time needed for training hundreds (or even thousands) of employees, some companies use the “train the trainer” approach. In this method select employees are fully trained so they can facilitate the training of other end-users.
Proper training is critical in the implementation of new ERP because this will dictate the success of the transition. Failure to manage the transition is among the most common reasons why ERP systems fail.
Be reminded of the following steps when implementing a new system:
- Notify end-users that a transition to a new system will be implemented.
- During the development phase, training materials should also be created.
- Make sure that the transition is accompanied by comprehensive training modules (either documents or instructional videos) from your technology partner.
- Explain the importance of the transition to a newer system.
- Establish a well-educated team to facilitate learning and motivate end-users to adapt to the upcoming change.
6. Deployment and Full Data Migration
The new ERP system can be deployed if the organization is ready and the project team is satisfied with it. Upon deployment, expect that issues may still appear; hence, the project team must be readily available to promptly address them.
Despite the project team’s best efforts to manage the transition, still be prepared to help confused employees understand the system. Your technology provider must also be able to perform troubleshooting if necessary.
Data migration may also be done during this stage (such as current transactions).
If an organization-wide single transition is too much a risk to take, it can be done one by one wherein you can focus first on high-priority processes and implement the others at a later stage when the organization is ready.
If you choose to do it one-by-one, your older system must run along with the newer system. This method minimizes the risk of an organization-wide system failure. Although, it increases the cost of the project and extends the time needed for transition.
Lastly, manage your expectations. As always mentioned, implementation of a new ERP system in an organization requires unwavering effort, commitment, and significant amount of time. Be prepared as it may take a few months to more than a year, depending on the size of the business. You are in for a rough ride during these early stages of deployment. However, productivity gains later on can be expected if executed properly.
7. Post-Deployment Support
The final phase of the ERP implementation plan is post-deployment support. The role of the project management team does not end after deployment. They are still responsible to effect post-deployment support if the need arises.
Gathering of user feedback shall continue during this stage as this will be the basis for system adjustments and fine-tuning.
Post-deployment support is an important role your technology partner should provide because additional development and configuration may be needed by the business. This stage is crucial to maintain the efficacy of the system.
Therefore, choosing the right technology partner has a huge effect to the success and continued performance of the ERP system. Choose one that has a proven record of staying with clients and addressing their issues even years after the transition. Ideally, as long as you are using the ERP system, your partnership with the technology provider should stand.
These are the 7 phases of an ERP implementation. If you are targeting to implement one in your business, make sure that you are financially prepared. Also ensure that your people are willing to commit extra time and effort throughout the process.
Choosing an ERP system is just half the story; finding a reliable technology partner is also a huge factor. As highlighted from the beginning, establishing a reliable project management team will be your key to success.
Lastly, ERP implementation should be a carefully designed and well-budgeted plan. Strive to eliminate the probability of having to spend money on unplanned costs. If you fail to plan, be prepared to inflict a sizeable dent to your company’s finances. CyberLife can help you in developing an ERP system that is tailored to your business. Contact us so we can start the process of your company’s digital transformation.