How can a phased ERP implementation model reduce risk?

During my time at a medium-sized manufacturing company, we decided to implement an ERP system in phases. We started by focusing on our finance department. In the first phase, we worked on integrating and ensuring the accuracy of our financial data. This approach allowed us to fix any issues and provide thorough training to our finance team before implementing the ERP system company-wide. By the time we rolled out the system in our operations and sales departments, we had a good understanding of it, a well-trained group of users within the company, and a refined implementation strategy. This helped us reduce risks and make subsequent phases smoother.

"One Size doesn't fit all". While implementing ERP, Whether you need to go for a bigbang approach or for a phased manner implementation it all depends on various aspects like no. of geographies, no. of legacy/disparate applications/systems, business model, availability of business users across the globe, risk appetite of the client, vision of the company/leadership, budget etc. In majority of the cases, a phased ERP implementation model(ofcourse with additional cost for activities like develop interemediate interfaces etc) doesn't put the entire business at risk as ERP implementation is like changing wheel to a running car. It also gives breather to the business in terms of making themselves familiar and appreciate the good things of ERP

Two methodology to work with, (Agile) let’s say u are trading company so we can activate OTC cycle (Order To Cash) which will activate (Finance – Purchasing – Inventory - Sales) then implementing cycles like MTO (Make To Order) or using (Waterfall methodology) with One basic module implementation then activate the others by priority like, activating SAP S4HANA Finance Module and get a deep understating of ERP software capabilities , then Material Management, Sales and so on. From another vision we already doing it geographically as most of multinational we are implementing exactly by phase as it depends on countries like if enterprise have 10 companies in 10 different countries so we will have 10 phases every phase is a rollout project.

It can NOT You have 4 major business processes for Engineer to order … make to order … assemble to order .. and make to stock. These processes are complemented by alternate method of supply business processes such as consignment, purchase for resale etc. In case of major events an organization must be able to switch from one to another…. Thus have knowledge and preferably implemented and used scenarios

I always prepare a detailed phased plan to reduce risk by breaking down the overall implementation process into smaller, manageable phases or stages. This approach allows organizations to focus on specific aspects of the ERP system, ensuring thorough testing, training, and adjustment before moving on to the next phase. those steps, the implementor can identify and mitigate potential issues early in the implementation process, minimizing the chances of critical errors or failures that could disrupt operations. Additionally, phased approach helps in aligning the ERP system with evolving business needs and feedback from users, making it easier to adapt to changing requirements and reducing the risk of costly late-stage modifications.

I completely agree that a phased approach would definitely do better risk management and it will break down the complexity, helps in focusing on core functions. This really ensures that the essential business functionalities are up and running smoothly before moving to less critical areas. Running parallel operations is also recommended in some cases, however there will be overhead on the operational support for the business but this serves as a safety net while users get accustomed to the new system.

It will also allow you to reach to steady state post implementation for that phase quickly vs doing all big bang, thus reducing pressure on Application Support.

A phased approach to ERP adoption, in my opinion, minimizes organizational disturbance by reducing risks through incremental deployment. Vital details consist of: Gradual Adoption: Implementing Phased ERP lowers resistance and facilitates easier adoption of change. Continuous Improvement: phased techniques enable businesses to learn from the early stages. Controlled Testing: Each phase is put through a rigorous testing process that finds and fixes problems early on. Resource Efficiency: Allocating resources optimally through the prioritization of crucial business activities. Financial Risk Management: Firms can keep an eye on their return on investment and realized benefits. Change Management: An Organized System for Managing Change

There are scenarios when Organizations decide to go with big-bang Global implementations. However, phased approach definitely offers a lot of benefits. 1. From the data migration perspective, it can sometimes be really complicated, but if we are doing it in phases,we can have more control while maintaining the data accuracy and integrity. 2. Each phase can go through thorough testing and the major issues can be resolved before moving to the next phase. This reduces the risk of facing any bigger issues later in the system. 3. User adoption can definitely be handled better as they get more time to get used to with the phased approach. Finally, not to mention, alot of the PM aspects like resource and change mgmt can be tailored to each phase.

In my opinion, there are a number of benefits to implementing an ERP system in phases, but there are also particular difficulties that firms must successfully overcome. Business Objectives: It is difficult to maintain the phased deployment in line with changing business objectives; this calls for effective change management. Integration: Phased techniques necessitate real-time connectivity between phases as well as smooth cross-module integration. Cost management: To make sure the company stays within its allocated budget, diligent financial management is necessary. User Training: Constant work is required for the several stages of user training.

1. Clear strategic planning that aligns with long term biz goals. 2. Clear & detailed project scope 3. Experienced cross functional team 4. Effective change mgmt pratices 5. Allocate sufficient time & resources for appropriate user training 6. Thorough testing to identify issues as early as possible 7. Clear and detailed data migration strategy 8. Appropriate Risk mgmt and Communication mgmt plan 9. Identify the integration points and plan a thorough sytem integration approach in advance 10. Post production support plan with support of atleast 2 month ends