Navigating ERP Implementation: Essential Steps Before the Big Jump

In the business world, things are always changing, especially with technology. For companies thinking about using ERP systems, it's not just about getting new tech; it's about making big changes to their operations to facilitate growth and make things better. Gaiana Karakashian (MBA) , SAP Manager at ELEKS, has a wealth of experience guiding various companies through this transformative journey. In this article, Gaiana will share some observations of what every company should do before implementing ERP.

There are two types of customers who are considering implementing ERP. The first group is made up of experienced workers who understand how ERP helps businesses grow, scale, and expand globally. They know that ERP can smooth processes, help with decision-making, and alleviate operational pain points.

Then there's the second group, which is aware of ERP but uncertain about how it can benefit their business. Whether you're in the first group or the second, getting ready for ERP implementation demands the same steps: planning and thinking ahead. So, let's look at the five main steps every company should take, or at least know where they stand, before the start of ERP implementation.

Step 1: Purpose

Before jumping into ERP implementation, it's crucial to figure out why you're going digital in the first place. What exactly do you need and want for your business? Are you trying to make things run smoother, make customers happier, or grow bigger? Take, for instance, a technology firm specialising in smartphones and laptops. Their objectives may revolve around optimising manufacturing processes and elevating customer experience. And despite the natural desire to get everything at once, prioritising initiatives that facilitate efficient resource allocation is imperative to ensure a successful ERP implementation and foster meaningful transformation from the outset.

Step 2: Timeframe

To ensure a successful ERP implementation, start by carefully estimating the work hours required for each task, assigning responsibility to individuals, and involving an implementation partner familiar with the software solution. This will help you to accurately calculate timelines and manage scope creep. Once you've tabulated the necessary work hours, you should create a realistic schedule by comparing available work hours to the implementation timeframe. However, you may encounter several challenges while doing so, here’re some of them.

It is important to be mindful of the timeframe proposed by the implementation partner and make necessary changes to the project scope to align time and effort. Otherwise, you may fall into the first trap.

The second trap is to assume that a clear project timeline can be achieved with undefined scope. No, it can't.

The third trap is to think that key users on the business side will have enough time to perform their daily routine tasks and tasks related to the ERP implementation project equally well. No, they won't. And this will also affect the overall project timeframe.

The good news is that once the trap is spotted, the appropriate solution can be implemented, such as reducing scope, extending the timeline, adding more resources, breaking the project into phases, etc. It is crucial to involve the executive management team in these decisions and highlight the importance of their involvement in the software selection and implementation process from the start.

Step 3: AS-IS

Before embarking on the journey towards ERP implementation, it's crucial to gain a comprehensive understanding of your current state. This encompasses both processes and systems within your organisation. What are your existing workflows, data flows, and integration points? Do you have technical descriptions of your infrastructure and architecture?

Please be sure that when the time comes, you will be ready to show documents, schemes, and diagrams to the implementation team.

An additional benefit of formalising the company's processes and infrastructural landscape is identifying areas of inefficiency, redundancy, and fragmentation. For instance, conducting process mapping exercises can reveal bottlenecks and gaps that need to be addressed during implementation. This means that right from the beginning of the project, you know where to focus your efforts and what challenges ERP should be able to address.

So, it's no surprise that a clear understanding of the current state will allow you to fix or resolve any issues that arise before rather than mid-implementation, saving you time, money and energy.

Step 4: Data

Data is the lifeblood of any ERP system. Therefore, ensuring data accuracy, consistency, and completeness is paramount for implementation success. Have you embarked on data cleansing initiatives? Identify redundant or obsolete data, establish data governance policies, and validate data integrity to lay a robust foundation for ERP implementation. For example, conducting data profiling exercises can help identify inconsistencies and anomalies in your dataset, enabling you to take corrective actions proactively. And again, doing it before the ERP implementation will allow you to avoid overspending your resources.

Step 5: Organisational change management

Let's be honest, ERP implementation goes beyond just installing new software; it's about facing the wild and wacky world of organisational change. Hence, it's crucial not to overlook the human element of this transformation and to have a robust plan in place to address resistance and scepticism within your organisation, in other words, a change management plan. However, it's important to note that change management involves more than just effective communication—it encompasses sponsorship, coaching, resistance management, training, and reinforcement, all of which necessitate professional expertise and familiarity with the tools. Therefore, by acknowledging the human side of ERP implementation and employing comprehensive change management strategies, we can ensure successful outcomes in our ERP initiatives.

Conclusions

ERP implementation is a journey that demands careful planning, preparation, and stakeholder engagement. By addressing some critical questions before the project kick-off, you can make this journey less stressful, cost-effective, and way more successful.

Best wishes for a successful implementation!

Written by Gaiana Karakashian (MBA) , SAP Manager at ELEKS.