Imagine laying the foundation for a building but forgetting to check everything’s in place and fit for purpose before you build on it! You wouldn’t, would you? ERP implementation is similar. You need to work carefully through the project, checking all is good before you rebuild your business processes on it!
After all, enterprise resource planning software makes up approximately 15% of IT spending. And three-quarters of installations are likely to fail. That’s not a good return on IT investment!
So let’s dive into possible ERP system problems and how to choose and implement a new ERP system successfully.
Possible Problems With Your Current ERP System
Let’s listen in to a hypothetical CEO colleague as they talk about their system and the problems it’s causing them. Yours may be be different but you’ll likely recognize some:
- The greatest challenge is it’s not integrated – different parts of my business are operating in silos. I’m worried this could lead to data inconsistencies and we’ll not stay competitive.
- We lack features and functionalities we need – so we’ll probably lose revenue as we grow.
- Our technology has compatibility issues. It’s outdated. How are we going to collaborate with partners and customers? I’ve also found it hard to find someone to maintain this old system.
- The reports we’re generating aren’t giving a clear picture of the business now. I’m no longer sure of our exact financial and operational status. How can I make sound decisions?
- We can’t produce reports in a timely manner for our banks, investors, etc.
- And we have a security issue with this older system. I worry about losing our sensitive data, my legal liabilities – and the damage to our brand if that happens. We’re an open invitation to hackers right now.
Addressing these problems is crucial for a successful ERP implementation. So – what should you aim for?
Key Goals For Your New ERP Implementation
Ensure the new system meets your specific requirements
But be sure this isn’t only about a personal preference, which can happen when key positions change – CFO, Controller, COO, etc. This can be a slippery slope. Maybe your existing ERP wasn’t implemented properly. It may be cheaper and less disruptive to fix what you have rather than embark on a completely new system. The fork lift replacement might get you right back to where you are today. That would be disruptive and costly.
You want to streamline your business processes in one place. No silos of data among HR, customers, supply chain, inventory, finance, etc.
As your business grows, you’ll find you have new requirements to keep your IT aligned with your business goals. You need a system that can accommodate changes ,or your growth will derail.
Focus on user-friendliness
Make change management easy for your staff. They’re the ones who’ll use the system. Make it simple to input data correctly if it can’t be auto-entered. This also reduces training costs.
Invest in top-class reports and analytics
To stay competitive, you need insight from meaningful reports. Without these, you can’t make good decisions or identify process improvements.
Address security issues
No one is immune. But whether your ERP system is on premises or cloud, it’s important to check what updates and support you’ll have for ERP implementation security against your specific requirements.
Avoid the “build vs. buy” trap
“Our business is so unique that we need to develop our own ERP.” Don’t kid yourself. Yes, every business has a secret sauce, but you aren’t as unique as you think. Salvaging software developments gone awry will cost you. Most companies don’t have the knowledge or resources to adequately develop an ERP!
How to Implement ERP Successfully For Your Small to Midsize Business
Deploying ERP correctly to benefit your business is complex – and potentially expensive if mistakes occur. We can break this process into three steps:
- Planning for a new ERP implementation
- Finding the best system for your business
- Onboarding the system carefully
We’ll look at them in turn, although you should take them into consideration together.
If you already feel you need an expert for this project management, maybe consider outsourcing to a Fractional CIO to manage it for you. Otherwise, let’s continue…
1 Plan For a New ERP Implementation
You need a written plan. This will be your roadmap. So include these items in it:
- Outline your objectives. We named some possible ones above. But include timeline, scope, necessary resources, costs, etc.
- Decide what functionality you need and how you’ll avoid disrupting current processes during the new implementation.
- Map out all data that will need to be migrated.
- Evaluate existing processes. Automating bad processes can result in buyers’ remorse. As a matter of fact, do this before going down this path. As mentioned above, you may find your existing ERP is fine if you leverage more features and re-engineer some of your processes.
- Research vendors on a spreadsheet. Look at several with regard to features, technical support, contract, implementation cost, and pricing. Also look at their longevity, reputation in the marketplace, references, reviews, etc. You may like their product, but if they go out of business it doesn’t matter.
- Ensure sufficient, capable, internal staff to implement, administer, and support users. All technology requires care and feeding after it arrives. It’s like having children. Care and feeding starts once they arrive!
- Arrange when to inform and train your users in advance about use, roles, and responsibilities. Also plan to provide written instructions and perhaps videos to help. In other words, plan to manage change! Be sure to include key users and influencers in the entire process from the selection to the implementation.
- Plan performance monitoring – so you can continue to customize the system. For example, plan to establish KPIs, collect feedback, analyze data, and re-evaluate KPIs in response to the current situation.
2 Find the Best System For Your Business
To find your best solution, take your time, focus on value, and test.
Research and evaluate your options for ERP implementation carefully. There are multiple ERP systems available. And not all businesses require the same features. It must meet your needs!
You need a sharp eye and careful scrutiny of the detail of the offerings. Perform a five-year Total Cost of Ownership (TCO) analysis for the top candidates. Some might seem cheaper or more expensive on the front end, then vice versa post implementation. Average it out over time to give you an apples to apples comparison. If on-prem, include the cost of replacing servers every five years. This will make cloud vs. on-prem more comparable.
Finally, test the preferred system through demos, proof of concept, or pilot projects.
3 Onboard the System
You’ve mapped out your plan, looked at your people, processes, and technology to decide on your needs, and finally chosen your vendor for this IT solution.
What has to happen next?
- Give chosen teams the time they need to make the changeover carefully in an orderly way (you planned what was needed!).
- Migrate your data according to your written plan.
- Keep everyone up to date with progress. Communicate, communicate, communicate.
- Document everything you do and all changes, so you can backtrack where necessary.
CIO Suite Can Help With Your ERP Implementation
People, processes, and technology are all involved in ERP implementation. From our years of experience at C-Level, we know what a headache this can be – and how potentially disruptive.
If you’d like CIO Suite to bring in some IT leadership on demand to help you through your ERP project successfully, call or email us today and let’s talk!