Eight steps to get ready for ERP
As project teams get ready for an enterprise resource planning (ERP) implementation, we see a set of questions and concerns about their readiness… or lack thereof. Some of the more common concerns include:
- Is now the right time?
- Can our team handle the many demands of an ERP implementation?
- Will our operations be disrupted during the course of the project?
- Will the implementation be successful?
- Is the investment really worth it?
Steps to get ready for ERP
Enterprises understand that business process transformation goes with the territory of deploying a new solution but might not be fully versed in how to start and what is involved. The more successful efforts employ an 8-step process as they get ready for ERP.
1. Executive Support
Minus executive support, an ERP implementation is doomed. C-level involvement and buy-in is crucial. In a successful ERP project, the CEO understands the ERP business case and allocates resources at the proper level, in addition to supporting the integrated project plan.
2. Develop a comprehensive and phased strategy
A phased approach for an ERP implementation speeds the rate of adoption, and gets an organization up and running faster and with fewer disruptions to operations. Your strategy must keep focus on business process improvement as the ultimate goal. Driving business process improvement drives business performance improvement.
In addition to typical measurements of expense, time, resources, and ROI, an effective strategy also includes other critical business metrics of predicted operational disruptions, impact on productivity and the level of ERP adoption across the enterprise. Keeping these metrics in mind helps the strategic approach and reduces the chance of implementation problems.
3. Create a project management plan
We have found that a strong ERP project management plan is the most influential factor in separating the successful projects from the unsuccessful ones. Project management is integrative, due to the nature of ERP, so an action—or a failure to take action in one area—will undoubtedly affect other areas.
Within your project management plan are the following steps:
- Identify requirements
- Establish clear and achievable objectives
- Balance competing demands for quality, scope, time and cost
- Adapt to the different concerns and expectations of various stakeholders.
4. Identify the project team
A successful implementation depends heavily on the team assembled to design and deploy the new ERP system. It needs executive sponsors at the highest level of the organizational chain, a project champion, project manager, core team and site team. It’s also important to look at the information technology (IT) team structure including a functional team, technical team and data team.
5. Organize/create a project charter
A proper project charter is one of the key pieces to building a solid project foundation, even before you investigate or initiate conversations with vendors. An ERP project implementation charter is the governance document for the deployment and completion of the project after the ERP selection takes place. It defines the roles and responsibilities of the implementation partners, from the ERP vendor/solutions team and the manufacturer to an ERP consultant and other participants. Moreover, the charter monitors the vendor’s performance throughout the implementation, with agreed upon terms and milestones. It not only provides a tracking tool but it lends accountability to all parties involved in the project.
6. Align business processes
An ERP project is the perfect opportunity to dig deep into how your organization currently performs your business processes to find areas ripe for improvement. Among the components of business processes analysis are these:
- Organize, marshal and align resources, establish steering/governance committee, core team and process owners.
- Review and document current state, set a baseline, create process maps and look for non-value added/wasteful activities.
- Educate about what is possible, best practices, technology, etc.
- Identify future state, which is often the most difficult step in business process transformation.
7. Harness the power of the ERP data
Manufacturing ERP data can track quality issues, optimize supply chain operations, and improve material flow, plant layout, inventory management, production scheduling and other areas. As you are assessing ERP readiness, keep in mind the power of tracked and analyzed ERP data to provide meaningful reports and insight.
8. Identify project governance
Governance covers the culture, organization, policies and practices that provide oversight and transparency of a major initiative like an ERP project. Without a governance process, management can get distracted, thinking that the project team is doing fine, only to be disappointed later when the project team is struggling. Solid governance methods include good risk management and project oversight, along with clear and frequent communication to establish trust, teamwork, and confidence in the project team.