Implementing an ERP Software Solution
Selecting an Enterprise Resource Planning Software solution (ERP
Solution) is often a challenge. However this is only half the battle.
Many ERP Software solutions end up being unsatisfactory because of one
main factor, which is a lack of planning and preparation.
Planning and Preparation are Key
more time that is spent on the planning and documentation processes,
the less the initial teething problems will be and the greater the
chance of a successful ERP Software Solution for your business. Below is
are a few outlines of the main steps.
Select a Team
A team of
people should be selected. This should ideally comprise of key staff
from all areas of the business and not just senior staff. It is often
the case that a manager will not fully understand the day to day
procedures of his department. An overall executive manager should be
selected to oversee and drive the project as well as a project leader to
manage the project. Each team member should be made accountable for a
specific area of the business in which they are involved and it is
important that all of the team are committed to the success of the
Define and Document the Business Processes
This is a
task which is often overlooked or not done thoroughly. It is time
consuming and often tedious, but the exercise will be worthwhile and
invaluable. All areas of the business should be covered.
benefit of this exercise is that it can be used to define the objectives
of the ERP Software Solution as well as identifying the requirements.
If the current processes, problems and shortcomings are not clearly
understood, how can any decisions be made on improvements? It will also
prove invaluable to the ERP Software provider, as it will assist in
clearly outlining what functionality is required from the ERP Software.
Misunderstandings and assumptions are dangerous.
The Team should
gather copies of all documents and reports currently used by the
business and then discuss the shortfalls and strengths of the current
processes. This then needs to be fully documented.
the business processes have been carefully investigated, then some main
objectives of what the business needs from an ERP software solution
need to be defined. This involves looking at what currently works well
as well as what is lacking and cumbersome with the current system. ERP
Software Solutions can cover many different business processes and it is
important to keep sight of the priorities. It is very easy to get lost
in the detail. Remember as well, that it might be wise to implement in
stages. For example, setting up a comprehensive inventory (stock) system might need to be the initial phase and the creation of the Bill of Materials (BOM) may come later, once the inventory system is in place and all the data is accurate and the systems working correctly.
Find a Solution and a Partner
a clear idea of what is required has been defined, then you are ready
to look for an ERP Software package. ERP Software Solutions are often
complex and the correct installation, setup and training are critical to
ensuring a successful outcome. Often these costs can form over half of
the total costs, but it is risky to skimp. Imagine buying a very
expensive range of bathroom fittings. Then imagine engaging the cheapest
builder, plumber etc. to install these fittings. What you end up with
will be problems and issues and the end result will be a bathroom that
is disappointing. In the same way, ensure you do not skimp on the
assistance of professional and knowledgeable resources to assist with
implementing the ERP Software Solution. Moving to a new ERP Software
Accounting Solution is a bit like getting married. The old adage “marry
in haste, repent at leisure” holds true.
Make a Project Plan
you have found a solution and a partner, the next step is the formation
of a Project Plan. This needs to be drawn up by the Team in conjunction
with your solution provider. The timelines need to be realistic and a
full buy-in from all concerned is vital. Accountability for the various
aspects should be allocated. This project plan needs to be continually
updated with progress. After all, slippage and problems will affect the
all-important “Go Live” date. The sooner these issues are identified,
the more chance there is of taking corrective action.
Review, Revise and Document Processes
is important to review the current business processes and revise them
to the ERP Software solution. This should all be documented, so that a
clear idea of the new methods is obtained by everyone. This
documentation can be used as a basis for training and will be a
worthwhile exercise in the long run. It can be extremely useful to have
an in-depth session for your Team which may cover a few days, to go
through, in detail, all the functionality of the ERP Software. This
session will provide the basic initial training for the Team as well as
identify any problem areas or aspects which may need manual
The existing data needs to be
extracted. This might be from a legacy system or spreadsheets. This is a
really good time to do some housekeeping, deleting obsolete
information, such as stock and customers, etc. If any re-coding of
account numbers needs to be done, this is also a good time but remember
to keep a lookup table of old codes to new codes for take-on purposes.
Most ERP Software will have the ability to import from spreadsheets,
however, these may need to be in a specific format. There may also be
some data which has to be manually captured.
Once the data has
been imported into the new ERP Software database, it needs to be
carefully reviewed. Remember the acronym GIGO: Garbage In, Garbage Out.
Make sure the data is as accurate as possible.
Training and Testing
a copy of the new database, the Team should go through a process of
testing the system. This means processing actual transactions and
carefully checking the outcomes. It is very important to use real live
data to do this. This exercise will highlight any problem areas, both
with the data and with the processes. Training staff on the new ERP
Software can be a challenge. Appointing one or two key people who are
very thoroughly trained and who can then train other staff members is
usually a good way to go. Effectively one or two ‘champions’ are created
who can help and train other staff members. Training is a long process
and can be very costly, so to have in-house ‘champion’ is highly
recommended. People forget what they have learnt and find it hard to
adopt to new methods, so training will continue long after the Go Live
date. The documentation drawn up in the ‘Revise, Review and Document’
process described earlier is of considerable help in training and can be
the basis for Procedure Manuals to assist staff.
Parallel Run, Good or Bad?
our opinion if the testing phase is done thoroughly for a short period
of time using live data, this can avoid doing a parallel run. A full
parallel run needs to be carefully considered, weighing up the
disadvantages and costs against the advantages and benefits. It is
important to take into account that all input and work has to be exactly
duplicated and in exactly the same sequence. This puts a considerable
burden and pressure on staff. The new ERP Software will be fully
integrated system, which the legacy system may not be and as a result
the new ERP system may produce far more accurate information and
results. The risk of omissions and mistakes in capturing information are
high also resulting in differences in the end result. Parallel runs
will rarely give exactly the same output on the two different systems.
The dilemma then becomes deciding which system is correct.
comprehensive check list of what needs to be done before the new system
can Go Live is vital. Timing can often be a critical factor. There are
usually many aspects to consider. Some of these are:-
- A full Stock Take should be done to capture take on stock levels.
- All stock Prices need to be up to date.
on Balances need to be exported from the legacy system and imported
into the new system. Alternatively these will have to be manually
captured. Define cut off points.
- All Opening Balances must be
compared and reconciled to all Closing Balances on the legacy system.
Any differences must be accounted for and documented.
- Document layout such as Invoices, Purchase Orders must be checked.
- Staff must be available for out of business hours work, in order to ensure the new system is ready to Go Live.
- Ensure staff are fully trained.
solution partner needs to be available through this process as well as
during the initial days of working live on the new ERP Software.
the right ERP Software Solution is important, but the success of the
system will be due not only to the functionality of the software but,
just as importantly, as to the planning and preparation of the
implementation of the ERP Software Solution. No matter how good the ERP
Software Solution is, bad or insufficient planning, unrealistic
deadlines and expectations, lack of documentation, inadequate training
and inaccurate data take-on processes, will result in an unsuccessful
ERP Software implementation.
“By failing to prepare, you are preparing to fail.” - Benjamin Franklin
“Give me six hours to chop down a tree and I will spend the first four sharpening the axe.” - Abraham Lincoln
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