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Implementing an ERP Software Solution

Implementing an ERP Software Solution

Implementing an ERP Software Solution

Selecting an Enterprise Resource Planning (ERP) software 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

The 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 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 project.

Define and Document the Business Processes

This is a task that 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.

The 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 and accounting 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.

Define Objectives

Once 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 (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

Once 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.

Project Planning

Once 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 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

It 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 intervention.

Data Extraction

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 that 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

Using 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 having an in-house ‘champion’ is highly recommended.  People forget what they have learnt and find it hard to adopt 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?

In 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 a 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 is 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.

Go Live

A comprehensive checklist 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.
  • Take 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.
  • The solution partner needs to be available through this process as well as during the initial days of working live on the new ERP Software.


Selecting 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