The 5 Phases of Successful ERP Implementation
Finding the right ERP software is just the beginning. It's critical to have an ERP implementation plan that is well thought out and strategically executed by a competent team. Learn about our phased approach and level up your knowledge of ERP implementations.
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Are you considering implementing a new ERP (Enterprise Resource Planning) system in your business? Finding the right ERP software to help streamline your operations and improve efficiency is just the beginning. To gain the most from this new investment, it’s critical to have a well-thought-out ERP implementation plan that is strategically executed by a competent team. Let’s level up your knowledge of ERP implementations by defining the key ERP implementation phases, and by identifying the project team members required to assure your new ERP System is off to a winning start. Implementing ERP doesn’t have to be confusing. Follow this solid plan to ensure the cost of your new ERP system is an investment that pays dividends.
What is ERP Implementation?
Implementing an Enterprise Resource Planning (ERP) system into a business environment is complex and comprehensive. A successful ERP implementation will improve operational efficiency, streamline workflows, and reduce costs. This system integration offers many advantages to businesses and organizations, such as labor-intensive tasks being completed in less time, improved customer experience, and decision-making backed by real-time access to accurate data. Employees will benefit from improved teamwork, collaboration, and communication. Most importantly, ERP systems can help unify many parts of the business into one cohesive whole – facilitating financial management, human resources, sales, and even manufacturing processes through integrated software.
Our recommended plan includes complete details on the five key ERP implementation phases: Planning, Design, Configuration, Deployment, and Support. Each of these ERP implementation phases is vital to ensure success. With the right project team who can execute the process, following these five steps will ensure your ERP implementation goes smoothly.
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The 5 Key ERP Implementation Phases
The ERP implementation process typically involves a series of distinct phases, each with its own activities and deliverables. These phases are designed to help the organization plan, design, and implement the ERP software in a way that meets its specific needs and requirements.
The ERP Software implementation life cycle:
- Planning: Assesses the organization’s current systems and processes and defines the specific business requirements the ERP system will need to support.
- Design: Involves working with the ERP vendor to design the specific components and features of the ERP software.
- Build: Involves building and configuring the specific components and features of the ERP system defined in the design phase.
- Deployment: Involves deploying the new ERP system, data migration, and process migration to the new system.
- Ongoing support and maintenance: Involves continuing training and support for users and regular maintenance and upgrades to the system.
The Planning Phase
The planning phase is the first phase of a typical ERP implementation. It is critical to the project’s overall success. During this phase, the organization assesses its current systems and processes, identifying the requirements that the ERP software will need to support with either built-in ERP modules or custom software development.
This phase typically involves conducting a thorough analysis of the organization’s current business processes and engaging with key stakeholders to understand their needs and expectations. The output of this phase is a detailed project plan that outlines the scope, timeline, and budget for the new ERP implementation.
One of the key activities during the planning phase is to conduct a gap analysis. This involves comparing the organization’s current systems and requirements with the capabilities and features of the chosen ERP system. This analysis aims to identify gaps or areas for improvement, develop a plan for addressing these gaps, and implement the necessary changes. It’s interesting to note that almost 70% of companies recently implementing a new ERP system required some degree of customization to meet their business needs.
It’s also critical to engage with key stakeholders during the planning phase. This requires bringing representatives together from different departments and business units to understand their specific desires and requirements. These stakeholders can provide valuable input on the functionality the ERP software needs to include. They can help to identify any potential challenges or roadblocks that may need to be addressed.
By involving key stakeholders in the planning phase, the organization can ensure that the ERP system is designed to meet the needs of all relevant parties and that the implementation process is well-aligned with the business’s overall goals and future scaling needs.
The Design Phase
Good design sets the foundation for a favorable ERP implementation, so it is vital to take adequate time to ensure that all details are correctly planned and executed. This phase of the ERP implementation process is where the real fun begins. This is the phase where the organization works with the ERP vendor to design the specific components and features of the ERP system that will be implemented.
A critical activity during the design phase is defining the system’s functional and technical requirements. This involves working with the vendor to determine precisely what the system needs to do and how it needs to do it. This can be a bit of a challenge because the ERP software is going to be used by a lot of different people with a lot of different needs. So, you must ensure that the system is flexible enough to meet those needs while being user-friendly.
Also crucial in the design phase is conducting a more detailed analysis of the organization’s legacy data and processes. This involves looking at how the organization currently does things and figuring out how the ERP software can support the business in a better way. This can be a bit of a daunting task because there are typically a lot of different processes and a lot of data involved. But it’s important to get this right. Otherwise, the ERP software might not work as well as you hoped.
Overall, the design phase is crucial to the ERP implementation process. It’s where you figure out precisely how the system will work and look. It’s a lot of work, but it’s also rewarding to see the big-picture plan start to come together. When it’s all done, you’ll have a detailed design document that outlines all the key components and features of the ERP system. This will be used to guide the rest of the implementation process.
The Development Phase
The development phase is the third and most crucial part of implementing ERP. This is where you work with your vendor to construct and configure every component and feature defined in the design phase.
A crucial task during the development stage is configuring the ERP software’s modules and functionality to fulfill the requirements determined in previous phases. This involves consulting with the software vendors as they set up the system and implement ERP functionality for future deployment.
Since an ERP system is an intricate piece of software containing many individual parts and features, this can be a very involved and technical process. But, a top vendor with experienced personnel should be able to handle it without trouble.
The development phase also requires system testing and validation of the ERP software through a series of tests. These trials aim to detect any issues or glitches that need fixing and ensure the system runs smoothly. All change management requires this critical testing step to ensure everything works smoothly. Although this process can be time-consuming due to the number of tests required and various scenarios accounted for, practical testing and procedures ensure that the organization can confirm satisfactory performance before deployment.
Overall, the development phase is an exciting part of the ERP implementation process. It’s where you see the system start taking shape and get a sense of what it will be like when it’s deployed and in use.
The Deployment Phase
The deployment phase of an ERP system is when all the hard work of setting up the system and customizing it to fit the organization’s needs finally pays off. This is when the system is rolled out to the users, who start using it to manage and streamline their business processes.
During deployment, software installation occurs on the organization’s servers or via cloud deployment, and data migration takes place. The system is then tested in production to ensure it is working correctly. Any bugs or migrated data integrity issues found during this testing phase are addressed and fixed before the system is made available to the users. A recent analyst report indicates that the technical issues were the top issue for schedule overruns, making it clear how necessary ironing out these issues in testing, so they do not pop up once the system is fully activated.
Often ERP software is put into use gradually by organizations through a process of stages. This eases the introduction of the new system and gives employees time to adjust and optimize business processes. Support through training materials and learning resources is provided to users so they can learn how to operate the system and identify issues early on.
The deployment phase also kicks off regularly scheduled maintenance cycles, and support is available in case anything goes wrong with the new ERP software post-launch.
The Support & Maintenance Phase
The support & maintenance phase is ongoing and essential to the entire process of implementing a new ERP system. This stage starts when the system has been successfully set up and put into use. Proper care and attention during this period can make the difference between a smoothly running system and one that needs constant repair.
This stage is vital to ensure that your company’s software runs smoothly and effectively. A support team should be available to answer questions or concerns about using the system. They might also give new users training sessions or run workshops to help them get the most out of all features. On average around 26% of a company’s employees will be using the ERP system, so proper training is essential.
Alongside offering support and helping out when needed, the maintenance team is responsible for updating the ERP system. This might include fixing minor issues, adding new features and functionality, or improving performance. The maintenance team works with other departments in the company to plan and carry out future upgrades. These activities come under one main aim: keeping the system running smoothly to support everyday operations and help reach business goals.
A well-run support and maintenance operation will keep your ERP system running smoothly for years. With proper care, your investment in an ERP project will continue to pay off long after a successful migration.
Your ERP Implementation Team
Several key team members should be on your ERP implementation team. This typically includes:
- A project sponsor (ideally someone from the C‑Suite) who provides continuous motivational support and positivity across all teams for the ERP project itself.
- The project manager is responsible for coordinating the project team and ensuring the project stays on track.
- The functional leads, who are responsible for leading the functional teams and ensuring that the ERP system meets their specific needs.
- The technical leads, who are responsible for leading the technical team and ensuring that the ERP integrates with the organization’s existing IT infrastructure;
- The user group representatives represent the needs and interests of the end users using the ERP system.
It may also be helpful to involve business process owners from various departments who can provide input and guidance on the processes and requirements that need to be supported by new software platforms.
Should I hire an ERP implementation consultant?
One of the organizations’ critical decisions when implementing an ERP system is hiring an ERP implementation consultant. Adding a consultant to your ERP project team has pros and cons, and the decision ultimately depends on the specific needs and circumstances of the organization. If you don’t hire an ERP, do you have an adequate team to manage all ERP implementation phases?
Benefits of an ERP consultant
One of the primary advantages of hiring a consultant with a successful track record in ERP implementations is that they bring a wealth of critical knowledge and experience to the project. These experts can precisely lay out and oversee the typical ERP implementation plan and its execution across all processes and technical aspects involved. Consultants can be especially valuable to business owners and project managers wanting to implement an ERP system for the first time. Despite adding to the costs of implementation, they can help maintain sanity during the the challenging process of implementing a new system.
Consultants can also support the internal project manager and other organization members as they manage the process flows of the implementation effort. Additionally, because they are external to the organization, these experts can provide an objective perspective and help to identify potential issues or improvements to software systems that might not be apparent to internal stakeholders.
Disadvantages of an ERP consultant
There are also some potential disadvantages to hiring an ERP implementation consultant. One of the main drawbacks is the cost, as these consultants can be expensive and may not always provide a good return on investment. Additionally, because they are external to the organization, they may not have a deep understanding of the organization’s specific processes and requirements, making it challenging to provide tailored advice and support. Finally, because they are not part of the organization, they may not be as invested in the project’s success. They may not always be available to provide ongoing support and guidance as needed.
The decision to hire a consultant should be carefully considered based on the organization’s specific needs and circumstances. In some cases, the expertise and objectivity that these consultants can provide may be worth the cost, while in other cases, the organization may be better off relying on internal resources and expertise.
Avoiding ERP Implementation Failures
One of the most significant risks of any large change management process (which implementing a new enterprise resource planning system clearly is) is the possibility of failure. Gartner Research estimates that 55% to 75% of all ERP projects fail to meet their objectives.
There are many potential causes of ERP implementation failures. However, there are steps that businesses can take to avoid these pitfalls and ensure a successful ERP implementation plan.
- Planning and preparing for a new ERP system is essential. This means understanding the business’s needs and goals, evaluating different ERP solutions, and creating a detailed implementation plan. It also means ensuring the company has the necessary resources and budget to support moving from legacy systems and that the entire organization is trained and ready to use the new system and understand updated process flows.
- To have a successful ERP implementation, it is vital to work closely with the vendor and any other partners involved in the project. This requires finding vendors with a track record of success and working with them to ensure that the system is configured correctly and customized to meet the business’s needs. Strong communicators and collaborators are needed as each of the ERP implementation steps is completed.
- You need to have a plan for addressing problems with the system and making regular updates. This will help make sure the system stays effective and efficient. With this support, businesses can avoid ERP implementation failures and ensure the chosen ERP software supports their business goals.
- Involve different parts of the business in planning, preparing, and testing the ERP system. This will help ensure that the system is a good fit for the business and that employees are ready to use it. Be sure there is a plan to migrate legacy data critical to various organization groups.
- You should regularly review your project’s progress to ensure everything is going smoothly. If there are any problems, you can fix them right away. This will help make sure your project stays on track and within budget and avoid ERP implementation delays.
- Communicating regularly with employees is essential. This means keeping them informed about the project, providing training and support, and addressing any concerns or questions they may have. This can help ensure that employees are prepared to use the new system and are committed to its success.
- You should seek external support and guidance for your ERP implementation project. This means working with experienced consultants, trainers, and other experts who can provide valuable advice and support throughout the project. This can help ensure that the implementation is successful and that the business gets the most out of its new ERP software.
Failure to Plan is a Plan to Fail
A new ERP system can be challenging to set up. However, following the tips above, businesses can decrease their chances of ERP implementation failure and enjoy the many benefits of a well-implemented, modern ERP system.
Successful ERP Implementation Case Studies
Case studies can provide valuable insight into how to achieve success with your new system. By studying ERP implementations for different businesses, you can identify strategies that have proven successful in arriving at a successful ERP software implementation.
It’s also important to learn what pitfalls to avoid so companies don’t repeat mistakes others have experienced. With lessons learned from ERP adoption case studies, organizations can routinely implement ERP software solutions successfully and use their system to their full capacity. At Top10ERP, we have compiled the most comprehensive library of ERP case studies available. Dive in and find a few that have met success and represent a similar business scenario as yours.
ERP Implementation Process FAQ
How long does an ERP implementation take?
The duration of an ERP implementation can vary based on several crucial factors, such as the scale and intricacy of your company and your ERP choices. Generally, implementations can take anywhere from several months to over a year. Your new ERP implementation is extremely important, so complete all phases before moving on. Making hasty decisions could result in costly errors and poor results.
How much does an ERP Implementation Consultant cost?
There is no one-size-fits-all answer to the question of how much an ERP implementation consultant will cost. Rates vary depending on factors like the consultant’s experience and expertise, the size and complexity of your project, and the timeline for completion. However, average hourly rates for adding ERP consultants to your implementation team typically fall between $100-$200/hour. There are outliers to this range; some charge as little as $50/hour, while others charge upwards of $500+. In some cases, a fixed rate may be offered instead. It would be best to discuss pricing options directly with your potential consultant(s) so that you can get a clear idea of what they’ll need from you budget-wise.
Is on-premise ERP harder to implement than cloud ERP?
On-premise ERP systems are typically more complex and challenging to implement than cloud ERP systems. This is because on-premise systems require additional infrastructure, hardware, and technical expertise to set up and maintain. In contrast, cloud systems are hosted by the provider and accessed via the internet, making them easier to implement. However, the relative difficulty of implementing on-premise vs. cloud ERP can vary depending on the specific system and the needs of the business. More businesses are choosing cloud solutions these days. A recent industry survey indicates around 65% of new implementations are cloud ERP systems.
What is the ERP implementation life cycle?
The ERP implementation life cycle refers to planning, implementing, and maintaining an enterprise resource planning (ERP) system. This process typically involves several stages or phases outlined in detail above. The ERP implementation life cycle is a complex and multi-faceted process that is crucial for organizations to carefully plan and manage to ensure a successful implementation of their ERP solution.
Who is responsible for end-user training during ERP deployment?
During the deployment of an enterprise resource planning (ERP) system, end-user training is typically the responsibility of the ERP implementation team or vendor. They will typically design and implement a comprehensive training plan and schedule to ensure that all users are proficient in using the system. The training may include a combination of interactive workshops and online tutorials, as well as self-paced learning materials for users to work through on their own. The responsibility for training may vary depending on the implemented system’s specific circumstances and features. However, it is essential to carefully plan and coordinate end-user training to ensure that all users are adequately prepared to effectively use the system.
ERP System Comparison Tools & Assistance
At Top10ERP.org, we offer a variety of tools, resources, and services to help you evaluate many ERP systems. If you are still looking for the best-suited ERP for your business, dive into our ERP comparison tool and find the best options. We also provide expert product recommendations, don’t hesitate to contact us so we can be of further help to your ERP selection process.
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