Process of ERP Implementation

Enterprise Resource Planning or ERP is a term used in business management and generally refers to software programs for planning, executing, and monitoring business operations. Many businesses continue to rely on old systems like Excel and even have several other programs as well.
But, this practice is no longer viable. With the passage of time, technology has advanced and so are the needs of modern businesses.

Businesses need an enterprise resource planning system that is flexible, manageable, and adaptable to change. It must enable the organization to do more than cope up with the market environment but also facilitate its growth.

An ERP comes with a host of benefits including cost reduction, improved management control, speedier access to information, superior customer service, reduced errors and omissions, higher inventory accuracy, more accurate budgeting and reporting, increased profitability etc.

ERP implementation for an organization is not a small task because it affects your entire business model.

Transcript

1. Process of ERP Implementation Introduction An ERP system has great importance in businesses to manage information. In this case, it offers organized collection and use of data and storage for the benefit of an enterprise. But, a question that many ask is how long does it take to implement ERP? In this article, we shall talk about the process of ERP implementation and how you can manage it efficiently. Let's begin!
2. What is the ERP Implementation Lifecycle? First of all, how do you manage information in your business? Many would say that they use CRM software, accounting systems for finance management, spreadsheets, and follow manual processes to gather data. But, none of these are interconnected. Hence, data remains scattered. Here is where ERP comes in. It brings everything in one place to access and utilize this data whenever or however you need it. Thus, it increases efficiency and helps data analyze more accurately. ERP implementation is a process where you plan, configure and deploy your ERP software. There are 6 phases of ERP implementation which we call the ERP life cycle. It incorporates everything from planning to going Live and beyond. There is no specific time duration for how long a successful ERP implementation would take. But, it is fair to say it has its own pace.
3. Key Steps of ERP Implementation ERP implementation typically runs through 6 phases. These are: • Planning • Design • Development • Testing • Deployment • Support However, a great deal of ERP life cycle phases depends on the complexity of your business and what approaches you are following with ERP software. It also affects the timeline of your ERP implementation. You can reap the most benefit of your ERP software when you have a well-documented project plan chalked by a trusted and experienced ERP partner. Planning The first phase of ERP implementation is planning. At this stage, you set up a team to develop a decent plan to complete the work, measure progress and take access as necessary.
4. An ERP team includes members from various departments who will use the software, an executive sponsor, a project manager, an ERP partner (an intelligent choice for efficient ERP implementation), and additional members from the IT team (if involved with the ERP software). The purpose of planning is to create a detailed study of the business. The primary task is- • Brainstorming • Developing a thorough understanding of the present issues (including the ERP requirements and inefficiencies) • Being able to write objectives or the desired outcome (the end product of the implementation) The truth is you can't implement a successful ERP without understanding your business correctly. You have to know how your company works and its future objectives. Design The next important phase of the ERP life cycle is Design. At this phase, the objective is to create a detailed design for your new ERP system based on the understanding and requirements of your workflow. The participation of both vendors and customers plays an important role.
5. After the team gets the proper idea of the process, they can design a framework that meets these new procedures and requirements. A Gap Analysis can be most helpful in understanding the new system's intricacies and will help in customizing the new ERP system more efficiently. A good ERP implementation partner should be able to provide the best solutions to these intricacies or difficulties. Always try to incorporate your users at this phase to see the acceptability of the new Design. Your end-users will be the ultimate deciders of the system's credibility. Hence, their acceptance and experience should always influence your Design. Development After you have a detailed design plan for your new system, you move to the next phase, Development. The three main essential tasks to achieve at this phase are: • Configuring the ERP system • Customizing it as or where necessary and, most importantly, • Developing integration with any previous or existing application that the new ERP system can't replace. The primary objective of this phase is to build and follow the strategy that has been planned before.
6. Also, one crucial and sensitive phase under the development phase is data migration. Data Migration Data migration should be planned very carefully. The most common mistake that many enterprises make is migrating every historical data the business has. Is it really necessary to migrate 10-year-old data or the list of every supplier even though they are not with the company anymore? No, right? While upgrading or building a new ERP system, you have the opportunity to keep it clean and updated. Hence, use that! Testing Once you have developed the software, the next task is to test it. However, you can keep testing your ERP system while developing it. At this phase, your team is supposed to test specific modules of your ERP systems and their features. Depending on the results and retests, adjustments and fixes should take place. If you are developing multiple ERP modules, you can test one while developing the other. The initial testing of any software should be rigorous and pushed to its full capacity.
7. Once the internal testing is done, you can ask your employees to use the software for their day-to-day life. At this point, your team should keep checking all the bugs and fixes properly. Along with all these, the team should also test the migrated data and prepare a plan for end-user training. Deployment - Go Live This is the most significant moment of your ERP implementation cycle- going live. Most data have been transferred and migrated, the software has been tested, and product training is also complete. All your preparations that have been keeping your team on your toes for months now are going Live to the outer world. Deployment is very crucial since you open your system to your audience. There will be a lot of questions, issues, and stumbling even after training and onboarding. Many employees may face problems using the system in the early period. Your team should always stay on alert to address and fix any issue right away. It will take your users some time to get along with the system. Many organizations deploy all ERP modules simultaneously, while others value the high-priority ones. You can also run the older systems simultaneously with the new ERP software. The amount of time it takes to deploy enterprise resource planning (ERP) software at a company varies greatly depending on the complexity of your business. Still, most mid-market ERP programs take between 6 and 12 months to implement.
8. Support The final phase of a successful ERP implementation is support and update. If you think deployment is the ultimate goal, you are wrong. A great responsibility starts from here. Your users may face a hard time adjusting to the new system. Hence, the project team will still have to participate in this phase. The primary job of the project team at this phase is to • Organize weekly review meetings • listen to the feedback • Review and optimize your business process • Implementing additional configurations (when necessary) • Provide updates to the system accordingly If you want to achieve the highest benefit with a successful ERP implementation, you have to ensure user satisfaction. And this can only be gained through efficient support and regular system updates. ERP System Methodologies Companies should always analyze their ERP implementation method since the risk of failure can be significant and be an expensive ordeal. Most often, companies follow a typical methodology framework for ERP implementation.
9. The methodology should help plan, structure, and control the ERP implementation process and include templates and tools developed by the project team. You can consider the methodology as the roadmap before the real work of implementation of the ERP system begins. The most common methodology frameworks followed by a company are: • Company driven • Joint Venture • ERP Vendor-led • Company driven plus ERP vendor-led While company-driven ERP requires more rigorous planning, dedicated department, and software maintenance- all to be taken care of by the company itself, joint ventures are more similar. In the joint venture, similar companies invest in ERP implementation. However, a more economical and smart decision is to go for ERP vendors. They have their own proprietary implementation methodology that comes with templates, tools, blueprints, roadmaps, and many other state of the art tools.
10. Hiring an ERP vendor can save time and money and boost the efficiency of the work process. If you can dedicate an internal team to work with the vendor, it will bring greater results. Some of the most noted Erp system examples are: Sofyrus, SAP, Oracle, and Microsoft. How Much Does ERP Implementation Cost? The cost of ERP implementation depends on a lot of factors, such as • Size of the business • Complexity of the task • Number of users • Data migration • Customizations • Team size And a lot more. Hence, it would be challenging to state some random number as the ERP implementation cost. Many follow the typical rule of 1% of the total business running cost. This means you can estimate the implementation cost depending on the company's size.
11. As the size grows, the implementation cost will increase as well. Again, the complexity of the business plays an essential role in the cost. Looking for the best ERP vendor? Check how the Sofyrus can win the game of ERP implementation with their experience and efficient support! Typically, running a cloud-based ERP costs much lower than on-premises ERP. The primary reason for such difference is that the Sofyrus has all the technical setups. Hence, you don't have to worry about the IT setups or the cost behind the installation. Thus, using Sofyrus can save cost and bring better ROI than other ERPs. Final Words Implementing a successful ERP system is an extensive company-specific task that may significantly impact an organization's financial stability and growth. The process of ERP implementation is a complex procedure, but with the proper help, your business can quickly adapt to it. Hence, you should be very careful when choosing an ERP implementation partner. Their job will not merely surround providing support or maintaining the system but also advising and customizing when necessary.
12. Also, you should know the risks related to ERP implementation and the possible solutions! That was all about the process of ERP implementation. Hope you liked it!