The hallmarks of a successful ERP (enterprise resource planning) system are its ability to provide a single source of truth and real-time metrics for decision making. Selecting the right software for your industry and business is an important step of a comprehensive ERP implementation plan, but the system you choose will only be successful because of the processes and team that you put in place to support it. 

Learning from Failure: Why a Good ERP Implementation Plan Matters

With implementation hiccups by large enterprises in recent years, businesses have lost profits due to major planning oversights. Some of those reasons include: 

  • Rushing an implementation despite other internal setbacks and priorities. 
  • Building a system that isn’t scalable or fit for accelerating technological change. 
  • Migrating error-laden data from legacy systems into the ERP.

Couple these pitfalls with a lack of executive buy-in or an inexperienced integration team and an ERP system can do more harm than good. A strong plan is worth its weight in gold, and building that plan requires experience and a strong understanding of business needs and priorities. Have your finance team represented and deeply involved in the implementation process to leverage their expertise for the benefit of all stakeholders.

What Is the Cost of Implementation?

The cost of implementing an ERP is different for every organization, depending on several factors: 

  • Cloud ERPs vs. on-premise ERP
  • Number of user licenses or subscription fees
  • Customization of modules
  • Outside consultants 
  • Employee training
  • Additional IT and customer support

The Main Phases of ERP Implementation 

The ERP implementation process consists of several phases: 

  1. Assessing business needs
  2. Product and vendor evaluation
  3. Team identification
  4. Data cleansing and migration
  5. Testing and rollout
  6. Learning and training 

Like any digital transformation, each phase is supported by three main pillars: people, product and process. 

Steps of a Successful ERP Implementation Plan

1. Assess Your Unique Business Needs

Finance, HR, sales and customer service are universal needs, but certain industries require specific tools (e.g., inventory management for manufacturers or grant management for nonprofits). Do you engage in eCommerce, require HIPAA compliance or deal in multiple currencies? Planning on an IPO? Align your system with important industry and regulatory needs. 

But don’t try to fit in everything. Put special emphasis on your priorities. For example, if your sales team loves their current CRM (customer resource management) system, investigate an API (application programming interface) to tie it in rather than shifting to the ERP’s own CRM module.

2. Evaluate Products and Vendor Teams

Identify ERP leaders in your industry and establish must-have and wish-list criteria as you compare systems. Vet the capabilities of the software and the vendor team. Are there providers that specialize in your field? What degree of customization, if any, is needed if you pick someone else? Trade publications and industry colleagues can help narrow down your prospective vendor list. 

3. Define Project Roles and Responsibilities

Project success is determined by the individuals involved. After identifying needs with your entire team, it’s time to align the organization on the ERP implementation plan and define roles that are critical to success. 

  • Executive backing: C-suite understanding and buy-in is necessary to create business cases, allocate substantial resources and keep momentum amid challenges. 
  • Financial controller: An experienced controller oversees ERP implementation as a product owner to ensure that processes are optimized and outputs are accurate for future reporting. 
  • Implementation team: Match select team members to roles as business application owners, project managers, developers, quality assurance team members (QAT), user acceptance testers (UAT), trainers, etc. Remember that decisions should not be made in silos.
  • External partners and internal stakeholders: Software vendors, relationship managers, payment processors, consultants and others can help speed up—or delay—your ERP implementation process. 
  • End users: The most important input is from those who will actually use the ERP. Create a sense of ownership by integrating them into the process and asking for feedback. 

4. Prime Your Data 

Data from legacy systems requires cleansing and mapping. Ensure that transactional data produces expected outcomes when making calculations (e.g., applying sales taxes or commissions) or when using it downstream (e.g., when insurance policy data is used by a claims system).

Identify the types of data you have, any format variances and potential issues in your data migration. Conform to the ERP’s native formats and minimize customizations that would need to be accommodated for in every release and update. 

The information you can pull from an ERP system is endless. Exercise restraint by identifying day-one deliverables that are needed to run the business. What is essential for your dashboard reporting? Steer away from replicating every previous report and work toward streamlined testing and production.

5. Test and Launch

Comprehensive testing is key to any successful ERP implementation. Incorrect field mapping can be readily resolved, while complex computations and system integration issues may take a significant amount of time to test and rectify. Hit key testing areas early, then hone in on the details.

Finally, determine the optimal system deployment strategy. The big bang approach, phased rollout or parallel rollout each have their benefits and challenges. Identify dependencies such as bank interfaces, printing modules and others as you evaluate what is best for you. 

6. Learn and Train

Once you’re launched your ERP system, it’s vital to continue getting feedback from your employees. At the same time, you should be providing training for your employees to help them adjust to the change and to create standardized procedures for its use. 

Critical ERP Implementation Best Practices 

An ERP system may look good on paper, but it doesn’t guarantee future success if the system does not meet the specific needs of your team. While an ERP system is a useful tool for any business, ask the right questions of your business first.. 

Don’t Ignore Detractors 

Reality dictates that not everyone welcomes change. While some resist change, others may feel resources could be better used elsewhere. Ignoring detractors is not the answer. Acknowledge their concerns, value their input and engage them in the process. Change management is an important part of migrating to a new system. 

Address Talent & Skill Requirements

Identify any skill or knowledge gaps and investigate options to resolve them. If you anticipate an ongoing need beyond the project, consider the benefits of fractional expertise to support team bandwidth and assist in optimizing your system processes. 

Avoid Garbage In-Garbage Out 

Ensure that you’re not bringing old problems with you into the new system. Part of your ERP implementation plan should include a review of your workflow processes and data quality. Find ways to improve workflow delays or eliminate inaccuracies to get the full return on your investment. 

Design Your ERP Plan

Migrating to an ERP system is a significant milestone in a company’s lifecycle. If bandwidth or project experience limits your team, Paro’s network of freelance financial controllers can help guide your success. With prior systems implementation experience, industry knowledge and quick onboarding, you have the ability to access a flexible solution as you need it.