When it is done correctly, starting an ERP project is no easy task. Whether you are undertaking an implementation or an upgrade, you must consider the size and scope, the resources required, if you have the skillsets, and if you are going to work with a partner to deliver it.
So, how do you make sure you consider all these relevant variables and more without missing anything out?
Below we cover 5 things to consider when starting an ERP project to help get your project off to a strong start.
To get a better understanding of what Enterprise Resource Planning is, check out our ERP Guide
1. Defining the Business Requirements and Scope
Often this can be one of the most difficult things for businesses who are starting an ERP project. Setting out clear requirements for what the system must do requires a deep understanding of business processes along with how users of the system work.
Considering every function of your business and how these all interact takes considerable effort and translating that into People, Process, and System requirements takes a particular skillset and breadth of experience. Sometimes the ability of the internal team to look beyond the “As Is” and define the improved “To Be” can be a challenge.
Investing the time and effort up front in getting a strong grasp and definition of your business requirements and scope will be key to success. Note that we are talking about business requirements at this stage – take a business led approach. Define your business requirements first and then this will inform what the system requirements are. Do not fall into the trap of engaging an ERP vendor first and then trying to work out what you need the system to do.
2. Managing Budget and Time Constraints
Managing budget and time constraints are key challenges with every ERP project. First, pinning down a realistic budget that matches your scope and ambitions can be difficult. Aside from the technology costs, you must account for many variables such as licence types, user numbers, custom modules, and cloud vs on-premises. There are also the associated implementation services costs which can be difficult to estimate up front and needs considerable management from your own side to control as the project progresses. So, it can be difficult to nail down a realistic budget particularly if you have not experienced many ERP implementations. And this is before you consider the resource cost of internal staff members helping with the implementation and the lost productivity.
Second, delivering an ERP project on time is notorious for its difficulty. It needs adept and experienced project management. Just because your team might be the best operational people, does not mean they will be strong project managers. Another trap to avoid is assigning a key member of staff the project manager role and expecting them to do it alongside their day job. The reality is that their day job will always take priority and when operational issues hit, the ERP project can come to a standstill.
When starting an ERP project, the best way to prepare a budget and timeline is to be realistic. Take time to research typical costs of solutions and ensure they meet your needs now and in the future. Also, ensure you get a full and realistic picture of all costs, not just for phase 1 but beyond. Get a feel for typical ERP vendor implementation times for your size of project, understand their current resource availability and project demands and factor in business seasonality and holiday periods for your own resources. Remember that the people leading your change internally will often have other tasks to manage too. Always consider how this will impact your ERP project when selecting key goal dates.
3. Looking at your Current System
One of the first steps when starting an ERP project is looking at the current systems that are in place. While a new ERP solution can often seem like the only approach, it may be possible to upgrade or optimise. Upgrading by adding in extra modules might be a cheaper, and easier alternative to a full ERP replacement project. You could even achieve better utilisation by optimising your processes and ensuring all the built-in options are being used to their full potential. Sometimes a lack of understanding and training can lead to features going unused that could boost productivity.
Even if your current solution cannot be upgraded, it is worth understanding how staff members use it. Take time to observe and interview the most frequent users to see how they work and what they need the system to do. Internal manuals may lay out how to use the current system but often those using it daily will have formed their own methods and work arounds for common scenarios.
To fully understand your current systems, you should ensure you take a holistic approach. Understanding how departments interact, or don’t, can be a deciding factor in upgrading or implementing a new system. The deeper your understanding the better solution you can put in place.
4. Building a Team
Ensuring that the team you put together have the skills for a change as large as an ERP project is vital to success. With so many moving parts and departments, you will need a varied skillset across team members.
First, someone who has strong and relevant project management experience is incredibly important. Leading a team is difficult at normal times before adding in the stress of a business-critical ERP project. An experienced project manager will bring the skills to keep everyone on track and working towards the same goal while providing accountability for the success of the ERP project.
Second, having a group of people who are subject matter experts (SME) will provide insight into unique business processes. These are people who spend most of their time working on the project and have superior knowledge of current processes. This team will ensure the new system is configured in a way that is usable within your business. Furthermore, they will be the users who test the new system with real world scenarios and assist in the training of other staff members. Having people who can work in teams and communicate is key to ensure project success.
Finally, key users will be needed from the early stages of an ERP project. They work with the SME to define business processes and highlight their needs from a new system. Getting participation from this group early can help by making sure vital needs are not missed out. This team will also help during the validation stage towards the end of a project.
This is the minimum you would be looking for in building a team to deliver an ERP project. You want to ensure a mix of skills across each member of the team to mitigate the chance of project standstill in the case of sickness or absence.
5. Understanding What an ERP Vendor Will Do
This is something that many companies setting out on an ERP project overlook. While they work with an ERP vendor, they often find it difficult to understand what their responsibility is and what is the vendor’s. This often causes frustrations and issues as the project progresses. Certainly, at the outset businesses sometimes don’t appreciate what the ERP vendor will do as part of the project delivery and what they will be expecting you to do yourselves.
This can cause confusion, delays, and budget/timeline disruptions. Make sure you have open and transparent discussions up front with your chosen ERP vendor. This will help you avoid any nasty surprises once implementation has begun. And make sure you have the right resources and skillsets in place at your side to deliver the ERP project.
Conclusion to 5 Things to Consider When Starting an ERP Project
Now that we have covered what you should consider when starting an ERP project, you can start to work on creating your own plan. While it is an incredibly complex process, forward planning and investing time and effort up front goes a long way in successful ERP implementations.
If you could benefit from help and support in getting your ERP project up and running, then get in touch with us today to discover how we can help.