As much as you might like to believe otherwise, implementing an ERP system is not a one-time event. Instead, implementations have become an ongoing process for manufacturers, especially as they adopt a more return on investment (ROI) driven approach for their technology investments. Between rolling out new modules or functionality, bringing another factory or division on-line, or upgrading to a newer version, ERP implementations can last for years.
When implementing an ERP system, the correct approach can make all the difference between failure and success. According to a recent industry analyst report, more than 40 percent of ERP implementations failed to deliver a significant ROI, mainly due to poor implementation planning.
You need to get most from your ERP investment in these tight times. Therefore, your implementation must be as successful as possible. The following are the key steps for a successful ERP implementation: focus your efforts, build the right team, secure commitment and support, and manage and execute.
Focus Your Efforts
The foundation of a successful ERP implementation is a business case that ties the project to specific strategic objectives and business drivers. The business case identifies the project's expected improvements and benefits and focuses the implementation. You can also use the expected results to secure the necessary management support and funding for the project.
To develop a successful business case, first review your current processes and link them to your company's strategic objectives such as improved visibility, cost reduction or increased responsiveness. Next, determine how these processes can be streamlined and then estimate the value of the expected improvements. Many companies validate their estimated performance improvements by using industry benchmarks.
The end result of this process is a defined project scope — a list of expected improvements and estimates of how the results will support your company's strategic objectives.
Build the Right Team
An essential component of a successful ERP implementation is a strong project team and an involved management steering committee.
The project team is responsible for ongoing implementation activities. Because ERP systems often impact many areas of your business, it is essential that the project team includes members from all departments as well as implementation specialists from your ERP vendor. The project team also requires a broad mix of skills, knowledge and experience-everything from a detailed understanding of business processes and knowledge of the technology being deployed to solid communication and interpersonal skills. Be sure to assign an overall project manager to establish a clear chain of responsibility and authority.
Another element of the right team is a management steering committee that provides executive oversight. The committee should consist of managers who have a stake in the outcome of the implementation and who will ensure visibility and support of the project.
Secure Commitment and Support
ERP implementations are most successful when there is a broad-based and long-term commitment to the project — everyone from senior executives to end-users.
Users, the project team, steering committee, executive management — in fact all company personnel — must be excited and involved in the implementation project. ERP systems transform day-to-day operations so the entire company must be willing to participate to ensure success.
One way to gain commitment and support is to hold a kickoff meeting. The entire project team, including users, IT staff and vendor personnel, should participate in a one-day session to review the project plan in detail. Separate, shorter meetings should be held to update the steering committee and executive management team as well as announce the project to all employees. The project kickoff meeting should:
- Demonstrate senior management commitment and support
- Explain your company's business case and objectives
- Review the project's scope
- Identify the project team, including their roles and responsibility
- Present the project plan and timeline
- Identify a method of ongoing communication about the project's progress, such as an Intranet site/In-house magazine
Manage and Execute
While each ERP implementation is unique, the level of risk and potential reward requires ongoing attention and involvement to ensure the project is completed on time and on budget.
As the implementation progresses, the project team should plan, script, and execute a series of conference room pilots. These tests demonstrate progress in meeting business requirements and provide an opportunity to identify and resolve issues before moving forward. Additionally, they are excellent opportunities to obtain buy-in and support from the management steering committee.
The management steering committee also plays a vital role in managing an ERP implementation. This committee should meet at least monthly to review project status with your internal project manager as well as the implementation manager from your ERP vendor.
Ultimately, the user team then plans, scripts and executes a full test of the new system to demonstrate and validate that the business solution is complete and correct. This is an essential but often neglected phase in the implementation process.
Conclusion
While implementing an ERP system — or even adding new functionality — is not the easiest of undertakings, it can be done effectively. By maintaining a focus on tangible objectives, creating the right team, keeping all employees involved and informed and properly managing the project, ERP implementations can deliver tremendous value for your company.
