Once you’ve decided that a new ERP system is what’s right for your business, the next step is to prepare for implementation. ERP implementation failure is common. This is because there are so many factors that go into this being a successful transition. Too much change that wasn’t properly prepared for can disrupt the flow and order of a company and cause more problems than you began with.
It’s important to think ahead when making such a big change within a company. There are many factors to consider and to prepare yourself and the staff for. One thing that’s helpful in this planning is to come up with a person who will help manage this transition. An effective change management plan is going to make all the difference when making so many alterations within your business’ workflow.
The things you’re going to have to think about in order to succeed in this process are hidden costs of implementation, how to get your staff comfortable with the changes, and the process of going live.
How to go live
Change can bring disruption within the company. Avoid this by clear communication within the members of the staff about any anticipated disruption and allowing a substantial amount of time for user training. Bring together a project team. This team of people will all play a vital role in having this transition run smoothly and effectively. You’ll need a project manager, application analyst, application developer, and QA test engineer. You should also hire an ERP implementation consultant if you can afford to do so.
The different departments within your company will all also play a vital role in this process. Each should have their own designations and responsibilities. Senior Management should be in charge of analytics and reporting, while Accounting can take care of general ledger, accounts, asset, and cash management. Engineers and shop floor staff should be directed to look after production scheduling, document management, and designs. Shop floor workers can also be in charge of inventory management. The Sales Department should be in charge of forecasting and CRM functions, and the Warehouse Staff should look after Inventory, WMS, SCM, and device integration.
The next thing to do after having a strong team behind you to help manage this process is to plan out the implementation in steps. This includes forecasting implementation costs and drawing up a budget, creating an ERP implementation schedule, migrating data to the new system, training your ERP user base, planning on-the-day go-live activities, and evaluating the success of your project.
Drafting a budget
According to a recent Softwarethinktank analysis, 35% of ERP implementations were over budget by 0-25%. 15% were over budget by 26-50%, and 6% were over budget by more than 50%. As you can see, over half of ERP Implementations run over budget. It’s a tricky process, trying to plan out what you can and should spend on this transition, but there are some costs you can forecast. Studies show that an ERP will require at least 1% of an enterprise’s annual gross revenue, so that is something to think about. You also need to take into account the cost of hardware and network upgrades, staff overtime pay, vendor training and customization fees, and the costs of data backups and storage.
After you’ve planned out what needs to be done and what it will cost you, the first step is data migration. Data migration consists of a few key steps- database cleaning and verification, database set-up, mapping legacy to new database fields, data transfer to the new system, testing and verification of legacy data, and testing and verification of new data inputs.
The next thing you should do following data migration is to train your workforce on the new system using both in-person and e-learning methods. It’s very important to have everyone fully understand the aspects of the new workflow and systems to prevent common mistakes and to prevent wasting time correcting errors. It would also be helpful to identify some promising tech-savvy staff members to train as ERP Superusers. They can be leaders within the staff community and help others to learn the new system.
Following employee training will be to plan and initiate go live activities. The following steps will need to be taken- system testing, staff scheduling (including required overtime or temporary staff), identifying metrics for project evaluation, creating a communication strategy for system downtime, network speed and reliability checks, and data backup processes. Throughout this entire process, one must remember that communication is key. It is what will help this process to run seamlessly and will have everyone on the same page.
After your ERP is established and running live, all that’s left to do is to analyze whether or not your ERP Implementation was successful or not. You can look at a few things to see how the change has impacted your business- whether it’s for better or worse.
Do you have an increase in ROI?
What do your sales look like? It’s always a good sign when you are making money on your investment.
Has there been a decrease in human error?
If your ERP system is running smoothly and efficiently, there should be less mistakes made and less confusion within the departments of your company. This also ties into productivity levels. Less human error means less time wasted, and more time to be productive in bettering the business.
Has there been an increase in client satisfaction?
If your clients seem happier, that really is the goal at the end of the day. Happy clients mean a better reputation for your company and more sales for your business.
One way to minimize changing the aspects of your company’s workflow that you actually find positive and productive, is to utilize a system which customizes to your company’s workflow. Many ERPs are cookie-cutter systems which have you edit the processes of your company to fit their standard systems. It’s smart to also have a software which can integrate with your ERP and provide customizable solutions to your business’s unique challenges. While simply utilizing a standard ERP may be okay for some, more intricate or larger companies will most likely need a solution which can account for their specific needs. An example of this customizable solution exists within the SkuNexus software. With a software such a SkuNexus, you may find that you don’t even need an ERP, as SkuNexus can integrate the separate aspects of your company’s workflow just as well. This integration can include any of your financial records and software which manages those aspects of business.
SkuNexus is an order/inventory/warehouse management system which can connect with any ERP while also unloading some of the ordering be completely customized to fit a workflow that fits your company. Special features and abilities can be easily built for you to provide you with the smoothest integration between parts of your workflow processes. Click here to contact SkuNexus for a demo today to find out how this could be the right system for you.