What are the ingredients of an effective ERP implementation strategy?
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The first major elements include management education, involving key stakeholders in planning, and lining up outside help if necessary (while remembering that, in the end, the client, not the consultants, owns the plan).
One of the first things to decide is the ERP implementation methodology, which will determine how the project is managed. Generally, there are three types of ERP implementation methods to consider: traditional, rapid deployment and somewhere in between. Each has advantages and risks, and which one is the right fit depends upon the organization and its project objectives. No matter what anyone tells you, one size does not fit all.
While the methodologies have some steps in common, their focuses and deliverables set them apart. For example, the traditional approach tends to emphasize up-front discovery and design steps, such as current process analysis, improvement opportunities, "to be" processes and software knowledge transfer. It is traditional in the sense that it employs many of the software development lifecycle concepts that originated in quality management circles. The basic idea is "measure twice and cut once," with the goal of reducing back-end rework. The potential downside is slow decision-making and paralysis through analysis.
When is a rapid ERP deployment strategy a good idea?
Rapid ERP deployment strategies are geared toward getting there faster. They rely on pre-configured templates to drive software setup and on prototyping to flesh out the final design, configuration, and business processes. The methodology is meant to expedite decision-making, enforce zero tolerance for software modifications, reduce or eliminate interfaces and data conversions that can expand the project scope, and fit the business into software best practices. While few will argue with the intentions, the risks include quality issues and software that doesn't address business needs.
So which approach is best? The honest answer: It depends. In general, if management has set high expectations for the financial return on investment, lean toward the traditional approach. It provides more opportunities to re-engineer business processes and not simply automate them or have them be dictated by the software.
On the other hand, if the primary objective is to implement the software as soon as possible --and there are legitimate business reasons for doing so -- consider rapid deployment. But when in doubt, take the traditional methodology. Err on the conservative side to avoid the risk of shutting the business down when the software is rolled out.
Must-have steps in an ERP implementation plan
Every step in an ERP implementation plan is critical. However, the most successful ERP implementations place special emphasis on the following:
- Senior management roles and responsibilities. If managers learn nothing else, they need to understand their project responsibilities. No doubt, this will require education, coaching and follow-up. Such "upward delegation" of project tasks is absolutely necessary.
- Identifying all dimensions of project scope. Scope definition drives project expectations, schedule and budget. It is also a tool to control the project. Few deliverables merit formal management sign-off, but scope is one of them. What's more, many assumptions are made during the planning process. Document all of them and get management to sign off.
Most projects have a broader scope than first meets the eye. When left to interpretation, the definition can lead to surprises, such as "scope creep" and desperate, last-minute cuts to stay on schedule and under budget.
- Develop a valid schedule. Do your homework; don't just throw darts to come up with dates. Whether anyone likes it or not, the schedule must reflect reality. It must capture scope, resource commitments and the details that go into a project. It also drives the great majority of the budget. Develop an invalid schedule, and you will eventually blow the budget.
- Software knowledge transfer. Learning extends beyond the initial ERP project team training. There must be a strategy to manage the knowledge-transfer process throughout the project cycle. The more knowledge clients have, the more they are empowered to participate in the design, setup, testing and support of the software long after the consultants have walked out the door.
- Involve, listen and over-communicate. Experts can talk all day about sophisticated and expensive "change management" programs, but the task is really pretty simple. Get people involved in the issues that directly affect them, ask for feedback, address legitimate concerns, and over-communicate. Doing so will disarm 95% of those who might otherwise stand in the way of the project. It doesn't mean you should let every wish drive the project. It does, however, require planning for design reviews, software demonstrations, departmental meetings, and other communication events. Senior managers, the project manager and the entire project team are responsible for carrying out these tasks.
About the author: Currently an IT manager at a manufacturing company, Steve Phillips has 25 years of experience in implementing ERP systems. He is a member of SearchManufacturingERP.com's panel of experts. He blogs about ERP project management at Street Smart ERP.