Posts Tagged ‘ERP Implementation Tips’

A few tips from Panorama Consulting are worth considering before a company attempts to convert to a new business system, which we thought we’d reprise for readers today.  They’re culled from the original post here.


To position yourself for success they suggest…

  1. Validate the scope and timing of your project. This is the basic stuff: Make sure you’ve scoped out the right modules, the right number of users and the right types of users (for example, ‘full users’ can be costly while shop-floor users are usually purchased for considerably less).  Ask questions to see what add-ins might have been used (report writers, 3rd party aps, etc.) during the demo you saw.  Be sure you purchase the right licensing type, and know what maintenance costs will be each year for the whole implementation going forward.  Remember too, you don’t have to buy all the software upfront.  (We often tell users to buy just what they need initially, which saves short-term purchase dollars, and saves on unneeded (for now) maintenance costs.)
  2. Source your internal and external implementation project resources. While a vendor may be anxious to get started (and make a sale), be sure you have your ducks in a row; that is, be sure you have the right team in place, including business analysts, knowledgeable managers, IT, shop floor, etc.  Roles and responsibilities need to be assigned early on, and project leaders at both client and vendor teams need to be clearly delineated.
  3. Build a complete project strategy and plan. Beyond what your consultants or vendor can do for you, project implementation requires careful planning and attention to a lot of details.  Be clear about every step of your processes and workflows, or it will trip you up during implementation when you can least afford it.  With your provider, draw a map of all key workflows so that together you can determine how they’ll fit, both software-wise and process-wise, into your new system.
  4. Begin key implementation critical path activities. Delays related to people and processes will derail an ERP project far more often than technical IT or software issues.  Where will the data come from (transfer or key-in)?… Who will be trained, and when, where?… Who do you turn to with workflow questions during implementation?… Who approves changes?  Consider these sorts of critical questions before you start down the road of full-on implementation.
  5. Define your project charter. Have you set out clear project and structure ‘governance?’  A project charter that includes plans, roles, responsible managers and stakeholders ensures that when the inevitable questions do arise, a clear chart of responsibility will make answering those questions clearer and better defined.  And be honest: companies only go through these kinds of projects every ten years or so – so don’t expect to be experts.  By all means, work with your provider to help answer some of these questions and to provide templates or examples from their prior implementation experiences.  Your provider should be able to provide a lot more than just selection expertise.  They should also understand about business, project strategy and the dos and don’ts of successful implementations.  So don’t be afraid to ask them.


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Panorama Consulting does a nice job of summing up their view of the key questions companies should ask themselves before embarking on an ERP implementation.  We would concur with virtually all of them.  While a different ten could be just as valid, these are a good starting point for ensuring your implementation team has asked the right ‘big questions’ before the hard work begins.  We’ll reprise them here today from an original posting they did here, adding a few comments from our own experience as well.


  1. Do you have the right team? You want the A Team, freed up when necessary to put serious attention to the new plans.  Add to that your vendor team implementation lead consultant, and project managers from both teams.  They should be in on all key planning meetings.
  2. What will the project’s org chart look like? Project roles need to be clearly defined.  Include project management, the core team, functional and technical resources, and key managers who will be involved in the business process analysis.
  3. What will the total cost of ownership (TCO) of the project be? Remember that project estimates are just that – estimates.  Leave margin for error for things not considered, discussed or discovered initially.  Don’t forget hardware, lost productivity or hidden costs beyond your vendor’s purview.
  4. What is the business case (cost justification)? There is always a projected ROI (Return on Investment), or you wouldn’t be doing the project, right?  Beyond the immediate exigencies, be sure you’ve identified the long-term cost benefits – they are often huge, and easily can justify a project.  Establish benchmarks or metrics early on, while understanding that it may take longer to reach them than originally projected (it’s the nature of the beast).  Each company will have its own business case, but yours should be widely shared and understood.
  5. What is your overarching implementation plan? Be sure you’ve worked out things like data migrations (there may be more than one), conference room pilots, necessary modifications and a user training schedule with your vendor.
  6. How will you handle third-party or external program integration? ERP systems don’t typically handle every single aspect of your business – and even if they could, that doesn’t mean that their approach would be your best choice.  Third party applications enable users to choose among best-of-breed solutions to narrower project requirements like shipping modes, EDI, e-commerce and other needs.
  7. What organizational change management strategies and tactics will you deploy? Roles, processes and sometimes even people will change, post-implementation.  Make sure you’ve thought about that ahead of time, so a clear transition strategy can be embraced.
  8. What project governance and controls will you put in place? Poor project management can, as Panorama notes, run a project off the rails.  Be clear ahead of time about who makes what decisions, how they will be made, what controls you will have in place and what issues or decisions will need to be made by the project steering committee.
  9. What milestones will you use to evaluate progress? Take time to evaluate your project at regular intervals, and identify key project criteria that you will compare to with each one.  Don’t be afraid to pull the cord to temporarily stop a project when things go off-track mid-course.
  10. How will you define success? Or as we like to say: What does ‘done’ look like?  This might be the hardest one of all, since continuous improvement – and ERP is simply a tool for continuous improvement – is never ‘done.’  It might be as vague as being better off than before, or as concrete as adherence to a fixed ROI figure.  Each company is unique.  Just be certain in the early going to have some frank internal discussions about what the right success metrics will be for your unique project, and its corresponding investment.


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metrics_mfgIn our prior post we talked about the metrics often applied in manufacturing to determine whether a company is best-in-class, or merely adequate, that companies use to identify and then improve their strategic performance.  We noted how manufacturing education associations like APICS and MESA have created metrics guidelines to help companies analyze their own strengths and weaknesses.  And then, because after all we’re all about ERP, we noted the difficulty in making the leap from identifying key metrics to actually implementing improved operations, controls and workflows through ERP.

Today then, a quick look at a couple examples drawn from the experiences of manufacturers, as identified by some consultants at a firm called Edgewater.

One company was a biotech firm headquartered in Kentucky with branches worldwide.  Possessed of an entrepreneurial spirit, the CEO was known as a “go, go, go” style of leader.  Their greatest challenge was to use technology in ways others had not.  They needed to bring global acquisitions into the family in quick and agile fashion.  They were a big user, as are many others, of Microsoft technology, from “the stack” through ERP (Dynamics).  They chose to employ a global infrastructure (via Azure) to minimize the investment within a specific country – where they’re opening several outlets per month – and crank up hundreds of servers quickly to speed the process.  Here, the platform goes hand in hand with ERP to ramp up quickly and cost-effectively on a common platform.

Another company was an Arkansas based poultry processor (of five millions chickens a week!) with challenges very specific to their business processes.  As their I.T. director notes: “In each of our independent processing locations we consider how they perform, accounts payable or accounts receivable, and ask each one: Is this a market differentiator for us? Is it something that sets us apart? Specific business process owners must justify keeping a process at an individual location; if they cannot, we eliminate those processes and standardize them across the organization.”

Here, it’s all about those ‘best-in-class’ competitive differentiators that a SCOR metric (noted in our prior post) helped them to identify and address.

But above all in these and other cases, it’s always about the results.  To do that, the CEOs had to be sold on the idea that a lot was going to be asked of their team.  As one I.T. director pointed out succinctly in speaking of his firm’s ERP project:

“In order to be successful, we had to make some assumptions about the level of effort required from non-IT people. Fortunately, our CEO bought into that completely and committed those resources, making it really clear to all the VPs that whatever we needed to do to make it successful was what we were going to do. I didn’t have to spend a single minute trying to convince anyone about what was required of them or what we needed from them. Having that full buy-in from senior leadership down made a huge difference.”

It’s a lesson well-learned and hard-won – one even we as implementers today must remind ourselves of from time to time.  ERP is hard.  As providers, our job is just as stated above: to convey to our clients how committed their team needs to be to owing the process.  It’s a lesson we never can learn well enough.

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erp-mistakesRick Cook writes about computers and ERP from time to time on Toolbox.com.  Recently he posted some comments about “ERP Implementation Errors for SMEs” that we thought worth sharing.

Cook notes that small businesses are different from large ones in that they often lack the experience, expertise and resources necessary for a good ERP implementation.  As a result, they often make mistakes.  At the same time, notes Cook, in some areas, big and small companies are the same, in that some activities require just as much work from the small firm as from the large.  Following are a few of his comments…

Skimping on Selection: “It is important to take the time and effort to get the ERP package that most closely meets your needs. This isn’t significantly less effort for a small company than a big one.”

Not Allowing Enough Time: “One of the other things that doesn’t scale well for small companies is the amount of time it takes to implement the ERP software.”

Size of the Team: This is determined more by complexity than company size, but you must ensure you “have all the bases covered” when putting together your team.

Shorting on Testing: Here we’ll quote Mr. Cook verbatim: “While the amount of time you need to adequately test an ERP system will vary somewhat by the size of the company, the basic process doesn’t vary that much. It depends much more on the complexity of the installation than the size of the project.  Make sure you allocate enough time to the test phase to run down the bugs and other problems and correct them. There’s a temptation in a company of any size to underestimate the time needed for testing, but if you skimp on this phase, you simply add to the time you spend debugging after you go live.”

Allocating Resources: “ERP is expensive to implement and that’s true of any size project.”  The point is, it’s important to get a fair estimate, and to budget appropriately, without skimping on training and ensuring that users have fully thought through the processes, and their roles within them.

And lastly, one we see too frequently…

Treating the Implementation as an IT Project: “Because ERP is built around technology there is a tendency at many companies to view it as an IT project and expect the IT department to lead the way.  This is a mistake in any size company, but it tends to be especially important in small companies because they don’t have IT departments that can take the strain. ERP is a company wide effort and it needs to be led by general management.”

Cook’s words are worth taking seriously, as we’ve seen it too.  Do it right, and budget your dollars and time accordingly.  Partner with your provider, and if you don’t feel they’re a good partner fit, have the tough conversation with them, or find a new provider.


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erp_pic2Recently a company called Panorama Consulting Solutions held a small boot camp in California for a few companies (about ten) about to implement ERP systems, where they heard from end-users of companies about to go through the process about what was on their minds.  Today we’ll share a few things learned:

  1. ERP implementations are generally part of a larger business transformation. While participants attended the “boot camp” to learn more about ERP implementations, it was roundly acknowledged that business transformation was the real subject they wanted to learn more about.  Apparently, there is a common struggle among companies wanting to know how best to manage their business transformations – including not just ERP but organizational change management and business process analysis and reengineering. 
  1. Customization is a common fear. But, as Panorama’s own ERP Report 2015 noted recently, more than 90% of companies end up customizing their ERP systems.  As we ourselves have noted over the years, with our focus on manufacturing and distribution firms, it’s virtually impossible to avoid – but those customizations also encompass some of the most valuable ROI to be found in the entire implementation!  Such customizations are what ensure that you, as a company, can remain you as a competitive advantage.  As we’ve learned: Don’t be afraid, be thoughtful.
  1. Don’t be fooled by unrealistic expectations. This is perhaps the big one!  At the boot camp stories were told about “quick hit implementation proposals that will be impossible to execute and a host of other misinformation common in evaluation processes.”  One of the keys to a successful ERP implementation is to define a project plan, budget and resource needs that are realistic and give you the best chance for success. Misaligned expectations early in the project typically lead to a domino effect of bad decisions and corners getting cut later in the project.

Our own experience from nearly 30 years of accounting and ERP implementations serves to confirm Panorama’s boot camp’s conclusions.  The good news is that companies with a clear sense of focus and a well-discussed (and well-communicated) plan are on the road to success.  But as always, there are few shortcuts, and a lot of salespeople out there willing to sell you a bill of goods, or a barrow full of just want you want to hear.




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steps to better erpA blog called Inside ERP posted a few cogent tips for those looking to improve the odds of success in their implementation efforts, in a post published at the IT Toolbox (here).  Their tips “start at the top” by reminding us to…

  1. Get support from the top. Remember, ERP is a business-wide project, so it requires executive buy-in at all key stages of the project.  As one provider noted: “Starting with senior leadership, there needs to be overwhelming support for a new way of doing things to encourage cooperation and adoption.”
  2. Assign a dedicated project lead. Whether internal or external, there needs to be an experienced project leader at the helm to safely guide implementation through the various political and technical challenges that the project will face. Look for someone that is persuasive, has good political skills, is an effective communicator and has enough domain experience in the matter to understand best practices. 
  3. Define organizational needs up front. At our firm, we include this as an integral part of our “Business Process Analysis.”  Define the business needs, and ensure that the software project is mapped to your firm’s required workflows and processes.  Create a list of requirements and desired outcomes at the start of the project.  You need to know at the outset “what success looks like.” 
  4. Plan for scope creep. Scope creep is usually feature creep.  It’s important to set realistic expectations at the start of the project.  Setting milestones and individual responsibilities will help.  Of course, you’ll have a process for change-orders and their approval in place, right?  Regular project meetings will greatly help to ensure that projects are staying on course. 
  5. Be ready to adjust business processes. Rather than taking the path of least resistance by avoiding “meddling with existing business processes,” recognize that an ERP implementation is the most ideal opportunity you will ever have to change and improve your processes and workflows.  Where possible, make the changes and the software work in synch.  If you only implement a new system in order to mimic the processes of the past, how are you really improving the business? 
  6. Give training its due. According to Gartner research teams, “75 percent of enterprise ERP implementation failures come from lack of end user adoption.”  Your staff needs to understand the new ERP system and how it benefits them and the company overall. They also need to know how to use the ERP system properly.  Training is overlooked or under-budgeted completely at the risk of the project.  Translation: don’t do it!  Don’t shortchange training.  It’s where the rubber meets the road, and it ensures your staff that you care about them – and about the success of your project!

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erp tipsCompanies doing ERP projects should realize that it’s not an IT project – it’s a business project.  It affects all areas of the company.  Politics and complexity must be balanced.  So we thought the following 6 quick tips from Mae Kowalke written for the IT Toolbox did a very nice job of quickly encapsulating a few important things every project team should remember:

  1. Get support from the top. ERP is a business-wide project, so it needs executive (C-Level) buy-in.  If it doesn’t, the project will struggle mightily later, and eventually get bogged down in politics and infighting among even the best of intentions.  And that senior leadership needs to show interest and stay concerned throughout the rollout.
  1. Assign a dedicated project lead. Companies need an experienced project leader – whether they are an internal resource or an external one – to safely guide the implementation through the many challenges it will face.
  1. Define organization needs up front. Be sure you have defined, and everyone understands, the business objectives you are trying to accomplish.  The clearer you can list your requirements and desired outcomes at the start, the better your odds (and often, the lower your cost, because you’re not spending time and money on unplanned or unneeded features).  Can you define what project success looks like at the start of your project?
  1. Plan for scope creep. Set realistic expectations and plan accordingly.  But also plan for changes.  They always happen.  Setting milestones will help clarify project step success criteria.  Have a robust process for signing off on changes, to ensure they are necessary and meaningful.  Plan and keep regular status meetings between your company and your consultant providers to review project progress.
  1. Be ready to adjust business processes. Sometimes, the best thing you can do is change a business process, whether to match the software, or vice-versa.  Either way, ERP projects are THE time to analyze, change and improve processes.  Fix what’s broken while you get a fresh start.
  1. Give training its due. (We couldn’t agree more.)  According to Gartner,               “75 percent of enterprise ERP implementation failures come from lack of end user adoption.”  Training is all too often overlooked or short-changed during the budgeting process.  Resist the temptation to do this.  “When you overlook the need for adequate training, you lose insight into the business results that are desired,” notes Amy Whetzel, director of ERP consulting operations for BroadPoint Technologies.  We couldn’t have said it better.

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