Understanding ERP Implementation Phases

A vital first step to updating your company’s software is understanding ERP implementation phases. Whether you plan to try and tackle the project yourself or work with a consultant, it can be extremely beneficial to know what steps you need to take along the way.

Keep in mind that most of the steps below will need to be done and fully completed before moving onto the next ERP implementation phase. Like building a house, it is much harder to make corrections later in the process than it is in the beginning.

1. Establish the Project

This is almost like the first step before the first step. For your company this might be as simple as making the decision to do an ERP implementation. It could be represented by an email from the CEO to the CFO okaying the project or signing the contract to purchase a new software product.

2. Initiation

This phase is where the process really gets started. An ERP implementation team is formed, gets organized and starts gathering data. The person who negotiated the contract may know what software was purchased, but what if nobody else does? Now is the time to get all of that information put together.

3. Analyze Your Needs

In this case, analyze refers to finding out what is needed from the new software. What are your actual requirements? What is your business model? What kind of needs does your company have to implement the new ERP? This ERP implementation phase usually ends with some sort of requirements document that is signed off by upper management, to confirm what is needed from the ERP implementation.

4. Design the New Software

Now that the requirements are known, it is time for the developers to work on designing the software. A critical part of this step is communication. The developer can decide what programming will be done to the software to meet the requested requirements, but someone on your end must confirm and approve the programming before moving forward.

5. Configure the New Software

Configuration happens when the technical people who know the new software start setting it up with the specific items your company needs. Sometimes, this phase occurs at the same time as design. It can involve such things as creating a special kind of purchase order form, or another document vital to your company’s operation.

6. User Acceptance Testing

UAT, also known as User Acceptance Testing is another critical phase in an ERP implementation. Choosing the right people for testing is really important, be sure to pick subject matter experts who will actually be using the software. Testers will need to ensure the new program is going to do what it needs to do. A less experienced user could approve software missing an essential feature, costing your company time and money later.

Also, don’t make the mistake of waiting until the software is completely built to test it. Find the bugs and issues while it is still easy to repair them.

7. Train the Users

Once the software has been tested and is stabilized, it is time to start training. While you may have only trained a few key people for testing, now you need to bring in everyone who is going to use the software. Again, it is important to choose the right people to train as you need to discover if any features are missing or work incorrectly. This phase can take a while, but it is one that absolutely cannot be skipped or pushed off until later.

8. Integrate the New Software

Often an ERP system needs to integrate (or communicate) with other software. Maybe your new financial application will communicate directly to your bank’s system so that reconciliation of accounts happens automatically. These integrations need to be tested as well to ensure the software will do what you need it to do.

Take note that integration can happen concurrently with other ERP implementation phases. For instance, you may have to discover what integrations are needed back on the analyze step and continue to work on these throughout the project.

Other steps that can happen concurrently with the rest of the phases are change management and data migration.

Change management refers to the people side of an ERP implementation project. This could be getting everyone in the company on board with the idea of getting new software, or picking your implementation team, or getting everyone to use the software once it is deployed.

Data migration is moving your company’s data from your old legacy ERP system to the new ERP. It could be anything from customer files and shipping orders to accounting data. While it may seem like this would happen only at the end of the process, this phase needs to begin right away. Cleaning up and organizing the data early in the project will help make the transition as smooth as possible.

Project management is another phase that basically runs concurrently to every other step. It starts the moment you decide to do an ERP implementation. Project managers are the ones ensuring that each phase is started and completed before moving onto the next one. These are the people behind the scenes making it all happen.

9. Deploy the New Software

This is when you finally launch the new product and go live, after every phase above has successfully been completed. This is where your company begins reaping the rewards of all the hard work that went into the project. Employees start using the new software and getting rid of previous pain points and you begin seeing efficiency in areas that were previously held down by antiquated software.

Whether you want to take on every step above, or work with an experienced consultant, understanding ERP implementation phases can mean the difference between a successful project and a failure.

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