The New Rules of ERP Implementation Success

ERP implementations aren’t naturally destined for failure. The key to success lies in understanding the enormous scope of such projects, and finding someone who can orchestrate the endless details and moving parts into a successful go-live. These are the new rules of ERP implementation success.

Solving the ERP Implementation Mystery

NEW RULE:
Even the biggest ERP implementation mysteries can be solved.

ERP Implementation Mystery

When a company is considering a software update, they may decide to end the process before they have even begun. While the problems and mysteries of an ERP project may seem indecipherable, we have identified the most reliable and effective steps for ERP implementation success.

In this guide, you’ll find:

  • Every phase of an ERP implementation plan
  • How to set realistic goals for your project
  • What ERP implementation pitfalls can arise
  • How to overcome an ERP system failure

This guide will provide the answers — but first, we will examine some of the most common mysteries of ERP implementation.

1. Not Knowing the Process

The first major mystery of an ERP implementation is not having accurate data on where to begin and how to manage the process. But by following our guide, you can understand every step in an ERP implementation project and know exactly what to do and when. Having just a little bit of knowledge can make a large project less daunting.

2. Not Knowing the Time It Will Take

Time is a crucial factor when planning for an ERP project. How much time will it take to train employees on the new system and processes? How long from step one until deployment? Inaccurately estimating the amount of time of a particular step in the process can cause a ripple effect until you are going over budget or not going live on time. Creating an ERP implementation plan will help you understand what steps are needed and how much time is required for each one.

3. Not Knowing How to Work with Vendors

Finding the right software and implementation partner is only half the battle, you also need to understand how to work with your vendor. Most important is communication. Never assume that a vendor knows every feature you need just because you have given them an overall view of the departments that will be using the new products. Also, it is vital that you find out from the very beginning of a project which parts of the implementation process will be handled by your vendor and which ones will be handled by your team. Many implementation failures stem from assuming that a vendor is going to handle more of the process than they actually do.

4. Not Knowing the Realities

Once you have a product and vendor selected, and have written a thorough implementation plan, it is easy to think that everything will run smoothly from that point. But to have a successful go-live, it’s important to set realistic expectations for your team and for your implementation partner. Remember that nearly every part of an ERP project can go beyond an initial estimate, including the budget and timeframes of each phase. Thinking realistically and planning for contingencies will help keep a project from getting into trouble.

Following our guide will help you to solve the ERP implementation mystery and alleviate any fears you have about the process. In it, you will learn what the key components are for an implementation, which will enable you to look realistically at your company’s time and resources for the project. You may then decide to take on the project yourself, or that it is more practical to get help.

How to Overcome Common ERP Implementation Fears

NEW RULE: ERP project fears don’t lead to failure when you face them — and communicate.

ERP Implementation Fears

Launching into a new ERP implementation project can be frightening — and, as it turns out, this kind of stress and anxiety is completely normal for such an enormous undertaking.

Thankfully, we have learned from working with our clients that ERP fears don’t lead to failure when you face them and communicate about them.

While we outline some of the more common fears, and how to overcome them, it is important to communicate your specific concerns to the implementation partner. We also recommend working with experienced ERP implementation consultants who can help navigate the chaos and take some of the terror out of the process.

FEAR: Nothing Changes

One of the biggest fears people have about an implementation project is that absolutely nothing will change. You could go through months of work, spend hundreds of man-hours and your entire budget, only to end up with so many problems that you never go live. Then you are stuck with the exact same software you have now, which already had issues, or you wouldn’t have needed the implementation in the first place.

How to Overcome it: Make certain that you know as much as possible before you start a major software update. Understanding ERP implementation phases will help you know what every step is and how to ensure that each one is completed. If you have the correct plan and stick to it, your chances of a successful go-live are much greater.

FEAR: Going Over-Budget

Imagine that you pick the right software and go through all the steps of creating an ERP implementation plan. But after all is said and done, your budget ends up being 50% higher than anticipated. At some point you will need to go to senior management and present all the reasons why more funds are needed. Sadly, this fear is all too real and such a situation could even lose someone their job.

How to Overcome it: Take a close look at your plan and all the time and resources involved. Communicate a lot with your implementation partner so that they know each department that will be using the new software, and every possible feature needed. Also, be sure to build a hefty contingency of around 25% into your budget, to cover any potential surprises.

FEAR: Too Risky

Ask any CFO about doing an ERP implementation and they’re bound to say that it’s much too risky. Truthfully, they wouldn’t be incorrect in that assumption. ERP projects are big operations that take a lot of time, money, company resources; and there’s more than a small chance that it could end up in a failure to go live.

How to Overcome It: Compare the risks of an ERP implementation to not updating your software at all. Could your current software keep up if your company were to acquire significantly more business than you have now? If you suddenly got a spike in sales but lost valuable financial data or had massive shipping delays due to antiquated software, how much danger would your business be in then? While an ERP implementation may be a scary proposition, sometimes not making a change at all can be even scarier.

Identifying ERP Implementation Challenges

NEW RULE: ERP implementation challenges get anticipated and eliminated with proper planning.

ERP Implementation Challenges

Experience has taught us to anticipate ERP implementation challenges — in fact, planning for how you deal with the unexpected may be more important than the challenges themselves. ERP project teams should be prepared to deal with issues to mitigate damage or delays.

As ERP implementation consultants, we have seen it all, so we prep our clients ahead of time on what to anticipate. Below is a small sample of some real-life challenges we’ve been asked to help with.

Your company is eager to select new software, but company data remains untouched

Data cleansing, testing and validation is a big deal. Good data is central to any successful migration. In general, this process should begin at least six months prior to implementation and longer for multinational or complex companies. Your new system will choke without good data.

Surprise, you just got assigned to lead an ERP project

Anticipate mind-numbing complexity. Seek outside education where possible. Get to know what governance structure is in place. Secure internal alliances and outside advice. Buckle up for what could be a bumpy ride.

You start getting solicitation calls from software vendors

Software selection should be preceded by a well-thought-out IT or Information Strategy. Without one most software sounds good, but how do you know you’re making the right choice? A common misstep is targeting software to automate what your company does now. You don’t necessarily want to replicate current processes but improve them or in some cases even eliminate them.

P.S. Don’t be lured by “limited time” software discounts.

Your budget and deadlines have been predetermined

Budgeting for and timing of a successful go-live is both an art and a science. You are dealing with multiple variables like executive alignment, operational preparedness and people readiness. Perhaps unlike other company initiatives this one needs some flexibility to get it right and to manage deployment choices.

A tested set of phases governs most well-executed implementations. The good news: with ERP projects come different approaches. For example, you may decide not to install all software modules all at once, instead preferring to stage them, managed with an Agile approach. From handling surprises to efficiently helping measure cost and scope, including an independent ERP advisor as a partner will help you identify ERP implementation pitfalls and get you closer to your goals.

 

The Difference Between ERP Success and Failure

RULE: Project success must be defined by key stakeholders, and realistic expectations must be set.
ERP Success And Failure

Sometimes the difference between ERP success and failure is not always what we think it will be. Truthfully, no one can define a successful project other than those people who know what is needed and wanted from the new applications.

While of course ERP implementation best practices should be followed, the difference between the success and failure of an implementation project is a very, very gray area. Though it would be easier if someone could give you a list of exact items you will need for your project, there are no blanket criteria that will define whether or not a project is a success.

What is ERP Implementation Success?

The best way to define ERP implementation success is to determine the following:

  • Did you set the right expectations for the ERP project?
  • And did you meet those expectations?

But setting expectations isn’t just about knowing what questions to ask — it’s also about knowing WHO to ask. Before starting an ERP implementation, find out what the success criteria would be from anyone in your organization that will be affected by the implementation, including:

  • Subject Matter Experts
  • Board of Directors
  • Owners and Shareholders
  • ERP Project Management Team
  • End Users

At the beginning of the project, speak to all of the above stakeholders and anyone else who will use the new system or be a part of its implementation. Find the people that really matter, the key opinion leaders, and once you have their criteria, build those expectations into the project meeting.

Your ultimate goal is to arrive at the end of the project and be able to list out every expectation and show how it was delivered. Only then will you be able to declare if your project was a success or a failure.

Three Areas of ERP Project Expectations

1. Functionality

When doing an ERP update, functionality is going to be one of the top expectations on most people’s minds. Find out what problems need to be resolved, what pain points your company has, and which departments will use the new software. Confirm with your implementation partner that the requests can be met and then put those expectations down as the items that need to be accomplished to have a successful go-live.

2. Money

Not everyone is going to have the budget high on their expectations list. For instance, the end users may not care how much the new software costs to purchase and install, they just want it to work. But the higher you go within the organization, the more important money becomes. Be sure you know all the functionality requirements, and get a clear picture of the budget from your implementation partner. Then you can manage those expectations and monitor expenditures throughout the project.

3. Time

Time may not be important to everyone, but it is a valuable piece of information for ERP implementation success. One part of the plan may call for the sales system to be down overnight for updates. But if that timeline increases to 24 hours instead of overnight, the effect may be felt across the entire organization. And if the schedule goes 30 days past its expected go-live, it may cause a ripple effect throughout your organization. Ensure you have all information and have gone through every contingency to set the time expectations appropriately.

Adjusting Expectations

No matter how many people you meet with and how many expectations you have going into a project, it is inevitable that something will need to be changed. Rather than hiding from these realities, it’s important to take responsibility for them and to communicate to everyone who needs to know. This is vital for achieving ERP implementation success.

Also be sure that you can clearly communicate the reasons why the change has occurred. Find out the exact reasons for the change from your implementation partner, and be relentless about getting that information. If the partner is letting you know that the timeline or budget has to be increased, or a functionality is going to be lost — and they can’t tell you why — then something is very, very wrong. Be willing to order a stop on all work until they give you those answers.

Once you have the reasons, you can go to the board of directors with confidence to request an adjustment in expectations. As an example, if you can tell them that a specific application is going to require additional hours of programming due to testing failures, and you need to push the timeline out an additional 30 days, this shouldn’t be an issue. An organization is usually made up of bright, sharp people who should take that information and agree that such an extension is necessary.

Milestones Help Guarantee Successful ERP Implementation

Setting expectations and, if necessary, adjusting expectations is only part of a successful ERP project. Once you have the expectations, use them to create a timeline and list of milestones that must be completed. One large task on the ERP plan will usually take many smaller steps to accomplish. Consider these sub-products of the bigger project and manage each of these milestones ferociously. A project can go off track by missing just one seemingly insignificant step. But if you have correct expectations, set correct milestones, and meet each one, you are practically guaranteed a successful implementation.

The Role of User Participation in an ERP Success or Failure

One final and vital component in a successful ERP implementation is user participation. If your project comes in on time and on budget, but no one uses the applications, it was still a failure. You need to ensure that users are not only involved in the beginning when setting expectations, but that they continue to do their part throughout the project. Ensure that users are training on the new software and testing it relentlessly. The end users will provide the crucial feedback needed to verify if a system is working or not. Don’t get to the end of a project and realize that you should have asked the users earlier if they were having any issues or needed anything more to do their jobs.

Though no one can decide for you and your company what the difference is between ERP success and failure, the above guidelines can help you find that information for yourself. Follow these steps to make sure your project goes live successfully.

How to Recover from an ERP Implementation Failure

NEW RULE: Disasters are temporary and failures can be fixed.

Executive mad about ERP Implementation Failure

If your company has put resources into new software, only to have the project go off the rails, you know how important it is to recover from an ERP implementation failure.

What is an ERP implementation failure?

First, let’s understand what an ERP implementation failure is. Simply put, it’s a project that doesn’t go live with what management and the owners expected. If a project never goes live, or if it goes live years later and far over budget, it can be considered a failure.

What happened? How did it go wrong? What do we need to do to get the plan back on track? Why do ERP implementations fail?

These are the questions you may be asking, and the simplest answer is that there are four key areas that you need to assess to discover what occurred and how to fix it:

  • Functionality
  • Data
  • Integrations
  • Infrastructure

Let’s take up the first of these, functionality. After an ERP implementation project has failed, you may be tempted to look at the plan and assume that all previous steps have been completed. One of the first steps of the project would be looking at functionality, knowing what areas of the organization are going to utilize the software. But it’s vital to start with fresh eyes and take a new look, especially if the project has been ongoing for a while. Is it possible that the functionality has changed? This is important data to have before attempting to correct an expensive ERP project disaster.

Next is data, which means assessing all the various pieces of information that will be used in the new ERP software. Is the data complete, is it currently organized, is it known what data is going to be used in the new system? This must be done before putting an ERP implementation project back on track. If the data is not organized going into the ERP software, it will be that much harder to implement.

As for integrations, you need to ask: What systems and departments will need to communicate with and pass data to the ERP? Again, if a project has been stalled for an extended period of time these requirements may have changed. Or it is possible that the information wasn’t collected properly the first time. In order to recover from an ERP implementation failure, you will need to know what integrations are still needed.

Finally, the infrastructure needed for an ERP execution plan can be easily overlooked. While the team is working to ensure everything functions and the end users understand the new software, something can be missed. Look at what will be needed to implement the new software. Will the shipping department need iPads to run the inventory tracking part of the system? Are new printers needed for the accounting department to print the updated invoices?

Is it possible to recover from an ERP project gone wrong?

While it may seem complicated, the good news is that it is entirely possible to recover from an ERP execution failure. Look at the areas above and see where they are in the sense a normal software development process of analysis, design, build, test, change management, training, documentation, cutover prep and go-live.

If the team assumes that they are close to the training step, but vital information is still needed to determine functionality, you may have to go back to analysis. None of the steps can be skipped, but if every single one is done fully to completion, you can avoid an ERP implementation failure.

The key is to find the underlying problem that caused the failure and fix that. Don’t be afraid to ask the hard questions and be willing to do whatever it takes to resolve the issue. Assess the information above and you may find one simple issue. Sometimes finding the problem can be the hard part and fixing it can be the easier step.

How to avoid an ERP implementation failure

Now that you understand how to recover from an ERP project that has stalled, what can you do to avoid ERP implementation failure in the first place?

The biggest causes of ERP implementation failure:

  1. Not having an experienced team

If the team is going into a project saying “if everything goes perfect, we’re going to make it” the project is not going to work. Something is always going to go wrong, and the team needs to be prepared for that.

  1. Not separating the project from your business

In order to ensure a successful ERP implementation, you need to have a structure for that team that’s different from the day-to-day business. You also need a great executive leading the team who can make decisions quickly, as waiting a long time for each decision will cause a project to stretch out and fail.

  1. Not writing things down

Writing things down is vital if you want to avoid an ERP implementation disaster. You need a written plan so that you can focus on each step one at a time and ensure each one is completed. If you can do that, you can be successful.

Whether you’re trying to recover from a plan that went awry or avoid an ERP implementation failure in the first place, perhaps the most important thing to remember is: Communicate, communicate, communicate. If all members of the team, from all sides of the project, communicate and resolve each issue as they arrive, you should soon see your new ERP software successfully in use.

Let’s Get Started

Contact us today to start the conversation.