Enterprise Resource Planning (ERP) systems have been a critical tool for a company’s continued success. ERP systems provide measurable data that tracks performance, product lifecycle and financial power. This technology has changed the status quo by allowing executives and managers to forecast and react to real-time information.
If your company is contemplating a new ERP platform consider the following beforehand:
- Partner with the right software vendor
- Project management structure
- Project plan
Partner with the right software vendor
Selecting a software vendor is similar to hiring a Chief Operating Officer (COO) since the system will be planning and directing all aspects of the company’s operations. The vendor must prove themselves as an industry leader, pass a series of written and verbal interviews, present their strengths and weaknesses during an onsite demonstration and negotiate an affordable price. Evaluating the system on technical requirements, functional capabilities, pricing and vendor viability is essential.
Project management structure
Assigning a dedicated team is important to the success of the project along with maintaining sight of the triple constraints; scope, time and cost. This begins with identifying the steering committee, selecting a strong project manager and departmental champions. Steering committee’s role and responsibility is to maintain the project’s vision and goal. The project manager is responsible for ensuring the triple constraints are maintained. In addition, the project manager must understand the vision, prioritize daily / weekly tasks and maintain effective communication across multiple groups. Departmental champions are identified as key stakeholders that ensure the business process requirements translate into the new system. The champions are critical resources during training and supporting new policy and procedures defined by the company and integrated with the ERP system.
Developing a successful project plan is a fundamental responsibility of the project manager. The project plan must be aligned with the vendor’s strategy and guide the implementation lifecycle through ‘Go Live’. Selecting a project plan framework with a successful track record will streamline the development process. A five-phased approach that has proven successful includes; initiate, plan, execute, monitor & control, close. Each phase of the methodology incorporates a number of sub processes to ensure the project stays on track. For example, during the planning phase, identifying “critical path” activities, meeting schedules, work breakdown structure, communication and resource planning should be considered.
Before moving from a legacy system to a new ERP platform, understanding your master data is important. This includes general ledger, accounts payable, receivable, customer, employee, inventory scheduling etc. Documenting data conversion requirements must begin during the planning phase and tested throughout the project’s lifecycle. Failing to prepare data can create issues to the projects constraints; scope, time and cost.
The success of your ERP system implementation starts with selecting the right vendor, creating a strong project team, developing & executing a realistic project plan and understanding your company’s master data. ERP systems are designed to support your organization’s growth, provide real time information and help underscore strategic opportunities.