ERP implementation guide

There is no universal ERP implementation approach suitable for every organization. Various ERP vendors, implementation partners, and organizations rely on different setups.

Notwithstanding this, most ERP project implementations follow a handful of broad identifiable phases.

Being familiar with these ERP implementation stages allows each project member to recognize how their specific tasks fit into the bigger picture.

Phase 1: Preparation and initiation
The first phase establishes the foundation for the ERP project.

Typical activities include:

• Defining business objectives

• Establishing project scope

• Identifying stakeholders

• Assessing organizational readiness

• Establishing governance

• Selecting the ERP solution and implementation approach

• Identifying project risks

• Defining initial success criteria

Aligning the business with IT perspectives and goals during this stage is particularly crucial.

Top-Management support and effective communication are important factors for successful implementation of an ERP system. A UK-based study with 296 medium-sized and large companies found that initial planning, top-management support, and explicit communication have a high impact on ERP systems implementation success.

The lesson is straightforward:

Establish the foundation of your project before you have the first problem in the implementation.

Phase 2: Planning
The planning phase translates the implementation objectives into an actionable ERP implementation plan.

This can include:

• Project schedules

• Workstream setups

• Resource planning

• Governance structures

• Decision-making processes

• Risk and issue management

• Communication planning

• Testing strategy

• Data migration planning

• Training planning

• Cutover planning

An additional important feature of a good ERP implementation project plan is that it displays dependencies.

For example: data migration, integration, configuration, and testing may not always be independently planned.

An ERP project team should, because of this, be able to see the individual workstreams and how they interact.

Phase 3: Design and execution
During execution, the organization begins translating business requirements into the future solution.

Activities can include:

• Business-process analysis

• Process redesign

• ERP configuration

• Custom development

• Integration development

• Data preparation

• Security and role design

• Documentation

• Initial testing

That is also where the distinction between implementation and development becomes relevant. An ERP implementation is not an application development project. The aim is to deliver an operational business solution that people can employ, support, and sustain in the long run.

Another prominent area that many studies highlight is the critical success factors, which show the prominence of business-process re-engineering, ERP team composition, project management and clear communication, and the compatibility between the ERP system and business processes.

Phase 4: Testing
Testing is one of the most important control points in an ERP implementation; however, technical testing alone cannot guarantee proper functioning.

Test the entire business process with all relevant people groups. Use realistic data, integrations, and systems that will be used in production.

Examples include:

• Unit testing

• Integration testing

• System testing

• End-to-end business-process testing

• User acceptance testing

• Data migration testing

• Performance testing

• Security testing

Involve the users when the task needs their experience.

Based on this, testing can serve multiple purposes: It highlights software defects, wrongly configured workflows, and helps people adapt to new ways of working.

In many cases, lack of testing has been cited as a risk in ERP implementation. Undiscovered issues quickly rise to the surface and show their disruptive consequences once the system is operational.

Phase 5: Training and go-live preparation
People need to be able to work with the ERP system to generate value. Training should not be classified as a final administrative step just before go-live.

The trainings should be delivered at the right time and level. Seasoned with practical and simulation-based exercises, the training will be even more effective.

Research literature has consistently recognized training and education as key factors for successful ERP implementation.

As part of the go-live preparation, several aspects need to be considered:

• Setup of different user roles

• AS-IS and TO-BE business processes

• Review of new responsibilities

• Issue and incident management processes

• Established support structures

• Escalation procedures

Phase 6: Go-live
The go-live moment marks the transition from the current way of working to the new ERP system. Depending on the organization’s strategy, the implementation may use:

• A big-bang approach

• A phased rollout

• A geographical rollout

• A business-unit rollout

• A process-based rollout

Go-live moment covers more than the technical cutover: the business itself needs to change the processes.

Just because a go-live is technically successful, it does not mean it won’t become an operational issue if people do not know how to use the system or cannot get the support they need to use it effectively.

Phase 7: Post-implementation and continuous improvement
Go-live is undoubtedly a highly significant project milestone; however, it is not the finish line.

Once the new ERP is implemented, organizations will then be required to assess if the system and processes deliver the desired results.

Useful measures can include:

• User adoption

• Process and system performance

• Error rates and issue-resolution times

• Data quality

• User feedback

• Business benefits

• Return on investment

Post-implementation reviews can also reveal lessons that should be applied to future software implementation projects.