6 Stages to Implementing an ERP System

enterprise resource planning
Working on an ERP system
When implemented properly ERP software can not only bring immediate benefits but it can also bring long term benefits. A well thought out implementation will allow the ERP system to be flexible enough to grow and change with the business. Successful implementation of any ERP system requires looking at best practice models as these can help the business bring out the best of the ERP system as well as reducing the cost of implementation and increasing the Return On Investment (ROI). Here are 6 steps which should be considered when implementing an ERP system:

1. Preparation

Before any work is carried out, it is vital that the business prepares itself by answering some key questions and only after these questions have been sufficiently answered can the business move onto the next stage. Here are some examples of questions that would need to be answered before moving onto the second stage:

  • What are the business goals and are these achievable?
  • What business problems may we face during the implementation that we can address now?
  • Which aspects of the implementation will yield the most Return On Investment?
  • What business process can be streamlined in order to reduce costs?

2. Planning

Now that a number of vital key questions have been addressed, the project can now be laid out in more detail. Both the client and vendor should create roles and responsibilities and should assign capable staff to these roles. This will ensure that everyone knows what they need to do. This is where the best practice templates for the specific business needs are agreed upon by both the business and the vendor. Communication is key therefore all relevant members should be invited to participate including those that might not be involved in implementation of the system on a daily basis such as the managers and supervisors. A successful implementation will often make use of a variety of communication channels such as newsletters, posters, internal update meetings and the Intranet.

3. Analysis and Design

Possibly the most crucial stage of an ERP implementation, the analysis phase is sometimes referred to as the heart of the implementation. Knowledge gained within the previous two stages will be used to equip the relevant staff with a detailed understanding on the inner workings of the system as well as how it improves business processes.

The vendor should collaborate with the business to ensure that the best practice model outlined earlier is being followed and if it is not then analysis should be carried out on how or why the business has strayed from the agreed best practice model. Reporting, data mapping and proof of concept will consist of a large portion of this stage.

After the appropriate analysis has been carried out, the business processes should have been confirmed and a detailed proof of concept should now have been finalised.   Every process completed needs to be validated by the business in preparation for the next stage.

4. Construct

Once the fourth stage has been completed, work can now begin on creating and testing the system. A full system run through should be carried out as this not only ensures that the system is operating as expected but it also helps the staff to become acquainted with the new system.   Since this is the last stage before the system is actually deployed, there are a number of other tasks which may need to be completed before moving onto stage 6 such as data migration and staff training.

5. Deployment

System deployment usually takes place over a weekend as there is less chance of disrupting businesses processes. A complete system shutdown is performed and a final check is carried out to confirm that all relevant stocks, accounts etc. have been transferred successfully. Once this has been completed, there is nothing left to do but to deploy the system and go live! The vendor should support the business in the first few weeks as some issues are likely to emerge early on after the implementation of the ERP system. A good vendor will also go as far as conducting a review with the business to ensure that any performance indicators and pre deployment expectations are being met.

6. Continual Analysis

After the system has been deployed, frequent reviews should be carried out during the normal management reviews and should asses the workflow process. The vendor should be able to help by providing metrics for measuring Return On Investment. Knowing the Return On Investment of project from the date it started up until the current date is crucial since it shows the level of success of the project.