ERP Selection & Implementation Guide

Business has become more competitive and value driven than ever. To improve their deliveries and performance more and more organizations are going digital and adopting ERP. And with the increase in number of ERP implementation, number of failures has also increased. ERP selection & implementation has a key role in successful ERP implementation.

Here is our guide for ERP selection and implementation.

1.   What is ERP?
2.   How ERP is helping midsize organizations around the globe?
3.   8 Signs it’s time to invest in ERP for your business.
4.   ERP selection steps.
5.   How to estimate ERP implementation cost?
6.   The Key Factors for successful ERP implementation.
7.   How to check if you are ready for ERP?
8.   ERP Implementation Methodology.
9.   ERP Post Implementation Audit.
10. Beyond ERP: The Road Ahead

  • CRM
  • EAM
  • ERP2.0
  • Mobility
  • Business Analytics
  • Big Data

1.   What is ERP?

ERP is a shared database that supports multiple functions used by different business units hence reducing duplication and streamlining business processes

2.   How ERP is helping midsize organizations around the globe?

  • ERP can help in giving a competitive edge to your organization by:
    Providing collaboration that helps in making your company more productive
    Give real time visibility that allows decision makers to adjust when needed
    Integrating business intelligence hence getting more insights from ERP data
    ERP can help you to realize benefits faster when you utilize services

How ERP is helping midsize organizations around the globe

  • Organization that have implemented ERP are seeing:
    15% less operational cost
    13% less administration cost
    17% more internal schedule compliance
    18% faster cycle times from services to invoicing
    33% improvement in inventory returns
  • Best in the class organization with developed IT infrastructure enjoys:
    22% growth in operating margins
    32.4 days outstanding sales
    95% completed and on-time delivery

3.   8 Signs it’s time to invest in ERP for your business

  1. Difficult access to information when needed
    Employees don’t get the right information at right time
  2. Lack of collaboration between departments
    Information flow across different departments in your organization in slow
  3. Difficult with accounting
    Because of multiple transactions happening in your business, accounts department find it difficult to keep data
  4. Troubles in meeting schedules
    It’s hard for different teams to get the information they need about the production schedule, leading to delays
  5. Complex software infra
    IT department cannot keep up with multiple business units performing different functions
  6. Lack of access when working remotely
    You are not able to get information about ongoing project on the go
  7. Lack of visibility over inventory
    Your inventory keeps facing troubles like overstocking or under stocking
  8. Lack of customer satisfaction
    Customer unable to get accurate real time information about their order

4.   ERP selection steps

  1. Assess your business process
    Find out what your business needs by accessing your business processes and determine where your business is lacking.
  2. Develop selection criteria
    Determine a selection criteria based on features, usability, support, post implementation training and ERP vendor’s experience.

ERP selection steps

  1. Get matches
    Evaluate vendors based on selection criteria and make a list of vendors shortlisted.
  2. Schedule demo
    Get a real time experience of the shortlisted ERP’s.
  3. Compare proposals
    See which among the shortlisted vendors’ best suits you and promises good ROI.
  4. Check references
    See if shortlisted vendors are willing to provide references.
  5. Make a decision
    Check the vendors you’ve shortlisted from the above steps and determine which one is best for you.

5.   How to estimate ERP implementation cost?

  1. Software License Fees
    Find the actual cost of licenseHow to estimate ERP implementation cost
  2. Hardware and Third party software
    Your Company may need to purchase a new server, upgraded workstations or SQL server licenses to run your new ERP software.
  3. Implementation Services
    Find out what is included in the implementation services and will it cost extra
  4. Number of users
    Number of people who will use the ERP may also affect the cost
  5. Customization needed
    Find out if the software can be implemented readily or will it require customization
  6. Training and services cost
    Find out if there is any extra cost for training & services post implementation
  7. Maintenance Fees
    Typically you need to add certain percentage to the software list price for the required yearly maintenance fee.

6.  The Key Factors for successful ERP implementation

  1. Active Participation
    People in the organization have to make the project their priority
  2. Proper Planning
    Form a plan with minimum assumptions and accurate data
  3. Clear Business Objective
    Make clear your definition of success or end point becomes a moving target
  4. Sufficient Resources
    A correct estimation of resources required is necessaryThe Key Factors for Successful ERP implementation
  5. Realistic Expectation
    Setup realistic expectation and don’t expect ERP to perform miracles
  6. Minimize Customization
    Lack of standard business practices can lead to over customization which can lead to implementation failure.
  7. Proper Testing
    Before going live perform proper testing of the ERP to see if the system meets your business needs.
  8. Training of Employees
    Employees should be trained to know the ERP basics, overview of system and its working.
  9. Post Implementation services
    ERP requires frequent reviews and corrections for the ever changing market
  10. Management of Transition phase
    This transition phase have to be handled properly as there can be a temporary dip in performance after ERP implementation.

7. How to check if you are ready for ERP?

  1. Final Goal
    Identify final goal
    See if the key stakeholders understand the goal
  2. Scope of the Project
    Identify modules required
    Data conversion scope
    Determine interface scope
    Identify workflow scope
  3. Identifying Roles
    Identify project team
    Define roles of the team
  4. Technology Required
    Assess current hardware
    ERP system requirement
    Hardware availability and procurement
    Role of hardware setup

  1. Implementation Approach
    Project skills assessment
    Staff availability assessment
    Identify blackout dates
    Clearly define tasks
  2. Training
    Identify training resources
    Identify training participants
    Plan for Training Material Development
  3. Support
    Review Current Support Structure
    Discuss Post-Live Governance Model
  4. Facility Requirements
    Identify and Ready Workstations
    Identify Alternate Meeting Locations
  5. Payment Schedule
    Identify Any Cash Flow Limitations
    Identify Any Budget Challenges
  6. Project Communications
    Steps Taken to Communicate between project team
    Determine if key executive understand Project Goals and Upcoming Changes
    If regular communication is established to inform about project status
    If staff understand their role in the project

8. ERP Implementation Methodology

ERP implementation project kickoff and team forming

  1. Identification of project objective
    Appointment of project coordinator and key user identification
    Project kickoff meeting with steering committee
    Auditing of infrastructure
  2. Requirement gathering and submission of proposal
    Identification of department level objective
    Identification of key pain areas
    Assertion of performance and acceptance criteria
    Design submission & determination of checkpoints

  1. Business Process Reengineering (BPR)
    Analysis and redesigning workflows
    Optimize end-to-end processes
    Automate non-value adding tasks
  2. Project Customization
    Gap analysis preparation
    Size and effort estimation for customization
    Customization of product
  3. Training and Knowledge transfer
    Area identification for knowledge transfer
    Live workshop by functional experts
    Detailed training, schedule preparation and finalization of go-live date
    Execution of training program per schedule
  4. Reviews and FeedbacksERP Implementation Methodology
    Frequent review meeting
    Progress sheet preparation
    Evaluation of implementation process
    Feedbacks on current status of the project to the management
  5. Project Acceptance
    User feedback gathering on specific KPAs
    Approval from key users and HOD
    Acceptance certification from management
  6. Post implementation
    Keeping tabs on how ERP is working
    Periodic maintenance
    Training employees

9. ERP Post Implementation Audit

  1. Overall Scope and Planning
    Review how closely the project results the objective
    Evaluate system suitability with organization’s business requirements
    Review the expected deliverables and their quality

ERP Post Implementation Audit

  1. Driving Principles
    Understand the organization’s process efficiencies improvements
    Evaluate if the necessary controls & systems are in place
  2. Cost & Benefits
    Compare actual costs to budgeted cost
    Compare actual benefits to expected benefits
    Evaluate ROI
    Compare actual savings to expected savings
  3. User Level Satisfaction
    Evaluate overall user satisfaction and understanding of the system
    Meet End user requirement
    Project sponsor satisfaction
  4. Learning Evaluation
    Review user learning and institute corrective mechanism
    Define the training plan of the new system
    Evaluate knowledge transfer among implementation team
  5. Improvement Areas
    Evaluate if the benefits are achieved
    Identify openings on if the business processes can be made more efficient
    Review if anymore changes can be made to improve the system further
  6. Lessons learnt
    How well the project’s deliverables, costs & benefits accessed
    Identify what went well & needs to be learned from
    Identify what went wrong & how to avoid it in the future

10. Beyond ERP: The Road Ahead

  • CRM
    Assign, qualify and convert leads
    Form a database
    Develop knowledge base and conduct trainings
    Deliver products and produce invoices
    Improve after sales support
  • Enterprise Asset managementBeyond ERP: The Road Ahead
    Maximize asset performance
    Keep plant, equipment and facilities reliable & safe
    Reduce maintenance and operational cost
    Improve efficiency of operational aspects
  • ERP2.0
    Improve functionality of SCM, SRM & CRM
    Collaborate with entities outside organization
    Access information outside company
  • Mobility 
    Track progress of project on the go
    Reach ground employees from HQ
    Basic HR activity by employees themselves
    Data needed can be accessed anytime, anywhere
  • Big Data
    Collection of structured and unstructured data
    Determine root causes of failures, issues and defects in real time.
    Recalculate entire risk portfolios in minutes.
    Detect fraudulent behavior before it affects organization.
  • Business Analytics
    Explore data to find new patterns and relationships
    Explain why certain results occur by statistical and quantitative analysis
    Test decision using different testing’s
    forecast future results by predictive modeling and analytics

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