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
- ERP provides:
Real time data across organization
Better company wise visibility
Eliminate redundancies
Analyze and report business data
Supply chain visibility and control
Automation in different sectors - Modules of ERP:
Finance
Material Management
Sales
Production
HR & Payroll
Plant Maintenance
CRM
Business Intelligence
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
- 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
- Difficult access to information when needed
Employees don’t get the right information at right time - Lack of collaboration between departments
Information flow across different departments in your organization in slow
- Difficult with accounting
Because of multiple transactions happening in your business, accounts department find it difficult to keep data - Troubles in meeting schedules
It’s hard for different teams to get the information they need about the production schedule, leading to delays - Complex software infra
IT department cannot keep up with multiple business units performing different functions - Lack of access when working remotely
You are not able to get information about ongoing project on the go - Lack of visibility over inventory
Your inventory keeps facing troubles like overstocking or under stocking - Lack of customer satisfaction
Customer unable to get accurate real time information about their order
4. ERP selection steps
- Assess your business process
Find out what your business needs by accessing your business processes and determine where your business is lacking. - Develop selection criteria
Determine a selection criteria based on features, usability, support, post implementation training and ERP vendor’s experience.
- Get matches
Evaluate vendors based on selection criteria and make a list of vendors shortlisted. - Schedule demo
Get a real time experience of the shortlisted ERP’s. - Compare proposals
See which among the shortlisted vendors’ best suits you and promises good ROI. - Check references
See if shortlisted vendors are willing to provide references. - 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?
- Software License Fees
Find the actual cost of license
- 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. - Implementation Services
Find out what is included in the implementation services and will it cost extra - Number of users
Number of people who will use the ERP may also affect the cost - Customization needed
Find out if the software can be implemented readily or will it require customization - Training and services cost
Find out if there is any extra cost for training & services post implementation - 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
- Active Participation
People in the organization have to make the project their priority - Proper Planning
Form a plan with minimum assumptions and accurate data - Clear Business Objective
Make clear your definition of success or end point becomes a moving target - Sufficient Resources
A correct estimation of resources required is necessary
- Realistic Expectation
Setup realistic expectation and don’t expect ERP to perform miracles - Minimize Customization
Lack of standard business practices can lead to over customization which can lead to implementation failure. - Proper Testing
Before going live perform proper testing of the ERP to see if the system meets your business needs. - Training of Employees
Employees should be trained to know the ERP basics, overview of system and its working. - Post Implementation services
ERP requires frequent reviews and corrections for the ever changing market - 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?
- Final Goal
Identify final goal
See if the key stakeholders understand the goal - Scope of the Project
Identify modules required
Data conversion scope
Determine interface scope
Identify workflow scope - Identifying Roles
Identify project team
Define roles of the team - Technology Required
Assess current hardware
ERP system requirement
Hardware availability and procurement
Role of hardware setup
- Implementation Approach
Project skills assessment
Staff availability assessment
Identify blackout dates
Clearly define tasks - Training
Identify training resources
Identify training participants
Plan for Training Material Development - Support
Review Current Support Structure
Discuss Post-Live Governance Model
- Facility Requirements
Identify and Ready Workstations
Identify Alternate Meeting Locations - Payment Schedule
Identify Any Cash Flow Limitations
Identify Any Budget Challenges - 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
- Identification of project objective
Appointment of project coordinator and key user identification
Project kickoff meeting with steering committee
Auditing of infrastructure - 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
- Business Process Reengineering (BPR)
Analysis and redesigning workflows
Optimize end-to-end processes
Automate non-value adding tasks - Project Customization
Gap analysis preparation
Size and effort estimation for customization
Customization of product
Testing - 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 - Reviews and Feedbacks
Frequent review meeting
Progress sheet preparation
Evaluation of implementation process
Feedbacks on current status of the project to the management - Project Acceptance
User feedback gathering on specific KPAs
Approval from key users and HOD
Acceptance certification from management - Post implementation
Keeping tabs on how ERP is working
Periodic maintenance
Training employees
9. ERP Post Implementation Audit
- 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
- Driving Principles
Understand the organization’s process efficiencies improvements
Evaluate if the necessary controls & systems are in place - Cost & Benefits
Compare actual costs to budgeted cost
Compare actual benefits to expected benefits
Evaluate ROI
Compare actual savings to expected savings - User Level Satisfaction
Evaluate overall user satisfaction and understanding of the system
Meet End user requirement
Project sponsor satisfaction - Learning Evaluation
Review user learning and institute corrective mechanism
Define the training plan of the new system
Evaluate knowledge transfer among implementation team - 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 - 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 management
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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