Implementing An ERP-Part 1: Prerequisites For Implementing An ERP System

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ERP Implementation

The implementation of an ERP is a big decision for you. And, if your decision is on account of the assured growth in terms of both the value and volume, then ERP systems can bring some great advantages to you in the long run. But, implementing an ERP is more of a scary word, probably, because of the time and cost involved in it. More than that, it’s the negative publicity and the lack of information related to the subject that lets the fear creep in. Factually, an independent research by Panorama Consulting claims that of all the implementations done till the year 2015, 58% have been successful and only 21% have failed; the other 21% were still in evaluation mode.

Wondering what makes an ERP Implementation successful? This two post blog series is designed to help you with the pre-requisites, challenges and resolution that can be used as handy tips while implementing an ERP and be assured of its success. We begin with some prerequisites for you:

Support from Management

ERP implementation may fail if you do not have adequate support for the upper management of your company. That’s because, ERP implementation is a strategic decision that involves huge costs, time and resources. And, while implementing ERPs, issues, both small and big, can arise, too. Of course, the management does not need to know every single thing, but you must communicate anything that demands a structural, procedural, or managerial change well in to avoid halts, process breaks, delays and issues later.

Not 100% perfect out of the box

Understand that no ERP can map perfectly to your tasks and expectations. There will always be a room for improvement, a difference between how you handle things and how the ERP is designed to handle things. Also, that such gaps will have to be filled with customization.

Note points that help define such gaps. Also, note processes that might help surface the difference in the way the information is handled manually versus the ERP. These differences will help the implementation consultant guide you to the correct customization, if required. This may appear time consuming, but it definitely saves time and money in the long run. Yes, of course it costs too high. Customizations add to your Implementation cost, heavily. However, choosing an industry-specific ERP will radically minimize the need of customizations. Such ERPs are built specifically for your industry, following your industry best practices, standards and compliances. They are tailor-made to meet the niche requirements of your industry and thus satisfy most of your needs and challenges. Choosing such an ERP will always be a sensible choice as they are fast to implement and comparatively light on your pocket.

Mobility is Important

Today, everybody handles most tasks using mobiles, tabs, iPads, handheld devices, etc. Your upper management can even generate high-level reports and dashboards by tapping a few buttons on their phones. So, for a successful ERP implementation, you will need to consider the point about the mobility of the information.

So to say, you will need to consider those ERPs that support displaying information on mobile phones. You will also have to carefully consider those tasks that you wish to handle using mobile devices. In fact, you may even have to revise your existing procedures to fit the mobile into the task structure.

Infrastructure

Infrastructure is strategic to your business, because it will define the way you handle things in your businesses. For example, the use of cloud would mean that you will not require separate hardware and hardware support activities. A good ERP can be implemented as software as a service (SaaS). Points like an on-demand ERP system may be handy, because you will only need to pay a subscription-based amounts to avail the cloud-based ERP services.

It is equally important to note that some ERPs may not offer to support all operations from all departments or modules of your business. And, therefore, you may require additional software and their corresponding licenses to support all the departments in your business. In such cases, costs may increase. A comprehensive ERP solution that covers all business processes can add a lot of value to your organization, while bringing about collaboration and accurate, real-time information.

Mapping Existing Resources

Are you upgrading your ERP? Are you switching from one ERP to another? Do you have legacy databases? Does your data need to be migrated from old databases and tables into newer ones? Does the new ERP or database support legacy files and structure? These are only some of the questions that you might have to answer before you begin deciding on an ERP. Talk to your ERP experts on the topic. Seek their help with respect to the challenges that you might face, while migrating your legacy databases, tables, and documentation.

Perpetual Growth

You can enter the new transaction data into the new ERP system only when the legacy data is migrated into the new ERP system. But, there is a long way to go before that happens. In fact, there is no point in the timeline of your business where you can stop all your operations and begin transferring data from your old systems, processes, structures, and databases into an ERP. You will need to handle everything on an on-going basis. Your business will not stop for implementing ERP.

Moreover, your requirements will change with time. Your company will grow, requiring a change in your ERP. Even the changing business scenarios, coming up with new laws and regulations, evolution of new technologies, etc., will demand a change in your ERP. Having an ERP that is flexible and scalable to your future growth is key.

Remember, an ERP is implemented into the nerve centre of your business. It becomes the single point for the accumulation, retrieval, analysis, and reporting of information from the disparate business operations in your business. Choosing the right ERP, an experienced vendor, involvement of all levels of management, proper co-ordination with ERP consultant and an apt implementation methodology can make the process seamless. No doubt, challenges and problems will still be a part of the game. In the next post, we will talk about the challenges in implementing an ERP system and their respective resolutions. So stay tuned!