An Easy to Understand Guide to ERP Implementation
Considering an ERP implementation? Enterprise resource planning software touches every aspect of an organization, integrating internal and external management information. Choosing cloud computing enterprise resource management software might be the best solution. What do you need to know for a smooth implementation?
Reasons for choosing the cloud
ERP implementations can take three forms: in-house, on-site vendor, or cloud vendor. The in-house solution requires the resources to develop your own custom ERP solution. Very few enterprises have the expertise to even attempt such an effort, even if it best fits your business practices.
Traditionally, enterprise resource management software obtained from a vendor has been installed in-house. However, keeping up with the latest updates and providing hardware to maintain the system are ongoing concerns. Your staff generally has the responsibility for installing and customizing new versions, as well as purchasing and maintaining the necessary hardware.
Outsourcing ERP to the cloud allows easy access the latest version without the capital outlay for equipment or inundating IT staff with upgrades. A cloud ERP implementation frees resources that can be redirected to the core business.
An ERP implementation can be accomplished through one of three strategies, or a combination of two or the three. These strategies are:
- Big bang – The implementation happens in a single instance when all users move to the new system on a predetermined date.
- Phased rollout – The implementation occurs over an extended period of time with users moving onto the new system in a series of steps. This is often accomplished by module, by department, or by geography (different branch offices).
- Parallel Adoption – The implementation runs side-by-side with the existing system while users learn the new system.
Each strategy has advantages and disadvantages. Big bang is quicker but lacks an obvious fail-safe if problems are encountered after the implementation. An initial dip in organizational productivity often accompanies a big bang implementation as users learn the new system. Phased rollout offers more security when difficulties are encountered, but requires more time and resources. Parallel adoption takes the greatest amount of resources. Choosing the right strategy depends on the needs and resources of your organization.
Implementation best practices
Two key ingredients will enable a smooth ERP implementation. First, you need an implementation team consisting of end users, vendor representatives, and IT staff. Involving all stakeholders early in the process will reduce the number of unforeseen complications during and after implementation.
Second, communicate throughout your organization. Getting buy-in from the executive level on down is vital for success. Executives must understand how enterprise resource management software will transform the business, while others in the organization must understand how the ERP implementation will improve their workflow capabilities.