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ERP Implementation Best Practices Best Practices in ERP Software Implementation

 

Bridge the People Pit

As is the case with the implementation of any business software application, change management is a crucial part of success. Indeed, people and process changes have a much more significant impact on the success of the project than the technology changes do.

In terms of ERP implementation, you should begin the process with open communications, continue such throughout the project and then end the project with same. Simply put: communicate, communicate, communicate. There's little to no risk of over-communicating.

This, too, calls for a plan. A common error is to think ‘we’ll tell them about this phase of implementation when it’s done.’ Organizations with the highest success rates begin by communicating with employees prior to ERP software implementation. Make a list of questions to keep the conversation meaningful and useful. Discuss things like why the organization is implementing an ERP application; what the hopes, fears and goals are; and, what contributions are expected by each department and individual.

Keep affected and interested parties routinely updated on progress. Then hold a 'tweaking' session after software implementation to make sure the business system is performing at peak expectations.

Do not underestimate or overlook unintentional consequences to the changes ERP software brings. "ERP and organizational morale is most fascinating," says John Vaughan, director of industry solutions at Patni Americas’ Business Consulting Services group. "The psychological damage of a multi-year ERP journey is often underestimated by organizations."

"The process change is often dramatic, and the loss of budgets and organizations to the ERP effort creates classes of winners and losers – true believers and separatists," explains Vaughan. "Without a plan to bring everyone into the tent, an organization could self destruct, and the benefits from the ERP software could languish or never be realized."

Manage Expectations

First, align your own expectations. ERP implementation cycles generally take six to eight months. Break the software implementation down into phases and assign definite time periods to each phase as this maintains a sense of urgency throughout the project. Without that sense of urgency, you and your team may be lulled into believing you have more time than you do and the project will end up taking far longer and costing far more.

Quick wins are possible but they are usually few and far between. Look for them and cash in on the quick wins where you find them. However, you must make it clear to management and users that this will not be the norm and that the bigger returns are usually found in the longer implementation cycles. In other words, it is generally better to keep expectations low and over-perform than it is to let expectations skyrocket and deliver something less stellar.

Typically, core business processes are addressed first. This means ‘more interesting’ projects may be delayed in the ERP implementation process and thus dampen some enthusiasm. Be sure to communicate the advantages and benefits of every stage of the implementation in order to maintain support for the project.

On the flip side is the need to manage expectations in regards to project costs. It is important to remember that the investment and returns are ongoing. Prepare for costs (and monitor expenses) throughout the project. A continuous monitoring effort will keep your expectations in line with the realities.

The cost of the software should not be confused with the project cost which is often referred to as the ‘total cost of ownership’ or TCO. There will be initial and ongoing investments in a variety of areas from training to IT and management man-hours. If you have not adequately budgeted for the total cost, obviously, there is the potential for conflict further down the road over the perception of rising costs. It is better to adequately plan for these expenses and manage cost expectations accordingly.

Return on investment (ROI) expectations can run unrealistically high if not managed properly from the outset. It is a good idea to explain that the processes with the highest return normally take the longest time to implement. While some short-term advantages can be gained, ERP software deployment should not be evaluated based on such as ROI will be continuing over time and with each phase of implementation.

Cue Change Management

Equally important is well-defined change management to assist with employee adoption and the organization’s return on investment.

"There is a renewed interest in change management – but this time the approach is different," says Erin Golding of Accenture's Business Consulting Services group. "Most companies have established an ERP CoE (Center of Excellence). This helps understand why ERP projects fail, and learn from this unfortunate history in order to proactively apply mitigating measures."

Creating a CoE is an increasingly common organizational strategy incorporated in ERP implementations and often led by business units. It is designed in part to keep ERP priorities both relevant and on the front burner. Essentially, the business unit leaders are charged with continuously driving and optimizing ERP and conducting the change management. This strategy, therefore, does not end on the ERP ‘go live’ date. Many ERP software suppliers include a dashboard that centralizes management for CoE objectives.

Project and performance monitoring tools are essential. Traditional tools are sometimes augmented by End-User Experience monitoring, which is an emerging tool that can be helpful in determining where the system is off-putting to users and in rectifying the problem(s) to ensure better usage rates. It identifies performance from the user’s perspective and can be particularly helpful in monitoring response times in a cloud, Software as a Service (SaaS), or virtualized environment. End-user experience monitoring tools can work passively from the user’s desktop or on the back-end. Traditional and emerging tools of this sort can help you reconcile user complaints with actual system troubles and even to disregard time-hogging false alarms.

However you decide to organize your change management, make sure it is in sync with your implementation goals and does not overwhelm or intimidate users in the process.

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Applying a Center of Excellence approach helps understand why ERP projects fail, and learn from this unfortunate history in order to proactively apply mitigating measures.

 

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