Enterprise Resource Planning implementation can be a daunting task, often taking a number of months to complete and costing more than the price of the software and hardware involved. But if you are prepared, and the proper resources are applied to the job, ERP system implementation can be completed on time, within budget, and delivering excellent return on investment (ROI).
ERP system implementation, sometimes called MRP implementation after one of the core ERP modules and the “old” name for this kind of software, is essential to earning the improvements and benefits the company anticipates when deciding to spend the money for a new system. The ERP system and software are tools, not unlike a milling machine or a plasma cutter—they will not run effectively and deliver the benefits if not properly installed and set-up and run by trained, motivated operators (users).
ERP touches nearly every aspect of the business and therefore the implementation process should be a team effort with participation from all departments—materials, production, customer service, engineering, accounting, administration, and more. It is best if all interested parties participate in the system selection as well—so that they have involvement and “ownership” in the system right from the beginning.
Another key part of the implementation effort is to have support and commitment from the very top—one or more executive sponsors who will keep the system project at a high priority and help resolve conflicts over resource availability and interdepartmental differences.
The third key element of ERP implementation success is user training and education. People inherently fear the unknown and the best way to overcome any reluctance to embracing the new system is removing the “unknown” element from the equation. In addition, the system will undoubtedly embody new and different ways of doing things and additional sources of information that users will not be able to fully exploit if they are not trained to do so. And don’t install a new system and then force it (modify it) to look and act like your old system—if you keep doing things the same way you always have, you will continue to get the same results. And that won’t be much of a return on your investment.
Smart companies will try to avoid modifying a packaged ERP system. Modifications are costly and delay the time-to-benefit for the system. Modifications severely complicate support, maintenance and upgrades to the system, and may compromise the system’s function and integrity. A packaged ERP system is considered to be a “good fit” if it handles 80% or more of the company’s needs right out-of-the-box. The remaining 20% should be resolved through procedural changes (maybe you shouldn’t be doing it that way or doing it at all), work-arounds, or add-on software from a reputable supplier.
ERP system implementation can be a difficult transition for a company but properly planned, adequately supported and managed, and implemented by a motivated cross-functional team with senior management support, the new system can supply the tools and the industry-proven best practices that will take your company to the next level of performance, longevity and profit.