Implementing an ERP System: How to go this way and not get lost

The philosophy of ERP (Enterprise Resource Planning) is to build a single technological and information environment for managing business processes and resources of the enterprise, regardless of the territorial and functional location of their implementation or location. And also implies the availability of tools for operational accounting of all primary documents and transactions, ideally - in their places of origin, as well as their analytical processing in order to make management decisions and further dissemination of data between departments and employees.

An important aspect is the construction of a "single" information space to avoid the need to enter data into different systems, reduce the cost of purchasing information systems and minimize errors in data entry and processing.

In my opinion, any business is like a living organism, and here we can draw an analogy with the human body. ERP system is the circulatory system of the enterprise! It fills all components of the business with "oxygen" and everything necessary (gives extra energy and opportunities), the first to respond to change; helps to identify and fight "viruses and bacteria" that can affect the business both internally (internal abuse and errors of employees, inefficient management of resources, fixed assets, etc.) and externally (delays in supply, low quality of materials received / goods / services, large receivables, etc.). I want to note at once that any ERP is a powerful tool for business development in the skilled hands of the company's top management, but it is not easy, because you need to learn to operate with data and the system. Whether it is necessary to respond to the signals provided by the ERP system, and how to respond, decides the company's governing body.

Modern technologies can inspire people to new ideas, open new opportunities and horizons, but people do business, and this is a fact. No ERP system will be able to autonomously (without human intervention) to manage and develop the enterprise.

Today, the implementation of the ERP system is both a bright hope and a terrible fear of the management of any enterprise. It is no secret that the statistics of successful implementations are not very comforting. Every year there is information about thousands of projects to implement enterprise management systems that failed and it is not a specific software vendor or system, although their choice should be treated thoroughly, assess not only current benefits but also opportunities to develop / expand functionality ERP in the future (will the ERP system be able to meet the needs of a growing organism (business) and develop / transform with it later).

In my previous articles, " Microsoft Dynamics AX Update: When to Decide Whether Efforts Are Worthwhile and How to Evaluate It ," and " The Modern CFO as a Digital Reality Entity ," I've already shared information about which ERP systems are leading the way. global market and on the example of Microsoft's Dynamics 365 line of solutions ( Microsoft Dynamics 365 Finance , Microsoft Dynamics 365 Supply Chain Management , Microsoft Dynamics 365 Business Central , Microsoft Dynamics 365 Customer Engagement etc.), drew attention to the benefits that ERP solutions provide to businesses that use them today, as well as how modern technologies offered by Microsoft can help grow businesses in the future.

In this article I will talk about the internal and external factors that affect the implementation of the enterprise management system, from the point of view of its organization as a whole, regardless of what kind of ERP system it is.

The basic thing I want to start with is a preliminary assessment of the company's overall readiness to implement an ERP system . Implementation is a very time-consuming process that requires significant time and financial costs, active regular involvement of top management in the project, requires serious methodological training, adaptation of staff to work in the system, leads to a number of important changes not only individual business processes, but also business in general.

Soberly weighing your strengths and desires is the first and most important decision that a company's management must make before starting an implementation project. It is this decision and the unity of the people who make it that will greatly influence the entire course of the project. The key task of the contractor (contractor) at this time - to build healthy expectations of the Customer; openly and honestly show all the possible nuances, risks, and tools for managing them.

Returning to the analogy with the circulatory system, before installing a new "heart valve" (ERP system), you should calmly listen to the recommendations of the doctor (contractor), decide whether you trust him or not. Then, following the doctor's recommendations to prepare the body (company and team) for change (some companies need more than one month); be patient for the period of implementation and launch of the new system, as companies, like people, need time to adapt and properly use the new "valve".

See Also - Business Central Implementation  Power BI implementation

The unity of the top management of the Customer in the vision of the company's development strategy as a whole. There is an understanding of what stage the company is at now, what it seeks in the future, what the limitations may be and what opportunities the implementation of the EPR system for business will provide.

High professional level of the external team of consultants involved in the project implementation , and as a result - the trust of the customer's top management in the team of specialists implementing the project.

Availability of a detailed work schedule , which will reflect the entire list of tasks (scope) to be performed by all project participants (Customer and Contractor) at all stages of implementation (from requirements analysis to launch); the priority and sequence of tasks, as well as the duration of their implementation and the estimated budget are determined. This schedule will be the only roadmap for the entire implementation team (Customer and Contractor), which will jointly achieve a common goal.

Active involvement of top management of the customer company at all stages of ERP project implementation. Mandatory presence of the company's management at the Steering Committees, where the status of the project, possible deviations and ways to eliminate them will be regularly discussed. This will allow the company's top management to understand the situation and, if necessary, quickly make corrective decisions.

Scrupulous adherence to the project methodology, maintenance of project documentation (mandatory availability of design documents, test scenarios for each business process included in the project scope; specifications / terms of reference for development, development rules, etc.) change management, development (availability of version control tools) files and code, registration of modifications, their transfer between applications, etc.). Due to this, after launch, the company will receive not a "black ERP box", which is not clear how it works, but a ready-made structure and knowledge base that will successfully maintain and develop the system in the future; will make it easy to learn to work with a system of new employees. There is no need to fear that when a key employee with experience with the system leaves the company, knowledge of how the system works will be lost.

Competence of key customers of the Customer , who fully own the information and are well versed in the business process (organization, strengths and weaknesses, who is responsible for what, what are the key issues), understand the strategic goals of its development; have the authority to make decisions within their business process and manage the priority of their employees.

Regularly informing all employees of the Customer's company about the goals, deadlines and current status of the project. The introduction of the ERP system changes not only the technology but also the culture of the company. In order for the implementation to be successful, it is necessary not only to implement the project, but also to adapt the Customer's staff to the new system, which should become an effective tool (psychological and administrative aspects to which the manager must be ready).

Refusal to keep parallel records in several systems (old and new). "Sitting on two chairs" significantly slows down the adaptation of staff to the new system, reduces the impact of its implementation, and requires additional human effort, which is often manifested in dissatisfaction / conflict situations within the company, which may partially negate the benefits of implementing a new management system enterprise.

2020 has shown well that companies that have invested in ERP in advance have been better prepared to work in rapidly changing market conditions than their less technologically advanced competitors. Most of our clients have coped with the challenges of 2020 and despite the difficult situation continue to actively develop their business.

Implementing an ERP system is perhaps one of the best decisions you, as a manager or shareholder, can make right now!

For all questions related to the implementation of ERP projects, please contact me or leave a request on our website https://www.dynamicssquare.co.uk/

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