ERP Implementation: 9 Step Guide for Success

Enterprise Resource Planning (ERP) implementation is a comprehensive process of migrating a business from their current software or manual processes to an integrated business software solution.

This involves transitioning a business' operations into a unified system that can manage multiple business functions simultaneously.

For manufacturers, this means combining financials, manufacturing operations and sales into one system.

The ERP implementation processes goes beyond simply installing new software. It includes transferring existing data, training staff on new processes, and helping your business adopt best practices. 

A successful ERP implementation project provides businesses with software that enables critical visibility they often lack. You can gain insights into your stock levels, understand the true cost of jobs, determine how long jobs take, and improve your ability to schedule and complete work efficiently.

Modern ERP solutions can help you understand your full operational costs and create systemic efficiencies that weren't possible with fragmented or manual systems. The process typically takes two to nine months depending on requirements. Active involvement from key stakeholders is needed to drive meaningful change within your organisation.

Enterprise Resource Planning (ERP) implementation is a comprehensive nine-step process that transforms how a business operates.

It starts with assessing your current systems and identifying the need for an integrated solution that can manage multiple business functions. The process involves defining the project's scope, choosing the right software, and configuring a solution that meets your business's specific needs.

Implementation includes stages like data migration, where existing information is transferred to the new system, and extensive testing to ensure the software works effectively.

Staff training and change management is particularly important, especially getting key stakeholders involved and driving organisational change to ensure the project's success.

The final stages focus on go-live and post-implementation support. This includes a mock go-live session, dedicated consultant support during the transition, and ongoing training to help you optimise your new system.

• Identify legacy systems and inefficient processes
• Look for an integrated ERP solution that can manage multiple business processes
• Understand what your business needs now and in the future

• Determine which modules to implement in your initial implementation
• Classify implementation type (standard, advanced, or complex)
• Understand customisations affect implementation hours and budget

• Evaluate current business challenges
• Consider future growth potential
• Select ERP software that can scale with your business

• Discuss business requirements
• Implement best practices
• Address unique business needs

• Transfer information from existing systems
• Prepare data templates
• Review migrated data in the new ERP system

• Replicate current processes in the new ERP system
• Identify and resolve potential issues
• Ensure staff familiarity with the software

• Involve key stakeholders and ensure team buy-in
• Create a playbook for your new system
• Prepare staff for new processes

• Conduct mock go-live sessions and project team training
• Prepare opening balances
• Access to dedicated consultant support during the transition

Lack of stakeholder involvement is an issue in ERP implementation. When key people in the business are not driving the implementation effort, it becomes very difficult to succeed.

Some employees are used to doing things a certain way, and without proper involvement from project team members, managing these employees through the implementation process becomes challenging.

The project sponsor and project lead need to actively manage resistance to change and ensure user acceptance and commitment to the new system and processes.

ERP implementation requires key stakeholders to be involved throughout the process. This means having representatives from different departments who can provide insights, raise concerns, and help drive the transformation.

Involving everyone ensures the implementation is smoother and the load of the project is shared across multiple people, rather than being overwhelming for a single project manager.

An ERP implementation life cycle is not short, and many businesses underestimate the amount of work involved. If you do not properly resource the project or dedicate enough time to the implementation, it can either take much longer or become overwhelming that you give up.

Implementation plans are designed to accommodate businesses trying to run their day-to-day operations while simultaneously investing time in the implementation. Often, people do not realise the extensive work required, particularly in areas like transferring information and working through processes.

Sometimes businesses fail to understand the complexity of tasks like building inventory files, which is a critical and time-consuming part of the implementation.

Remember, "short-term pain for long-term gain". Be realistic about the time and effort required and be prepared to invest appropriately in the ERP implementation plan.

The complexity of an ERP implementation project extends beyond simple software installation. Customisation levels - whether standard, advanced, or complex - directly impact implementation costs and hours required.

The implementation complexity varies based on the specific ERP solution modules you choose to implement. More complex implementations involving significant customisations can increase both time and ERP implementation cost.

Complexity isn't just technical, but organisational. The implementation requires businesses to potentially reevaluate their existing processes, which can be more challenging than initially anticipated. This process of reimagining and restructuring certain business operations adds another layer of complexity that many businesses fail to factor into their initial timeline estimates.

At ECI, we strongly advocate for a phased ERP system implementation approach. Our approach involves a comprehensive two to nine-month process that gradually prepares your business for your new ERP software, working through issues methodically ensuring comfort and understanding.

In contrast, a big bang approach can be rushed and potentially disruptive. Such an approach involves minimal pre-implementation training, with most learning happening on-the-go, and does not provide sufficient time to discuss and optimise business processes. This method doesn’t allow enough opportunity to understand the nuances of the new system and your specific business requirements.

The phased implementation allows for deeper engagement, more thorough training with your implementation team, and a more strategic transformation. While you might not be a complete expert by go-live, you are significantly more prepared and equipped to use the new system effectively - without significantly disrupting your business.

Cloud ERP implementation differs significantly from on-premise implementation, primarily in terms of technical complexity. Implementing cloud services is considerably quicker and more straightforward, requiring less technical infrastructure.

For on-premise systems, businesses would need to involve a third-party IT company, set up a physical server, and navigate networking requirements. These additional steps make the on-premise approach more technically demanding and time-consuming.

In contrast, cloud ERP configuration is much simpler. The cloud approach allows for faster setup and fewer technical complications, making it a more streamlined option for businesses looking to implement a new cloud ERP software. The key advantage is the reduced complexity and faster implementation timeline with cloud ERP systems.

Building a strong internal project team is critical for any successful ERP implementation. This team should encompass project sponsor, project lead, and key people from different departments within your business are involved in the implementation process.

The project sponsor and project lead should ideally be within the leadership team. In smaller businesses, even having two project sponsors is better than one. The most successful implementations involve the owner or general manager being actively engaged in the project, even if they are not doing the day-to-day work.

Having multiple people in the implementation team shares the project load, making the implementation less overwhelming. The workload is distributed by having different implementation team members focused on specific areas like financials or production. If one person tries to handle everything, it can be difficult to manage the implementation and their regular job responsibilities.

A strong internal project team ensures businesses are engaged, and is a primary driver of change within your organisation. This not only helps share the implementation workload, but it also ensures you attain diverse insights from different departments while maintaining momentum and accountability.

The implementation process involves examining current processes and guiding businesses towards more optimised methods and best practice processes.

While some businesses might have unique processes that require exceptions, the goal is always to refine processes based on best practices to ultimately make your business operate at peak performance. This sometimes requires businesses to be open to changing existing processes.

For example, production scheduling might not be done effectively. With an ERP system, scheduling could become a full-time role depending on the number of jobs the business manages. Businesses willing to adopt new, more efficient ways of working are setting themselves up for greater success.

Vendors should help businesses understand that changing their processes can lead to significant operational improvements.

For an ERP implementation to succeed, the project sponsor and project lead must be at the leadership level, and cannot simply delegate all the responsibility down the organisational hierarchy.

The leadership team needs to actively drive change within your organisation, helping manage employee resistance and ensuring project tasks are completed on time. If an employee falls behind or struggles with the implementation, the project sponsor should step in to help free up resources or address obstacles.

The most successful implementations occur when the owner or general manager is actively engaged in the project. Their involvement ensures that priority stakeholders are committed to the change, that project momentum is maintained and that resources are appropriately allocated.

Leadership buy-in helps ensure resistance to change is effectively managed and that the entire organisation is committed to making the ERP project successful.

Change management is more important than you might think. Employees are often resistant to changing processes, making change management a vital aspect of implementation.

Effective implementation means getting everyone involved, ensuring team buy-in, and helping employees understand and adopt new processes. This is where the project sponsor and project lead play a 'make or break' role in managing this organisational transformation.

Effective change management requires team members to understand the need for change, offering help to employees with new processes and managing resistance to new ways of working.

Encouraging employees to learn and adapt to the new system occurs when everyone in your organisation is committed to change, with executives actively promoting a culture of continuous improvement and adaptability.

Return on investment comes from configuring ERP software to address specific business challenges, such as tracking stock levels, understanding job costs, and creating accurate reporting mechanisms.

The implementation process focuses on setting up detailed reporting capabilities that allow you to analyse your operations more effectively. This includes tracking inventory, scheduling jobs, and providing insights into pricing and profitability. The goal is to run reports that enable more strategic and profitable decision-making.

Realising full ROI typically takes about 3-6 months. The speed and extent of benefits depend on how comprehensively you adopt the new system and its processes.

System adoption is not just learning the software, but also embracing the change and potentially new processes that come with it.

Encouraging employees to participate in training sessions and allowing them dedicated time to practice using the new system is paramount. Help staff become familiar with the software and comfortable using it in their day-to-day work using the new ERP system.

Business process improvements typically take around six months to fully materialise after ERP implementation. During the initial months, businesses are still adapting to the new software and may need to refine processes to achieve optimal results.

The speed of process improvement is directly linked to how actively your business drives organisational change. Some businesses may experience significant efficiency gains as quickly as six weeks after go-live, while others may require a longer adaptation period.

The key is being open to changing existing methods and adopting the ERP system's recommended workflows.

Process improvements can be transformative, potentially changing how certain functions like scheduling are managed. ERP implementation requires you to reimagine your existing processes, leveraging the ERP system's capabilities to create more efficient and effective operational methods.