With so many options available when it comes to selecting an ERP software solution, finding the right one for your company can be a long and stressful process. Companies must first identify their own specific requirements and business objectives, then determine which ERP solution offers the best features to suit those needs. And the challenges don’t stop after you’ve selected an ERP.
ERP implementation is a major undertaking for any organization, regardless of the company’s size. Whether you are upgrading your existing ERP, implementing the company’s very first, or merging legacy systems together to achieve one common enterprise platform, the process can be timely and complex.
So where do you start? And how do you make sure you’re getting the most value out of your implementation?
What is an ERP system?
Before we get into the selection and implementation process, let’s cover what an ERP is and why companies use them.
An enterprise resource planning (ERP) system is a type of business management software used to manage everything from procurement and accounting to project management. Using an ERP provides integrated visibility across all business units, while enabling efficient asset utilization and planning. What fuels this important piece of technology is data–more specifically high quality data.
There are many variables that define quality data such as completeness, information accuracy, standardization, classification, and proper formatting. In many cases, legacy data has been entered by several different employees with varying languages and interpretations, using multiple enterprise systems, and with little to no standard guidelines. Without complete, consistent, and reliable data, ERP search and reporting functionality is significantly limited and often misleading.
With the proper data in the right system, you can see benefits in operational efficiency, increased productivity, and cost savings. But the system you choose and the preparation you put into the selection and implementation processes will determine just how much value you can actually get out of the system.
What should you look for in an ERP system?
Before you can pick an ERP, you need to understand what exactly your organization needs. What is it you’re looking to do? Where are your current pain points? What are your primary reasons for implementing the ERP? What is your budget? Making a list of your needs, goals, and desired features will help you evaluate the different systems you look at. Then, you can start exploring options and come up with your shortlist to see demos, get pricing, and so on.
Top 10 ERP (https://www.top10erp.org/) offers an excellent free service where you can identify and compare some of the best ERP Software solutions based on specific manufacturing processes, industries, and technology requirements. Using their site can significantly reduce research time and assist you in finding solutions that best fit your needs and budget.
Most of all, it’s important to remember that this tool is meant to make your users’ workflows easier! Just because one option is the shiniest with the most features doesn’t necessarily mean it’s the right one for your business.
Who’s involved in the evaluation process?
An evaluation should involve stakeholders from the different departments that will be using the software. This likely includes representatives from your maintenance team and procurement team. You also want to involve your project leader, who will be managing the implementation, and the appropriate members of management who can see the big picture of how the ERP will fit with your organization. Each member of your evaluation team should have a unique perspective and expertise so you can consider things from all angles but avoid having too many people in the room (metaphorical or literal).
Five factors to consider when implementing
After you select the system you’re going to implement, you may be finished with the evaluation process, but you still have plenty to do. Implementation in itself is a complicated project that involves many different departments and people to go smoothly.
Before you start implementing the system, consider these five components:
Budget
Timeline
Project team
Existing data quality
Managing change
Establishing a project budget
Budget is obviously one of the biggest factors when implementing a new ERP system or upgrading your existing version. The project budget should not only include the cost of the ERP software, but also any additional resources, consulting fees, or services that may be required. It is important to consider all the variables and identify any additional expenses that may be required during the initial project proposal phase. The last thing you want is to run into unexpected expenses half way through the project, resulting in an uncomfortable meeting with your CFO to request additional money.
Budget considerations:
What is your total budget? Your software budget?
What consulting or support services do you need, and what is the budget for that?
How many employees are you budgeting for the implementation, configuration, and testing of the software? And how many hours (total and per employee) is that?
Establishing the timeline
The project timeline is equally as important as the budget. The timeline usually depends on the overall scope of the project, size of the organization and available resources. Some companies may prefer to go-live simultaneously, whereas larger companies usually work in phases, implementing the new system one region at a time. While you may need to be flexible with your deadlines at times, it’s important to have a clear roadmap of when each step needs to be completed so the project doesn’t linger indefinitely. Your timeline will also help you determine priorities, what is possible to do by your goal dates, and what can wait for later implementation.
Timeline considerations:
Are you rolling the ERP out in multiple locations? If so, are you doing them at once or location by location?
When do you want to go-live?
When is feasible based on the work required, budget, and other projects your organization has ongoing?
What features are most important to have immediately?
What might need to wait until after go-live?
Building the Project Team
An ERP implementation project is not a one-man show; it requires the expertise of a dedicated project leader, IT experts, and the maintenance or procurement team that will be using the software on a daily basis. The project leader will be responsible for establishing a project plan to ensure that tasks are completed on time and within budget. The IT experts will be involved to assist with any technical requirements and the upload of legacy data to the new system. Finally, the maintenance and procurement team will be involved to address any company specific issues or requirements such as the data entry process, standards, and format.
When building your project team, make sure to consider the scope of work needing to be completed. Team members will need to devote a certain amount of time to the project, which may mean their other duties must be shifted to other staff or deprioritized.
Project team considerations:
Who should be part of the project team?
Who is leading the project team?
Does the project team need to report to someone else?
How often will the project team meet?
How much time will project members need to budget for the project?
Evaluating Existing Data Quality
Data quality is often an overlooked area that can greatly affect the results of an ERP implementation project. If you put garbage in, you get garbage out. If the existing legacy data is uploaded to the new ERP system with inaccurate, inconsistent, or missing information, users will experience significant inefficiency and will not reap maximum return from the ERP investment. For this reason, it is important to evaluate the data during the early stages of an ERP implementation to determine whether or not the data requires cleansing.
IMA offers a free data evaluation, which will analyze the condition of your existing Material Master data, provide actual samples, and suggest solutions to resolve data quality issues. In the big scheme of things, data cleansing is a small price to pay to capture immediate cost savings and long-term ERP benefits.
IMA can also discuss ongoing governance of the data. While data cleansing provides good quality data for the initial go-live of the ERP system, eventually unmaintained data will lead to the same problems seen before: inconsistencies, missing data, duplications. Make sure to consider the longterm upkeep to ensure your ERP is effective and stays that way.
Data quality considerations:
What is the state of your data?
Is your data cleansed and standardized to a schema?
What information do you need from your data that you aren’t getting now?
What are the goals of your ERP implementation and will your data allow them to be achieved?
How do you plan to manage your data after implementation?
Managing post-implementation change
Change is inevitable and can sometimes be a scary thing for those who have done things a certain way for a long period of time. Change in the work environment can also bring job insecurity, frustration, and anxiety for employees if not managed properly. The key to effectively managing change is to thoroughly educate employees, while reassuring them of their role in the company and the benefits that the change will deliver. During the transition, make yourself available to employees for questions and encourage them to make suggestions and voice any concerns that they may have. Provide each employee with informative materials, such as user manuals and data sheets, to refer back to until they are comfortable with the new system. The most important thing is to maintain a positive attitude and not let employees get discouraged.
Post-implementation considerations:
How will you communicate the importance and purpose of the ERP to your employees?
What training materials will you provide?
Who are your trainers?
Will you plan to have any employee meetings? How many?
How will you encourage employees to ask questions/make suggestions/bring up concerns? Will there be public and private options?
Who will be responsible for responding to employee questions/suggestions/concerns?
What about the data?
As we mentioned above, the data you bring into your ERP system is extremely important. If you speak with any industry professional who has previously been through an enterprise system implementation, chances are they will tell you that data quality was one of the most critical and underestimated success factors.
Implementing a data cleansing initiative in parallel with an ERP implementation not only makes sense from a project success and ROI standpoint, but also from a budgetary perspective. It is often much easier to build the cost of data cleansing into a larger ERP implementation than it is to justify a separate project after the fact. In order to maximize ERP functionality and project success, legacy data must be merged together, cleaned, and migrated into the new system.
“Clean” implies that the data now maintains a standard nomenclature, possesses valid attribute-rich descriptions, and has been properly formatted to the specified system requirements.
A data cleansing solution provider will use a combination of internal software, subject matter expertise, and manual procedures to effectively clean, standardize, and enhance legacy data. Prior to project commencement, a custom Standard Operating Procedure must be developed to define the nomenclature, abbreviations, classifications, policies, and formatting structure that will be applied during the cleansing process. The Standard Operating Procedure will not only be used during the initial cleansing project, but will also be used in the ongoing governance of all future data entries. During the cleansing process, duplication and unidentifiable items will be flagged for company review. Upon review, these items will later remain in the item master provided that adequate information has been collected, or will be removed completely. Once the project is complete, cleansed data is prepared into a load-ready file for seamless migration into the new ERP system.
Undeniably, an enterprise system is only as functionally useful as the quality of data flowing through it. If you are planning to implement a new ERP system in the near future, do your team and your company a favor by including data cleansing as a priority in the project plan. In the end it will save you a lot of time, stress, and money, in addition to the shame of a failed ERP implementation.
Wrapping it up
An ERP implementation is a very big project for any company to take on, whether it be a small business or a large global corporation. Every project presents different challenges and requires a strategic approach. If managed properly, your project will be well worth the time, money, and resources you have invested.
To learn more about how clean Material Master data can benefit you, try out IMA’s free ROI calculator tool and see your personal return on investment estimates. You can also check out our no cost, no obligation data evaluation. For more information on data cleansing and related services for ERP implementations, contact info@imaltd.com!