5 Phase ERP Implementation Process
Most experienced consultants and industry practitioners believe that successful ERP (Enterprise Resource Planning) software implementations are created from equal parts art and science. With science, consistent input and measured efforts can predict and replicate the outcomes of pre-defined actions and processes. However, with art, we model our best representation or expression based on the diverse patterns, variables and conditions at a given time. The outcome is uncertain for we often make adjustments to accommodate new ideas, information or acquired knowledge as we make progress.
Enterprise Resource Planning software selection projects should follow a systemic approach and disciplined process in order to maximize the probability of a forecasted result and successful outcome. The following ERP software selection phases highlight a methodical and proven approach used by many consulting firms.
Phase I - Project Planning
The software implementation planning phase should start with the end in sight. Proven project plans start with repeatable implementation methods, project management oversight and best practices. For example, a single project plan task or activity should not consume less than 4 hours effort or more than 20 hours (or if it does exceed these thresholds it should be consolidated with other activities or segmented into more specific tasks, respectively). All tasks should identify activity precursors, be based on effort (not based on time or elapsed periods), assigned to accountable resources, be responsible for measureable results and directly contribute to specific project milestones. With proven project planning disciplines, you will be in a position to flex the plan, optimize resource allocations, spot capacity constraints, view work breakdown structures (WBS) and monitor the project's critical path. Microsoft Project is the most popular project planning automation tool and works fine for most ERP and accounting software implementations. If you're new to project management or planning, you may want to check out the Project Management Institute (PMI) and its related Body of Knowledge as a source for a proven project plan methodology supported by quality methods and disciplined processes.
ERP and accounting software implementation projects generally start with a project team kick-off meeting. With advanced preparation, the end of the kick-off meeting can conclude with a clearly defined implementation scope, establishment of the most salient tasks surrounding the project plan, identification of administrative procedures, project management guidelines and agreed upon project monitoring and control processes.
Key project team tasks to be completed in the Planning phase are highlighted below:
- Formal project team organization; Be certain you have a committed executive sponsor, an experienced project manager, subject matter experts (SMEs) for each line of business, cross company user representation and credible Information Technology (IT) staff.
- Clear project goals and quantifiable success metrics. Be sure to include discussions with executive management to be certain that implementation objectives are clear, relevant, measurable and agreed upon by the executive team.
- A detailed project scope. A vague or unclear project scope will most certainly contriubte to an increased project risk. Recognize that scope creep is a constant challenge in nearly all ERP and accounting software implementation projects. A clear and complete project scope will facilitate the project team in maintaining focus and maximizing the likelihood of engagement success.
- Efficient business processes. It is always a good idea to thoroughly review existing business processes with an open mind to business process re-engineering. Do not repeat inefficient processes in the new business software system simply because that's the way it has always been done. An ERP implementation period is often the ideal time to simultaneously upgrade business processes for an even more powerful return on investment.
- Documented business process workflows. This is a activity aided by process mapping software (visio, mindmap or even powerpoint can suffice) and whiteboard group sessions. Be certain that processes are defined from end to end in order that cross-divisional intersections and transfers are included.
- Determine ERP software utilization. Align your process workflow maps with the ERP software system's workflow navigation and capabilities. It's most likely that the enterprise resource planning software will accommodate most, but not all, of your process maps and functionality requirements. Software voids will be found and adjustments to either your processes or the software will have to be evaluated.
- If you are going to incur software customization, be certain to develop the specification and design documents as early in the implementation process as possible. Software customization is an activity often delivered late and frequently requiring multiple revisions before it is complete. Starting the customization process early can provide some buffer so that this activity doesn't end up on the project's critical path.
- Just as with software customization, create your system integration design documents as early as possible.
- Just as with software customization, electronic data conversions have a propensity to be delivered late. It is a very good idea to review a sampling of your existing data to understand its data cleanliness. Most organizations possess dirty data and do not know it or don't know the extent of it. Performing an early data sampling will allow you to identify how clean or dirty your data actually is and plan the data cleansing process appropriately.
A frequently repeated mistake made during the project planning phase is the development of incomplete, unclear or immeasurable project objectives. To cure this common issue, consider using SMART objectives which seek to make sure that the ERP implementation's strategic objectives and functional requirements are thoughtfully planned, managed and achieved in the production information system. SMART (Specific, Measurable, Actionable, Realistic and Time-Bound) is an objectives-focused project management acronym and method which outlines specific steps to define project plan activity items in a way that manages scope, outcomes and metrics. The SMART system starts with goals and requirements that are specific, measurable, actionable, realistic and time-bound. For example, a objective to 'decrease period end closing cycle time' is not a SMART objective; however, an objective to 'decrease period end closing cycle time from five days to two days by the end of the quarter', is a goal that has now met the ‘Measurable’ and ‘Time-Bound’ criteria to become a SMART goal.
Another common mistake which often contributes to implementation project failure is inexperienced or ad-hoc project management. Too many times we've witnessed so called "project managers" that were little more than project administrators or meeting planners. To maximize the predictability and realization of implementation success, insist on a formal project management methodology implemented by experienced project managers. Attempting to succeed in an unstructured ERP software implementation is a predictable disaster. Proven project management methodologies facilitate consistent, controlled and quality deliverables that meet expectations and achieve predicted results. Quality and disciplined project management should be used at all times to keep a real-time pulse on the engagement’s progress, time frame and budget, as well as mentor the project team and succeed in the inevitable people, technology and change management obstacles. Project management is a professional discipline, with a recognized body of knowledge and specific skills and competencies and should be positioned as your proactive insurance policy to ensure that the project is successful and the ERP system objectives realized.