Ten Tips for a

Successful ERP
Implementation

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Reserved.
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Get Your House in Order

It is common for organizations to jump into an ERP initiative without first conducting the
due diligence and planning required to make the project successful. First, organizations
must get their house in order, meaning analyze exactly who they are as an organization,
what they want to be in the future, strengths, weaknesses, core competencies and areas
in need of improvement.
ERP software cannot be effectively implemented without clear requirements. By the same
token, clear requirements cannot be defined until business processes are defined.
Business processes cannot be defined until organizations establish a clear sense of
strategic direction. Organizations must give these areas careful consideration before the
ERP assessment and software selection process. Defining requirements and operational
needs as early as possible helps prevent unforeseen costs, timeframe overruns and
material operational disruptions.

Top ERP Implementation Challenges

The world of technology and business consulting is tainted by horror stories of ERP
projects gone wrong. While many organizations have experienced unsuccessful ERP
projects, only some have brought widely publicized lawsuits against ERP software
vendors because of failed ERP implementations. In a few extreme cases, these
organizations sue because the softwares malfunction caused a complete disruption to
their business operations.
Following are the top challenges that organizations face during the ERP implementation
process.
Challenge: ERP implementations take longer than expected
Fact: 75% of ERP implementations take longer than expected1
Key Reasons:

Unrealistic expectations of implementation duration

Inadequate accounting for business-oriented activities
Software customization and/or mismanagement of project scope
Lack of resources

Challenge: ERP projects go over budget

Fact: 55% of ERP projects are completed over-budget
Key reasons:

Unrealistic project plan and cost expectation

All figures cited from Panorama Consultings 2015 ERP Report. Available online at Panorama-Consulting.com.
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Hidden costs associated with ERP

Underestimated project complexity
Rushed ERP project and/or mismanagement of scope

Challenge: ERP projects fail to deliver expected business benefits

Fact: 41% of organizations realize less than half of expected business benefits from ERP
Key reasons:

Failure to manage the software vendor and project scope

Inadequate definition of functional requirements
Misalignment of ERP business software with business processes
Unrealistic ROI expectations

Ten Tips for a Successful ERP Implementation

1. Focus on business processes and requirements first. Organizations often get
excited about the technical capabilities or platforms that a particular software
supports and fail to consider how well it will actually fit their specific business
requirements. By drilling down into exactly how the business should run and what
their actual needs are, organizations can engage in more effective ERP
evaluations. Business requirements should be defined during selection and refined
throughout implementation.
2. Take steps to achieve a healthy ERP ROI. Maximizing business benefits
involves more than just developing a high-level business case to get approval from
upper management or the board of directors. Though that step is important and
must occur before committing to an ERP solution organizations also should
quantify expected benefits, establish key performance measures, set baselines
and targets for those measures and track performance after go-live.
3. Ensure strong project management and resource commitment. A wellmanaged and supported ERP project will always bear better results than the
alternative. Best-in-class initiatives share a number of attributes, including the
direction of a strong project manager, the inclusion of in-house subject matter
experts, the implementation of a risk management plan (along with mitigation
steps), and ongoing phase reviews. If the implementation is not being handled
properly or failing to reach milestones, it is advisable to retain the services of a
third-party ERP consultant.
4. Solicit executive buy-in. A successful project needs support from all topmanagement, including the entire C-level, to address problems and enact
solutions. Organizations often find that regular project reviews with executive or
steering committee members help managers swiftly address issues as they come
up and maintain a satisfying project momentum.
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5. Take time to plan up front. It is important to realize that an ERP software vendors
motive is to close the deal as soon as possible. No matter how smooth the vendor
is or how perfect the system seems, organizations must ensure that the deal is the
right deal for them. Organizations should validate the vendors implementation plan
and its understanding of their business requirements. In addition, organizations
should budget resources to thoroughly test new business processes, security roles
and customizations. Perhaps most importantly, organizations should develop and
enforce communication plans to keep employees and stakeholders informed of
developments and motivations.
6. Ensure adequate training and change management. End-user training,
organizational change management and job design are critical components of a
successful ERP implementation. ERP systems can create a panic if employees do
not understand how to use the software effectively. ERP functional training should
focus on business workflows and technical know-how rather than transactions. The
train-the-trainer approach is a proven way to embed knowledge into the
organization.
7. Understand why you are implementing ERP. While it is easy for executives to
play a keep up with the Joneses game and decide that because other
organizations are running SAP or Oracle they should as well, it is harder to
consider that maybe no ERP system is needed at all. Perhaps process
improvement, organizational redesign or targeted best-of-breed technology will
meet business objectives at a lower cost and with less disruption. By clearly
defining business objectives, organizations can make more appropriate decisions.
8. Focus on data migration early in the process. Data migration is incredibly
complex and entails a certain level of business and technical risk. Additionally, it
is affected by the number of sites that are implementing the software, how many
legacy systems are being replaced and how many users are involved. Following
are techniques to help your organizations perform data migration:

Define a data migration strategy up front including master data (customer,

vendor, product) and transactional (open PO, open invoice) data
Communicate data migration plans to employees and end-users
Remember that its never too early to begin scrubbing and mapping data
Thoroughly verify migrated data during conference room pilots and testing
Remember garbage data will create problems with your ERP solution
Dont forget to plan for historical data and archival and access of data

9. Leverage the value of conference room pilots (CRPs). Functional and

integration testing are important measures to take before the system goes live.
These tests (or CRPs) ensure the software works according to design specs and
that data flows accurately through the system. The value of CRPs is also a key

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contributing factor to the success or failure of the project. The following nontechnical factors are critical for a successful implementation:

Well-defined business process and workflow definitions help communicate with

end-users and train employees on the new system
Business process and workflow gap analyses tell employees how the old way
of doing things relates to the new business workflows
Organizational change and impact analyses along with consistent, targeted
internal communications help employees assimilate to the changes

10. Chart the course. Launching an ERP implementation necessitates clear

communication about the projects purpose and expected benefits to all
employees, end-users and any other concerned stakeholders. A project charter is
a good way to clearly define organizational objectives and make a compelling
statement about the importance of the initiative. The charter should include all of
the benefits of the new system, as well as frequently asked questions, upcoming
organizational changes and any other pertinent information. Make sure that
employees know that their opinions and questions are important and will be
addressed.

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Conclusion
ERP projects often exceed timeframe and budget expectations. Even worse, they fail to
deliver many of the promised benefits that organizations plan for and expect. By
understanding the reasons behind these pitfalls, organizations can build realistic plans for
their ERP software implementation. It is important to realize that many of these challenges
are less about technology and more about process and organizational change issues.
Aligning the software with your business processes and requirements is as tough and
time-consuming as it is critical.
When developing or analyzing ERP implementation plans, organizations should insist the
following elements are included:

Project Initiation: complete team structure definition, communication

planning, risk management and governance and control

Execution: data migration, training strategy, business simulation, gap analysis

and process testing

Close: cutover strategy, verification, transition planning, communication,

go/no-go decision, SOX testing and legacy data archive and system decommissioning

About Panorama Consulting Solutions

Panorama Consulting Solutions specializes in enterprise consulting, infrastructure
consulting and enterprise resource planning (ERP) consulting for mid- to large-sized,
private and public sector organizations across the globe. One-hundred percent
independent of affiliation, Panorama helps firms evaluate and select ERP software,
implements the software and facilitates all related organizational changes to ensure that
each of its clients realize the full benefits of their ERP implementation. We also offer our
clients IT strategy, business process reengineering, ERP staffing, sales assessments,
energy fueling assessments, emergency/disaster fund management, independent
verification and validation, project management oversight and expert witness testimony.
More information can be found on its website, Panorama-Consulting.com and Twitter feed,
Twitter.com/PanoramaERP.

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