How to select and implement ERP?
Selecting an ERP which fits perfectly with a business infrastructure is a lot of work. The most used and sold ERP systems also has numerous implementation failures. Based on a business structure and demand an ERP procurement should be made and not based on its price point or familiarity. An enterprise resource planning system procurement usually costs a considerable amount of money. So, proper research of the market is essential along with a roadmap of how the business is going to be operated after the implementation. The detailed description of some of the key-points of selecting and implementing an ERP system is discussed in this article.
Analyzing needs and measuring the necessities of an ERP
Before looking for an ERP that fits with the company system, start analyzing the critical success factors (CSFs). CSFs are the factors which are obligatory to attain in order to be successful. A company can use CSFs to determine if a requirement is really critical for the overall success of the business. However, if a requirement is not relevant to a CSF, then it is not important for company success.
A company is required to find out the CSFs to go for an ERP implementation. If the cost of the procurement is higher than the amount received and saved – the whole idea of acquiring a system is not feasible.
It is also essential to keep the list of ‘needs of a company’. This list will come in handy while working with the ERP vendor, to analyze the needs of customizations and integrations required in the ERP, to fit in the company’s system.
· Measuring success
Before starting any ERP project, a company should measure success in terms of saving money. If they can find out ways of revenue increment, market share and more streamlined business processes by implementing an ERP then it will be a successful plan. Besides, measurement of success also plays as a motivator factor for the employees and gives them a clear idea as to why an ERP is needed in the company. Thus, they will be more eager to learn about the system and work with it.
· Manage the risk
Looking out for the potential risks and their likelihood of occurring is a very important task. It is the primary requirement of a company to map the risks before implementing an ERP.
All the teams closely related to the project should come up with strategies to mitigate the risks.
The factor which might cause damage must be kept at bay before preparing the organization for an ERP. The employees should also be involved with the risk management tasks. Often a supervisor does not know the very scaled-down detail of a process but a clerk who works with the process day and night knows every detail. So it is ideal to take input from all the clerks involved and avoid the probable problems to take place in future.
· Employee involvement
Identify the amount of knowledge and information the employees possess. Assigning internal employees to different tasks makes the process a lot better than having only a designated team.
It is important to take employee input and the issues they are facing while doing their job. Only after knowing the internal issues a successful ERP implementation can be expected.
· Upper management support
Companies which struggle most with an ERP implementation are the ones which lack upper management level involvement. If the superiors do not support and provide adequate knowledge to their team, the employees get perplexed and becomes unable to provide any further input.
Furthermore, the management level employees are the ones to bring out an order in a corporate environment. To bring awareness about a certain project, to influence team members or employees about a certain cause, to address a change in the work environment and manage that change properly- all these tasks are done by an upper management employee or employees and in the case of an ERP implementation these steps are crucial.
Above are the factors which should be maintained in an organization before implementing an ERP. The steps which should be taken post and pre implementation of an ERP are stated below:-
· List of requirements: -
The process of implementation should begin carefully by defining the scope of the project. At first, specific business processes and system requirements should be jotted down. The more specific and detailed one can be, the clearer the requirements would be to the vendors.
Often organizations select ERP system based on factors such as price, current trends, technologies and various flashy components. Without a good fit, companies are left with expensive customization and integrations making the whole ERP experience an elaborate one.
Assumptive and absent requirements get the project budget higher without having any usefulness integrated into the ERP. Thus, pointing out the specifics can provide the vendors a clear picture about what kind of tools and features are needed to solve the business requirements.
· Reference Collection: -
It is essential to communicate with companies in the similar industry. Better if clients of the same vendor can be found while implementation. Three such clients of the vendor should be contacted to share their experience. It is not easy to find 100% satisfied clients of a vendor but experiences of such clients can provide an insight about the vendors.
· Appointing an internal project leader:
It’s not ideal to solely rely on vendor- appointed project managers or IT managers, having someone from both side is advised in most cases. Selecting someone within the organization who has an overall knowledge of the previous system and is comfortable managing software systems makes the whole process easier.
An internal project manager would be responsible for collecting user requirements, learning the new system and helping the vendor with data conversion. Employee trainings are also conducted by this person as he knows until which segment an employee should be fed about the new system.
· Training on the ERP system: -
Working with a new system requires employee commitment and training. It’s important to train the tech-savvy employees first because they can teach the other employees from time to time. Usually a project manager becomes the appointed person who coordinates the training sessions and acts as a point of contact for the other employees. So, even after the training period employees must get updated about the ERP system.
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