by Siying Wang
Launching an ERP system in your business is one of the most complicated and high cost propositions. However, the potential mistakes and unexpected situations are around every corner. How do you make your ERP system implementation a success? Listed below are 10 best practices in the ERP evaluation, purchase and implementation process that helps you avoid becoming an ERP horror story.
Best Practice #1 Define clear goals for your ERP project
The simplest way to avoid failure in the ERP evaluation process is knowing why you need an ERP implementation. Before you start, we strongly recommend you look beyond the immediate business needs you are trying to accomplish. With clear goals, you can finally evaluate what critical business needs the ERP solution will address for you.
Best practice #2 Have a clear understanding of your business processes
Many companies failed just because they do not have an “inside look” before they begin an EP evaluation. However, a clear understanding of business processes is important for evaluating suitable ERP software, and helps you maximize the business benefits and efficiencies.
Best practice #3 Make sure you have enough time and resources
There is a common failure in the evaluation process that companies often underestimate the resources and time needed to launch a new ERP system. A successful evaluation requires sufficient time contribution, commitment by top management team, and front-line employee involvement. Make sure you have enough time and resources to run evaluations processes, or you may consider the assistance from professional consultants.
Best practice #4 Understand the key features and chose the right ERP software
Some business owners purchase the ERP software just because other companies in the industry are using it or through friend’s recommendation. While the reputation of a certain ERP solution in a specific field is an important criteria for ERP selection, you still need to make your own choice based on understanding the how the key features are used in your office daily. The right ERP solution that fit the company’s needs will boost the business process, complete functions faster, and support the whole management team.
Best Practice #5 Do your own research and properly vet ERP vendors
I think the American version of what my father taught me is, “Do not put all your eggs in one basket.” Actually, before you make your final decision, you should have at least three vendors’ names in your hand. Always ask for references, particularly those in your industry, about what they like and dislike about their ERP systems. Then call and discuss in detail the functionality, features, and challenges with vendors, do not just ask “yes” or “no” questions.
Best practice #6 Justify the investment and negotiate the contract
Purchasing ERP software sometimes means money costing, and you should always remember to justify the investment based on the specific ERP solution that you select. Be smart on your budget, the potential tangible and intangible benefits should compare to the costs. Then, you may get a better negotiating position because of your dedicated investment performance analysis.
Best practice #7 Make sure your data inputs are correct
Some of the clients fail in ERP implementation just because they input the wrong data. Your ERP system will work for you only if you input sufficient and accurate data. Therefore, if you are willing to minimize the potential errors and increase success in EP implementation, it is imperative to make sure that you put the right documents, programming, and procedural parameters in place.
Best Practice #8 Establish an active testing environment
Many ERP projects are deemed failures because of insufficient system and software testing before full operation. Before you get started, do not forget to look at various areas that may cause future problems. An active testing environment will help you avoid costly unplanned downtimes, such as unauthorized access, system overloads, and invalid data entering.
Best practice #9 Invest in training and education
The lack of investing in training and education can prevent an ERP implementation from succeeding. Therefore, ERP training and education is very important as most users must learn the keystrokes and transactions which are required to run the entire system. In addition, the well-trained employees may help your company shorten the frustration period of transition.
Best practice #10 Launch a maintenance strategy
It is obvious that the subsequent maintenance services absolutely are critical for successfully launching your ERP systems. If you do not take advantage of your support services, your systems will get outdated quickly and prevent you from improving your business processes. Therefore, a maintenance strategy should be added to the implementation process. Always ask your consulting partners for help on software upgrades, periodic system reviews, system modifications and more.
Reference material: How to Evaluate ERP Software
Siying Wang is an MBA candidate at the University of Texas at Dallas interning with us this summer.