The 6 Steps To Finding And Implementing The Right ERP

If you’ve decided to dip your toe into the waters of ERP implementation, there’s a very good chance that you’re not sure where to start - all the way from finding a system then implementing it, there’s no readily available user manual you can refer to.

What a lot of people don’t know is that there are six main components to the process of finding and implementing the right system, and understanding them is the first place to start:

1. Knowing what your current needs are, as well as what those needs may look like in the future;
2. Finding the right system to meet your needs without too many unneeded bells and whistles;
3. Finding the right implementer to set the system up for both today as well as your needs in the future – the ability to scale;
4. Undergoing the proper training to utilize the new system;
5. The acceptance and buy-in of the people using the system;
6. A reformulation of the processes that the company utilizes now that you have a new information flow from the new system.

REQUIREMENTS GATHERING

The requirements gathering phase is critical in determining both the current state as well as the future state.

During this process, it’s vital to create the right team who have the correct attitude, acceptance, knowledge about the company, influence and power in creating the steering committee.

The steering committee must be backed by the highest levels of the executive team to give them the power they need to gather the information and make the decisions required in such an endeavor.

The team must look at what their processes are now – and importantly – why it’s done the way it’s done. Often, processes are created for logical reasons at one point in time, but then continue on long past their usefulness.

A common mistake made in requirements gathering is not appreciating the 20% aspect of the 80/20 rule.

80% of the time is the normal way we do things, but it’s the 20% and the one off situations that need to be examined and documented in order to be kept in the one off category or incorporated into the new system. In many cases, the new system with new functionality will be able to incorporate much of what was considered a one off.

In addition to understanding the current processes during the discussion phase, the future requirements, desires and feature wish lists arise. During this process, it’s critical to be able to speak to the requirements of the new system, while being able to manage the personal interests and ‘wants’ of various leveled people within the organization.

An important and often overlooked issue when undertaking the requirements gathering component of choosing a new system is time management. The amount of time required to be on the steering committee is generally twice as much as is expected going into the process. For that reason it’s critical to realize that the steering committee member will be unable to carry out their regular full-time job as well as being a member of the steering committee. With that in mind, backfilling the position, or at least a considerable percentage of it, is essential.

CHANGE MANAGEMENT

It’s important to start a change management campaign oriented around the emotions and fears that will inevitably come when people hear of new systems being implemented.

Concerns such as having the system put a bunch of people out of work or make someone’s job automated or being too difficult to use commonly arise during the selection phase. This can lead to reduced productivity and poorer than normal levels of staff retention, so at the end of the day you might have a great system but the human cost took a far greater toll than expected.

Fears and concerns can spread faster than the juiciest gossip in the company, so it’s important not to overlook a targeted and well executed change management campaign. To do so can leave employees feeling isolated, jaded, scared and disconnected with the company.

THE SELECTION PROCESS

With so many software options available (and those options are only becoming more and more vast), after determining the features and functionalities the company needs, the selection process begins in finding the right software.

In some cases information is required and a general RFI (request for information) is sent out to software companies that might be a good fit.

As information comes back in, a certain number of systems should start to look like a decent fit and at this point requesting proposals to get some kind of definition of structure and scope can be helpful.

It’s common that the request for the financial aspect is separated from the request for the proposal and structure, in which case you have a separate RFP (request for proposal) from an RFQ (request for quote).

THE SHORT LIST

So you’ve pulled out your big, metaphorical software cutting cleaver and you’ve shortened the list of ERP options from well over 100 to just four or five, and it’s now time to send a formal proposal with defined parameters and functionality based on the information learned throughout the processes.

It’s important to check the reputation of the software and implementation partner based on both customer satisfaction as well as expertise on the team that’s going to be doing the implementation

Reference checks can be a helpful way of corroborating statements, assuming the right questions are asked – usually about how the implementation team gathers data, responds to questions, handles problems, handles out of scope work etc.

THE SHORTER LIST - DEMO TIME

Some info has filtered back to you and once you have the list down to two or three you’ll want to create a demo script.

The demo script guides the software demo team around what’s important to show you in the demo.

Pro tip: Be careful not to allow a salesperson to use sleight-of-hand in taking your eye off the specific requirement to show you a different shiny object that might catch your attention – there’s time for that at the end.

At this time you can create data packages for the demo team to install so that you can see your data in their system.

Each requirement should be weighted based on need versus want and scorecards distributed to each person in the demo process. In some cases specific members of departments will come in for the aspects of the demo that are relevant to them, and in other cases the steering committee and sponsors may be in the demo throughout the entire demonstration, which may last as little as 4 to 6 hours or as much as 2 to 3 days depending on the complexity of the solution.

In some cases it’s reasonable for the demo team to explain that some functionality is not out-of-the-box and would be customized, and to then show you what the result would be. In this case be sure to get a full understanding of how much customization is required and what’s out-of-the-box.

It is often the case that the demonstration will not address exactly what is needed by the client, usually due to misunderstanding or lack of information. It’s reasonable to then set up an add-on demo around the functionality that needs to be clarified in order to give the company a strong understanding of the capabilities of the software

At the end of each day everyone involved in the demo meets to discuss and have their notes recorded, including non-analytical data such as feeling about the vendor, interface and overall likability and fit of the proposed system

THE FINE PRINT - NEGOTIATE

Before the final decision has been made, and you still have leverage from having two different options in play, it’s generally a good idea to negotiate the contract and terms with the software company and implementer.

It is critical to ensure you have a very well defined scope of work, as that is the legal obligation of the implementer with regards to what they will deliver. The more detail contained within the contract, the more protection you have against a poor or failed implementation.  Ultimately it’s important to make sure everyone’s on the same page to ensure things go as smoothly as possible with expectations not only being met, but exceeded where possible.

DON’T GAMBLE, CONSULT AN EXPERT AT THE BEGINNING OF THE PROCESS

The process truly begins by consulting ERP implementation experts such as Liberty Technology Advisors, who can help you navigate your way through the steps to ensure your implementation is a success. 65% of ERP implementations are seen as unsuccessful, so the best way to ensure you don’t become a statistic is to reach out to the team that lives and breathes implementations.