ERP implementation plan (ERP implementation process guide)

You've completed the crucial step of selecting your ideal ERP software, and now it’s time to move forward with implementation.

It’s no secret that ERP implementation can be challenging. Many projects fall short of expectations, so failure is all too common.

Success in this endeavor requires planning, thorough preparation, and the right team to guide the organization through ERP implementation.

What is an ERP implementation?

An ERP implementation is the process of integrating an enterprise resource planning system into all the departments of your business. This includes finance, human resources, sales, manufacturing, and more. Implementing ERP software involves several stages, such as ERP planning, configuration, customization, data migration, and ultimately going live.

Key stakeholders must be consulted throughout. This step-by-step guide provides insights to help you make informed decisions and avoid common missteps. Implementing an ERP system can take several months and involves tasks from data cleansing to user training.

What is the ERP implementation process?

The ERP implementation process includes critical stages like software installation, data migration, process mapping, and user training. How well you manage this process will determine your success.

So, where do we start?

This guide will help you plan your ERP implementation from start to finish. With real-world advice, expert tips, and step-by-step breakdowns, we’ll cover:

• How to implement an ERP system in seven simple-to-follow steps
• Creating an effective change management plan (and who should be helping you implement it)
• Hidden ERP implementation costs, and how to forecast them
• Migrating your existing data to your new ERP system
• Going live and how to evaluate the success of your project

It won't (unfortunately) implement your ERP for you. It will, however, it will provide the information, resources, and templates to help you understand the process and increase your chance of success.

And isn't that almost as good?

What are the steps of ERP implementation?

1. Assemble your ERP project team: planning who should be on the team responsible for ensuring your implementation goes smoothly across all departments

2. How to create an ERP change management plan: determine how to support your team through the migration from old systems during your implementation

3. Estimating your ERP implementation budget: how much should your ERP implementation cost, and hidden costs you may not have anticipated

4. Starting your data migration: moving your data from old systems to your new system needs a plan - and it starts here

5. Training your users to use your ERP: how to decide how much training each user of the system needs

6. What to do during your ERP go-live: you're ready to put your system live - how to ensure everything goes smoothly

7. Evaluating whether your ERP project was a success: you've completed your ERP implementation - was it successful?

1. Bring together an ERP project team

First things first: it’s going to be pretty miserable planning this out on your own. Creating an efficient and dedicated ERP implementation team will make your job much, much easier.

To start with, you’ll need the following ‘core’ members.

• Project manager: the leader. You, probably. 
• Application analyst: responsible for data migration and cleansing
• Application developer: in charge of system customization
• QA test engineer: heads up system testing and performance efforts

To ensure your implementation goes smoothly across all departments and to avoid the workforce dismissing your plans as just ‘IT telling us what to do’, you’ll need a few more people.
These depend on your key stakeholders, which will vary by company and the functionality you’re implementing.
Here are some example stakeholders you should include when implementing various functions:

Should I hire an ERP implementation consultant?

Short answer: yes, if you lack in-house and you can afford it. An experienced ERP consultant will have seen it all before and can circumnavigate problems before they arise.

It is possible to implement successfully without one, so don’t despair if your budget can’t stretch or your accounts department is tight-fisted.

How long should an ERP implementation take?

An ERP implementation shouldn't be rushed. Your ERP will affect every function of your business, so take the time to plan and process the changes you are bringing.
Typically, an ERP implementation takes 4 to 8 months, but this varies with project complexity. Smaller businesses using out-of-the-box systems may finish in just a few months.
A complex implementation for a global organization with customizations, multiple locations, currencies, and languages can take much longer, potentially even years to roll out company-wide.

2. Create an ERP implementation change management plan

There are two sides to this, really.

First, you’ll want to plan out your ERP implementation in steps, and delegate these across your implementation team depending on expertise.

We’ve got an in-depth template ERP implementation schedule here - though you can use the checklist below to get a handle on what needs doing quickly. Before setting off on your implementation, you should have plans in place for:

• Forecasting implementation costs and drawing up a budget
• Creating an ERP implementation schedule
• Migrating data to the new system
• Training your ERP user base
• Testing your ERP and going live
• On-the-day go-live activities
• Evaluating the success of your project

Tools like Trello, Google Sheets, and Wrike are excellent for collaborating on ERP implementation.  Choose the one that best fits your company’s project management style.

This step-by-step guide goes into each stage in the ERP implementation process in great depth

Second, you’ll need to plan ways to keep the company on side during the implementation. Change always brings a degree of disruption, but this can be minimized by:

• Clear communication of any anticipated disruption
• Allowing adequate time for user training
• Taking key stakeholder needs into account (you’re halfway there with this already, having included representatives in your project team)

3. Forecast your costs and draft a budget

How much does ERP implementation cost?

That’s a golden question. If it were easy to answer, there would be far fewer overbudget ERP implementations and far more people volunteering to project manage them.

According to a past Softwarethinktank industry study:

• 35% of ERP projects exceeded their budget by 0%–25%.
• 15% were over budget by 26%–50%.
• 6% were over budget by more than 50%.

This suggests that, overall, over half of ERP implementations run over budget. Needless to say, budgeting is a minefield, and you’ll have to be very careful.

Still, there are some costs it is possible to define. A good starting point is to assume that the cost of an ERP implementation will be at least 1% of an enterprise’s annual gross revenue.

You should then include all of these factors in your implementation budget to avoid being hit by hidden costs:

• Hardware/network upgrades: these will be far higher if you are implementing an on-premise system
• Staff overtime pay: an important one to remember - “we didn’t budget for overtime pay, sorry” is not a line that will go down well with your team
• Vendor training, customization and consultancy fees: if you’re lucky your vendor may have included these in the initial software price, but this is definitely not a given. Always check
• Data backups and storage: these are often bundled with cloud ERP costs, but always check.

What you can expect to pay for an ERP will vary depending on several factors, ranging from business size, requirements, and the number of users, but a Software Path report recently found that, on average, companies spend about $9,000 on average per user of a system.

Don't forget to budget for ERP training costs - 95% of companies whose ERP implementation fails only dedicate 10% of their budget to user training and change management.

Tip: For accurate results, also budget for productivity loss. No matter how hard you try, you won’t operate at maximum efficiency during implementation.

4. Start migrating your ERP data

So it begins.

You’ve planned as much as you can. Now it’s time to get down to the actual process of shifting your company over to the new ERP.

Data migration is the first step - if you get it right, you’ll have built a solid foundation on which to continue your implementation efforts. Get it wrong, and things may start to crumble.

Your application analyst should head up this effort as it’s their specialty. Be ready to assist them in:

• Data cleansing and verification
• Database setup
• Mapping legacy data to new database fields
• Data transfer to the new system
• Testing and verification of legacy data
• Testing and verification of new data inputs 

5. Start training your ERP user base

User adoption is key to the success of your ERP implementation project, and a suitable user training plan is essential in achieving this.

There are various ways to train your workforce, but most methods fall into ‘in-person’ or ‘e-learning’ categories:

A summary of the pros and cons of in-person and e-learning training methodologies

Regardless of which training method suits your workforce best, four features of all successful training programs include:

• Role-based training to streamline the process and keep time-poor employees on-side.
• Opportunities for trainees to offer feedback (and for the implementation team to act on it
• Clear communication channels with vendor support teams

Tip: Identify promising, tech-savvy members of staff to train as ERP superusers. They can then deal with low-level user issues, allowing you to focus on the task at hand.

For best results, why not try gamifying parts of your training plan? In a study by TalentLMS, 89% of respondents said a point-based system would boost their engagement, while 62% said leaderboards and the opportunity to compete with colleagues would motivate them to learn.

Use this to your advantage. Small perks for everyone who completes training tasks on time, and larger ones for top performers, will make training more appealing for busy employees.

6. Plan and initiate your ERP go-live activities

The ERP go-live phase marks the culmination of your hard work. If you thought getting married required a lot of planning, the ‘go-live’ stage may surprise you.

Things to plan include:

• System testing (pre- and post-go-live)
• Staff scheduling, including required overtime or temporary staff
• Identifying metrics for project evaluation
• Creating a communication strategy for system downtime
• Network speed and reliability checks
• Data backup processes

Communication is key here, both with your team and the wider workforce. You’ll need to be clear on who’s doing what, when you expect it to be done, and what downtime hours you expect.

For more on the go-live stage of your ERP implementation, see:

Five aspects to planning a successful ERP go-live

7. Evaluate the success of your ERP implementation project

Start off with these simple questions:

• Has your company gone bust?
• Are they suing your ERP vendor for breach of contract?
• Did you manage to keep the project anywhere near in-budget?

If so, you’ve probably not done terribly. Give yourself a high five.

To get a bit more in-depth about things, you should use a combination of the following metrics:

• ROI. Have you seen a return on the money you spent on your ERP?
• Decrease in human error: A well-implemented ERP should reduce data errors due to process automation. If your training plan worked, employees should be making the most of these features
• Increase in productivity levels: This speaks for itself. Has the ERP achieved exactly what it set out to do? 
• Increase in client satisfaction: have turnaround times increased? Are you processing orders quicker?

This guide to calculating ERP ROI will help you assess how successful your implementation project has been

Am I ready to implement ERP?

Hopefully! However, it would be best to remember that implementing ERP is a significant undertaking that shouldn't be thought of lightly. To ensure your ERP implementation success, you should ensure that:

• Plan your ERP implementation thoroughly: Don't underestimate how long it will take to get your system live and functional in your business. Taking an extra month to plan and ensure your data is cleansed and prepared for migration, and that your team is ready for the new processes and systems, will save you in the long run compared with implementing before you are ready.
• Ensure your team is supported and receives adequate training: a study found that 95% of companies that failed during their implementation only spent 10% of their total budget on ERP training and support - don't be one of these companies.

Skipping proper training for your team will lower your company's buy-in for your costly project and reduce the benefits you'll get from the system. End-users need to know how to use the system well and feel confident in their daily activities—support and training isn't an area to cut budget!

Conclusion

We've now come to the end of our ERP implementation plan. A final word before signing off: all companies are different. You'll need to customize this template to the needs, schedules, and idiosyncrasies of your own organization for maximum success. 

Happy implementing!