How to select an ERP implementation strategy
As daunting a task as it may seem to evaluate and select a new ERP software system, the job is not finished there. It’s time to lay out an implementation plan. In fact, it is valuable to have an implementation plan sorted out before you select the new ERP package, as it may impact your ultimate decision and deployment platform.
The true benefits of your ERP purchase are realized in a successful implementation, but don't be fooled into believing that any go-live is "success". Be sure to define what success looks like for your organization in a successful deployment, and outline what you expect in the form of process re-engineering. A well planned, managed, and executed ERP implementation project will deliver the optimum results, improve operational processes, and provide an immediate return of more efficient business procedures and customer satisfaction.
Three common ERP implementation approaches are Self-Directed, Collaborative, and Turn Key. Let's take a closer look at the detail on each strategy as well as the pros and cons of each:
Self-Directed: The Company that purchased the ERP software takes on the overall responsibility of software implementation using internal resources to execute the entire project.
Collaborative: The Company that purchased the ERP software package teams with an ERP implementation services provider who has the necessary system expertise and business experience. The key to this approach is the partnership and teamwork involved between the Company’s internal team and the Implementation Services provider.
Turn Key: The Company that purchased the ERP software turns over all implementation project tasks and responsibilities to an ERP implementation services provider. The Company’s personnel and End-Users have minimal to no involvement in the implementation project and typically don’t receive training or interact with the system until it’s been completely configured and ready for live production.
In a Self-Directed scenario, pros can include cost savings involved by not purchasing outside consulting services, and having direct control of internal resource planning and scheduling. Cons can include:
- Workload and responsibilities on internal resources can be burdensome which can cause frustration and schedule slippage.
- Self-directed application training is usually not as effective as consultant-led or assisted training sessions.
- Opportunities for process improvement are minimized as the internal team will have a tendency to configure the ERP to the same processes they currently use.
- Data conversion from legacy systems to new ERP can be complicated and time consuming without the proper expertise.
In a Collaborative scenario, pros can include:
- The Company’s Subject Matter Experts (SMEs) understand their business and the ERP Consulting Provider understands and has experience with the ERP applications.
- A dedicated Project Manager from the ERP Consulting Provider can lay out a realistic implementation plan, manage plan execution, coordinate resources to meet schedules, and track project issues/risks.
- Process improvement assistance based on similar industry experience by the ERP Consulting Provider.
- Assistance with data conversion/migration through detailed planning and knowledge of ERP schema.
Cons can include additional project cost of using an ERP consulting provider. Keep in mind risks in a collaborative implementation approach are typically minimal if the project plan/scope is well managed and executed and team members on both sides effectively participate in all facets of the project as designed.
In a Turn Key scenario, pros can include minimal time consumed by internal resources, and typically the ERP implementation timeline can be quicker. Cons can include the company incurring higher costs, potential missed opportunities in process engineering, and some sacrificed "system ownership" due to lack of involvement and may be dependent on the ERP consulting provider more frequently.
This article is intended to provide a high-level overview of ERP implementation strategies. To companies that are thinking about purchasing or who have recently purchased ERP software, Godlan recommends they give significant consideration to the implementation approach. Godlan is a proponent of the collaborative approach as our experience shows that this typically results in the best overall outcome for our customers.
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