The Big Bang Theory Of ERP Implementation: Are You a Believer?
When an ERP implementation team is trying to arrive at a plan, a budget, and a timeline, the first fundamental question they must ask is: are we going to try to implement the entire (global) organization at once, or are we going to split this into smaller pieces, and do multiple implementations of ERP over time? The tradeoffs are straightforward: all at once (big bang) is less painful; phased is less risk.
Big Bang ERP implementation is less painful in the way that one big surgery is less painful than multiple small surgeries. Philosophers can argue whether the total pain incurred really is more or less; what is unequivocal is that healing for the entire organization begins sooner. No one has to operate their business in two different computer systems, there is clarity about what the financial system of record is, and the entire organization moves forward on the same day. There is a shorter time period for change anxiety, less time for the rumor mill to generate horror stories, and fewer excuses to “wait to fix things until we convert to ERP”. Organizational changes can be made once, and not repeatedly, corporate issues can be sorted out up front instead of emerging piecemeal, and the enthusiasm of a first implementation will apply to the entire organization.
Phased is less risk because the fact is, no one really knows whether the system works or not until ERP go live. Testing and retesting and retesting may have drive the probability of a general business failure to tiny percentages, but the fact is, someone eventually wins a lottery. Likewise, a small number of ERP implementations can run into catastrophic problems at go-live, and a failure for a division or business unit is a different thing than a failure for an entire corporation. Phased is less risk because it is mathematically possible to assign a greater number of support people to a smaller physical group of plants or businesses. Phased is less risk because the solutions are more focused.
So how do you choose? At the end of the day, you have to minimize risk at the lowest practical cost. If your organization comprises one to three plants and a business headquarters, you would not even consider phasing you ERP implementation, unless you felt you did not have enough bodies to provide support. If your organization has multiple divisions, multiple legal entities, and/or has facilities overseas, it may be too big or too complex to consider doing all at once. If the solution in your industry is so standard and repeatedly proven that risk of ERP implementation failure is considered to be zero, then Big Bang makes more sense. In between these conditions is the gray area, where you must attempt to calculate how many people – internal and ERP consultants – it will take to do all the work at once at minimal risk, as opposed to a smaller team doing the same work multiple times at minimal risk.ERP implementations are difficult; err on the side of caution.
Featured white papers
ERP Implementation: 9 steps to success
The 9 proven steps you should follow when implementing ERPDownload
ERP Implementation Checklist
Over 120 actionable steps to implementing a new ERP successfullyDownload
Manufacturing ERP Implementation Checklist
Over 70 actionable steps to rolling out new manufacturing ERP softwareDownload
How to select an ERP implementation strategy
Guest blog from Godlan discussing types of ERP implementation strategies
Calculating ERP implementation costs of top ERP systems
Where your ERP implementation budget should be allocated, and pricing models of top ERP
The four most critical steps during an ERP implementation
Ensure your implementation doesn't miss out on these four key steps to success