Ashok Dash
Country Head - Implementation
ERP implementation is a great leap, for any organization. A successful implementation can boost your business; however, an unsuccessful one can destroy your business as well. Fundamentally, what one must understand about an ERP implementation is that it is going to impact almost every department in your organization, thereby linking almost all your applications
Talking about implementation, several clients still feel threatened by the duration and the efficiency with which it is conducted. This is because different software vendors have different methods of implementation. A persistent diligence is definitely required to fine-tune this process. It is often mentioned that HOW an ERP system is implemented is more crucial than the features and functions it comes with.
So if you are a first-timer, what are the common factors that you’d need to watch out for, if you’re planning on an ERP implementation in your organization?
You must first discover the answers to three important questions, before looking out for an ERP solution. These questions include:
What do you want to change in the current functioning of the company, in order to make better profits?
If you wish to incorporate a new technology to enhance your business, what role do you require that technology to play?
How do you wish to incorporate this technology to bring in tangible effects?
Most industrialists support the idea of hiring an ERP consultant before zeroing down on a vendor. This consultant should have sufficient experience with the required ERP system, and it would serve even more beneficial if he has worked in your industry as well. It is recommended that you discuss your requirements and your prospective ERP project with the consultant, and then narrow down on a suitable vendor.
I distinctly remember reading a very opinionated description of ERP implementation. The writer equates this implementation to an African safari. He states that just like how your chances of getting out alive from a safari, without a guide, is scarce, it is equally risky to plunge into an ERP implementation without professional help.
Another biting concern among most clients is the lethargic pace at which an implementation occurs. We’ve heard stories of implementation being done across several years, much to the dismay of the client involved. However, an insightful and intelligent team can complete this process in as less as 60days. Though meeting the live date is quite crucial, you must never push the vendor to resort to shortcuts, because problems occurring after the startup can be draining. If the initial data configuration turns out to be faulty, you will land up being choked by a multitude of issues, ranging from customer service to accounts. And implementation does not just end with putting the systems in place, but also includes training your staffs on the effective usage of the newly installed ERP system. You must ensure that all staffs get relevant training, and not a one day flash course. If this process is overlooked, there are possibilities of your staffs feeling not so associated to the process, thus resulting in mishandling of the system which would in-turn effect in the generation of errors. Testing at this stage would involve evaluating if your staffs are rendered capable of using the new system, to accomplish the company’s business, before the system goes live. This training should ideally not be an instructor-led classroom training about how the application works, but should be a manager-to-staff training on how your company is looking at using this system to enhance your business. For best results, you can use real company data for testing, track results, and compare them with the results you expect to reap.
Before deciding on a vendor, it is also recommended to ask for previous project plans. This will enlighten you of the vendor’s behavior at each stage of the project. It will also give you a good insight about the vendor’s ability to get into details, and his ability to factor in the practical aspects, into the project plan.
You must also ensure that the data being integrated across the system is assured to be close to 100 percent accurate.
Another important aspect to be considered before implementation is the ROI. ROI is often considered subjective. However, several industrialists opine that a guaranteed ROI which can be quantified can serve as a motivation to make the tremendous investment of time and money in implementing a new ERP system.
It is not wrong to ask for ROI as a deliverable, along with the project plans. This need not be an accurate figure; it can be a guaranteed but approximate level of net profit that you’d reap as a result of the implementation. The new ERP (Extended Readiness for Profit) offering supports this guaranteed ROI. However, several vendors feel intimidated by this idea. It is fair enough if a vendor cannot calculate a precise figure. But he can quote a significant portion of the vendor/reseller's compensation dependent upon some ROI metric. Guaranteeing ROI can be treated like guaranteeing mileage on vehicles. The habit and the performance of a driver will definitely vary. However, this does not cease the vendor from guaranteeing an approximate mileage return. I would in fact be pretty doubtful if a vendor can accurately predict the final results of implementing an ERP system. In most implementation it is noticed that the new features incorporated have dramatically changed the existing performance of the company, and most prior evaluations prove almost invalid. However, this is definitely for the good, because that the desired processes worked faster with fewer errors and delays, and also provided other tangible benefits. These benefits include streamlines order flow, decreased purchase errors, decreased overproduction, better inventory management, better receivables management, and heightened communication. These benefits, in most cases, prove to provide a greater ROI than what could’ve been possibly committed before implementation.
Hope this knowledge guides you to make right decisions!!
