Six keys to a successful ERP implementation

Before embarking on any enterprise resource planning (ERP) implementation, it is important to allocate time—a period called implementation readiness—to properly prepare for the transformation. Time spent on implementation readiness can help enable successful outcomes and smoother sailing during the transformation itself.

What is ERP implementation readiness?

Once your business has decided on an ERP implementation and ideally selected a specific software vendor or platform, the period of time before implementation starts is vital to the success of the transformation. It’s a time to focus on specific activities while there’s a lot of momentum for the implementation, stakeholders are engaged, and the energy in an organization is high.

Why is it important?

The bottom line is that activities performed during implementation readiness can lead to better program outcomes and more successful transformations. A well-thought-out implementation readiness phase can deliver compelling benefits such as:

Engaging critical stakeholders early
Use the time to create awareness of the program, its objectives, and the ways it will make the future brighter. The activities during this period will help create a groundswell for the transformation that is needed to help ensure success.

Optimizing use of resources
Once you’ve identified the key people needed for the implementation, this early phase is an opportunity to engage them not only for the required activities, but also to get their ideas and insights. It’s a time to build additional momentum and have those resources tackle value-added activities that can be completed ahead of when the implementation officially starts.

Establishing guiding principles
The guiding principles will help bring clarity during the project execution. They can help align the organization with the vision and define the boundaries under which the program will operate, decisions will be made, scope will be managed, and what outcomes will be delivered.

The principles will be invoked throughout the implementation lifecycle to facilitate alignment on scope and design decisions. They are an arbitration tool for the program and can facilitate decision making.  

Evaluating, planning and addressing challenges
The most important reason for tackling implementation readiness activities is to get a handle on some of the complex items early on—complexities that can derail the program once the implementation starts, e.g., interface strategy, data model design, etc. Now is the time to define challenges to the transformation and set them up as opportunities for success.  

Here’s what to consider from the start

With the importance of these readiness activities established, here are six measures that can be put into place early in the journey to help generate better outcomes.

1. Vision
   The importance of an organization’s vision is often bandied about, but in the case of an ERP, it is essential to success. Now is the time to develop a vision that states not only where you want your organization to be in the future but is also clear about the outcomes you want enabled and delivered at the conclusion of the transformation. The vision must have buy-in from leadership so that they will continue to support and champion the cause throughout the project.
2. Governance structure
   This is not an instance where one size fits all. Organization leaders must consider their business circumstances when developing a structure to deliver the program and the transformational outcomes for the future. The structure should factor in the type and scope of the implementation, the complexity of the solution, the number of stakeholder groups involved, organizational culture, and how the governance structure looks post-journey. Is it the same as it is now at the onset of the transformation or is it going to evolve with the organization?
3. Resources
   The tendency when going through an ERP transformation may be to leave experienced resources in place in their business-as-usual roles so that operations are disrupted as little as possible. Rethink this idea. It’s important to have the right people with the right skills and experiences in lead roles during the program. You want professionals who have institutional knowledge and are familiar with the challenges that need to be addressed to take the lead and be part of the delivery team. Backfill other roles to free up the human resources to drive success.
   
   Human resources are only half the equation. Before beginning, ensure you have the financial resources to complete a program and the value and the return on investment story around the benefits is clear. It seems obvious but is an important step.
4. Process improvement opportunities
   As a program ramps up, the momentum and enthusiasm in an organization can make people eager to get started. Resist the pull of beginning before specific improvement opportunities at a process or capability level are clearly defined in order to avoid a disproportionate amount of time being spent on designing or addressing processes or opportunities that won’t move the needle.
   
   For example, you may have an issue with reconciliations and focus on creating a new reconciliation process to address the issues, when, in fact, the issues begin with upstream processes that need to be addressed first. Consider process areas that will deliver the biggest bang for the buck.
5. Scope clarity
   Scope clarity goes hand in hand with process improvement opportunities. Defining the project scope early will ensure that process improvement opportunities and other activities align with the project remit.
6. Defined data strategy
   Before beginning the project, you must consider the information needs of an organization and how those needs impact the data model design, data integration, strategy, and data flow. These are key areas that can create impediments, inefficiencies, and risks on implementation programs. But, they can all be addressed in an organized manner, which is what the implementation readiness phase is all about.
   
   Keep in mind, if the early work is done, implementations run smoother, happen faster, and often end up being less expensive. Although pressure will be on to move quickly, a slower start at the front could end up in a stronger, swifter finish.

Check out the second post on this subject, where we’ll actually detail some specific types of implementation readiness activities and how to get after them.

Authors

Fahad Salah-Ud-Din
Senior Manager
Deloitte Consulting LLP

Shiva Kumar Shivashankar
Senior Manager
Deloitte Consulting LLP