The choice to implement an Enterprise Resource Planning (ERP) system like NetSuite is a major step for any organization. While the system will ultimately increase productivity and efficiency through features such as automation and centralised data storage, the implementation process is a massive project that will have a broad impact on the whole company.

Below follows a list of key practices that will help you tackle the complexities and potential challenges of ERP implementation in order to ensure a smooth process.

1. Have solid project management in place

The ERP implementation process usually spans several months. We at Staria divide the process into following phases: initiate project, analyze and design, configure, develop and validate, deploy, optimize and close project. Each phase of the process has its own tasks and potential challenges. For a smooth process, you have to:

  • Set realistic expectations, time frames and milestones
  • Align the ERP initiative with your business needs
  • Make sure the project is proceeding according to plan
  • Get input from key stakeholders

It is important to ensure participation from all the groups within the organization that will be using the system. This may prove challenging as people will have to invest time in the implementation in addition to handling their usual tasks and responsibilities.

As the project progresses, ideas may arise about adding more features and more functionality than originally planned. This is referred to as “scope creep” and can derail the project and make it difficult to complete on time and according to budget. With a strong project management in place, any additional features can be identified as either critical or non-critical and able to be postponed.

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2. Appoint a strong project team

Solid project management would not be possible without a strong project team. Usually, this team consists of an executive sponsor, a project manager, and representatives of the different business groups involved in the implementation.

The executive sponsor should stay on top of the business priorities and bring in extra resources if needed. It is important to have the sponsor involved in the project to enable fast decisions when needed and to secure that the project has backing and understanding from management. Because implementing an ERP system is a massive and complex process, it is important that the project manager is experienced and able to establish relevant goals, requirements and KPIs, along with leading the project day-to-day.  For companies lacking this expertise in-house it may be a wise choice to enlist the help of an external consultant.

As for the business groups representatives, it is important that its members are respected by their colleagues as well as knowledgeable. They will have to listen to and mediate between several different groups in the organization, as well as make decisions about mid-project changes based on feedback from these groups.

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3. Set clear requirements and KPIs

Setting requirements to be met is an important part of any ERP implementation process. These requirements should align with your business goals. To identify relevant requirements, take a look at the current key business processes, systems, and workflows. What do you want to accomplish, and how can each process be improved? Implementing an ERP system should not only be about automating existing processes; it should be viewed as an opportunity to improve each process. Examples of requirements could be to achieve real-time reporting, to cut financial close time in half, or to automate a specific process.

After setting clear requirements, it is possible to identify relevant KPIs. These are the specific targets against which you can measure if the implementation process is a success.

4. Prioritize the transfer of your data

One of the key benefits of an ERP system is that all the organization’s data is stored in one and the same place. But this requires transferring all the data from the organization’s old (often multiple) systems into the new one during the implementation. This may prove difficult as the data may be spread over many different places across the organization. There are risks of ending up with lost, inaccurate, or duplicate data, which causes further challenges when the system goes live. For these reasons, it is vital to prioritize the transfer of data.

The transfer of data can be handled in one of two ways: manually or through automated tools. Transferring the data manually gives an opportunity for clean-up – old and obsolete data can be deleted, along with duplicate information. Inaccurate data and inconsistencies can be spotted and corrected. On the other hand, using automated tools can save time. Regardless of method, it is important to validate the data before going live to confirm that it was transferred correctly.

Make sure that everyone in the organization understands how important the transfer of data between the systems is and assign clear responsibilities on who will transfer what data and how.

5. Keep the costs in check

ERP projects are infamous for going past the budget. A common reason for this is that the organization underestimates the amount of time and work the project requires, and therefore ends up spending more money than originally planned. When internal personnel resources run out, the organization might have to turn to external consultants, which is expensive. Another reason for cost overruns is the above-mentioned “scope creep”, where the business wants to add features that weren’t in the original plan and naturally leads to more costs that weren’t budgeted for.

Setting up a clear and realistic plan and budget (with extra room for unforeseen problems and minor cost overruns) and checking in regularly during the project to make sure that the plan is in fact being followed will minimize the risks for major cost overruns and expensive deviations from the project.

6. Invest in communication and change management

When undertaking an ERP implementation, it is crucial to include all stakeholders in the organization and communicate:

  • Why an ERP system is being implemented
  • What the new system will do
  • What benefits the new system will bring
  • What to expect during the implementation project

Getting everyone onboard with the change is key to a successful process. The CEO and leadership team must invest time in communicating the importance of the project to the rest of the organization and show their support for the changes to come. Since the implementation of a new system will change current business processes it will lead to a change in day-to-day work. This may present challenges if employees are not onboard with the change. Therefore, communicating the features and benefits of the new system to everyone in the organization, especially the end users, is crucial to succeed.

It is also important to consider that changing systems may affect business partners, members of the supply chain, and customers. Keep these parties informed of the changes and how they might be affected.

7. Offer training

To be able to use a new system, and most importantly, to be able to gain all the benefits from its features, most people will require training. Offer targeted training that matches the needs of different roles and groups in the organization to let employees become proficient in the system. This may also help them accept the new system if they were initially skeptical to it. Customized content will help employees learn the features that are relevant for their jobs, and hands-on training will teach them how to work the system in practice. Another approach is to select some individuals early on and teach them how to use the system, so they can act as mentors for their colleagues when the time comes for everyone to learn.

8. Remember the post-implementation work

When implementing a new business system, the work does not end at the go-live date. As companies tend to use ERP systems for decades once implemented, naturally there will be a need to perform regular check-ups, fix issues that arise, and evolve the system to support new needs of the organization.

After going live, make sure there is technical support available, and monitor for potential problems that arise. If many people make the same error, or have the same question, this indicates an issue that needs to be addressed either system-wise or through training. Continue to gather user feedback in order to identify problems and get ideas for future improvements.

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Jimmy Lofstrom

Jimmy Löfström
International Growth Director
jimmy.lofstrom@staria.com
Tel: +46 73 376 5545

Jimmy Löfström