Considerations Necessary for Quality ERP Implementation
The topic of Enterprise Resource Planning (ERP) is a timely one for my company, Dillon Gage Metals, as we are completely immersed in the final stages of implementing a total replacement of ours. It’s meant some long hours and diligent oversight, but we’re almost to the finish line and I feel qualified to provide my opinion as helpful advice for other organizations who may be looking into new ERP solutions.
Defined, ERP is about the integration of all key touch points of a business including, but not limited to, sales processes, inventory, purchasing, demand forecasting, accounting, finance and even human resources. An ERP solution is designed to be as flexible as possible, and it’s actually easier than you’d think to find an industry-specific version for how your company operates.
But to cut to the chase, what does the implementation of an ERP system actually accomplish?
Done correctly, the software associated with the ERP implementation is designed to tie together all of the significant existing processes necessary to run your business as efficiently as possible. Think inventory, management of ordering/shipping and how they interact with your customer relationship management (CRM) system. These may have functioned as previous “islands” but are now interconnected in one efficient “archipelago.” And the archipelago is driven by a centralized data store that supports all of your business functions.
With a multitude of highly enticing ERP software solution options, don’t always select the one with all the bells & whistles,
So, what considerations are necessary to navigate through a quality ERP experience? Here are five key takeaways we discovered along the way:
• A change of this magnitude will go nowhere fast without the support of the company’s upper management. The shortcomings of the old way of doing business versus what the new ERP can and will provide must be roundly understood and supported by the C-Suite governance of your organization. Employees need buy-in and without it, productivity gets placed at risk, or worse, the entire project is undermined by employees who don’t feel the need to change. From an IT perspective the ‘installation’ of the technology is really the easy part. An ERP implementation is more about enterprise change management than anything else.
• The ERP solution must be the right fit for your company in terms of its industry, marketplace and size. With a multitude of highly enticing ERP software solution options, don’t always select the one with all the bells & whistles. Get something that is sturdily designed with the tools and features necessary to meet your specific requirements. Also ensure that you are not fitting the ERP to what you do today. Ensure that you understand the enterprise plans for the next 5–10 years and ensure you select an ERP with ‘growing room’. What may not be an important aspect currently becomes costly to implement in the future if not planned for today.
• As mentioned earlier, this is an exercise in enterprise change management, but to create real change you have to understand what you do today.Document your current processes; work with all departments to begin bridging the ‘islands’ of process into a streamlined set of ‘requirements’. You will be touching every aspect of your business, so if you are going to have change of that magnitude, don’t just ‘rip & replace’, reengineer.
• Communication. Create an interactive team that is constantly providing feedback about the processes and collaborating in a meaningful way to continue to optimize the process. Ensure that the team members are then communicating with their departments about the changes. For many, change is difficult and scary. Nothing feeds this fear more than rumor and speculation. Keep the communication open with the rest of the organization and show them progress along the way so they don’t become the ‘victim’ of the implementation but a part of it.
• Be prepared for training time and leverage department team members to do that training. When all is done, this needs to be the business users’ system, not IT’s. The implementation team members’ role is to vet the processes and prove the results. Ensure they are running all of the transactions that they normally process, proving the results and developing training documentation along the way. When it comes time to train their departments, they should be the one doing the training. This positions them as the ‘go-to’ person for the process and use of the system. Your IT support department isn’t going to understand the context of many of the user questions, but a department leader will (or should).
If approached correctly, the implementation of an ERP should streamline your organization’s processes from the top down. It does this through the elimination of repetitive processes and by ‘connecting the dots’ between disparate processeswhile making data collection, analytics and reporting much easier and more efficient.
For a service-oriented company like Dillon Gage Metals, the ERP transition is set to further improve our customer service. We buy, sell, trade, refine and store precious metals on an international stage, and it will now be easier for us to provide a higher level of quality customer service through real-time notifications and global planning. The new system allows our staff faster access to customer information and history. Considering that spot prices on precious metals are constantly updated, this will become a crucial benefit to our business model.
The implementation of our new ERP solution has been a big challenge but an honor to see through. If you’re considering undertaking an ERP project, I hope my advice has been helpful.