Enterprise Resource Planning is a business process management software that businesses adopt which allows businesses to integrate various functions into one system to integrate processes and information across the whole business.
All the processes that are crucial to running a business can be managed through ERP: technology, services, and human resources.
Why does my business need ERP? What are the benefits?
- Security: Keep data safe and regulated
- Competition: Be on top of technology solutions and ahead of competitors
- Collaboration: Centralise data to aid business collaboration
- Productivity: Reduce redundant processes and tasks with automationMobility & Flexibility: Work from anywhere with mobile access
- Efficiency: Streamline all business operations across the business
- Money: Save money by managing processes from one system
- Customer Service: Access customer information quickly and accurately
But according to The 2017 ERP Report 37% of businesses realised less than half of the benefits they expected from ERP deployment.
Four ERP onboarding mistakes companies make
Mistake 1: System – Goal Alignment
Many businesses make the mistake of rushing into an ERP system that isn’t right for their needs.
Vendors can be eager to make sales, therefore skimping on understanding what the business wants and needs from an ERP system. This often leads to businesses buying unsuitable ERP systems.
How to avoid: Focus on your business’s desired outcome, preferably with tangible measures (e.g. reduced order fulfilment time, reduced inventory costs, ability to sell to customers online) and work backwards from there to find the most suitable solution.
Mistake 2: Using a new system to patch poorly performing processes
We have seen businesses insist on customising a new system as a way of avoiding the hard decisions on changing poorly performing processes.
It’s important that you’re not just using an ERP as a crutch for inadequate processes. Don’t strive for a perfect system, be aware that you may need to take a process in a new system that is 80-90% right for your business.
How to avoid: Have the courage to change a high-value process to do the right thing, not just the wrong thing faster.
Mistake 3: Leaving operational staff behind
Leaving your operational staff out of the loop often leads to passive (or even aggressive!) resistance to a new way of doing things.
Make sure you educate and incorporate your team members in the ERP selection process; they’re the ones who will use these systems on a daily basis, so it’s important that they are involved in the process.
How to avoid: Involve the people doing the “real work” in the decision-making process around the evaluation of process and system selection. Their opinions are important because they are the ones who will be dealing with the consequences of any new system. They may also be able to give feedback and ideas from a different perspective.
Mistake 4: Insufficient training and testing
Not enough training, testing and run-throughs of scenarios can be problematic when searching for an Enterprise Resource Planning solution. We cannot emphasise this enough.
One of the most common reasons that ERP implementation fails is that people lack adequate information about a process or technology to adequately test it.
This can lead to delays, and loss of productivity.
How to avoid: Ensure that the operations staff involved in testing have enough opportunity to test systems properly, even if means taking them away from their day-to-day work for a period. It is costlier up front but is cheaper in the long run.
Where is ERP employee adoption most challenging? How can companies encourage ERP use?
From our experience, it’s often with field staff who have been told to use a new technology without being shown how it’s going to make their job easier. It’s no good handing someone a tablet or a smartphone with complicated technology on it without running them through the how and why first.
The key is to step into the shoes of the person doing this task, be it a driller on a rig, someone fulfilling an order in a warehouse or delivering a shipment; try to understand how they do things, then make it easier for them.
What are four keys for better ERP adoption overall among employees?
- Involve operational people in the analysis and selection process for an ERP system. They often have plenty of great insight to how a business runs and can help make an educated decision.
- Don’t try to fix what isn’t broken. Focus on the processes where things could be most improved and go from there.
- Allow more time and budget than you initially think for training and testing.
- Try to reduce the amount of manual work someone has to do. If there is an opportunity for the machines to do the heavy lifting, think very seriously about implementing it.
How should organisations structure their ERP deployment for improved rollout?
We recommend spending most of the time in the process analysis and testing/training phases.
This makes the process longer but the time devoted to improving processes and training people on delivery has a multiplier effect on the efficiency of the business.
What phases should they include for ERP deployment?
This hasn’t changed too much over the years, and we recommend the following major phases for an ERP project.
- Discovery, Process Analysis, and Planning: This is one of two very important phases, as it sets the scene for the whole project. The right amount of time invested in discovering processes and workflows that are in use in the business, which are the most important ones (especially for improvement), and which technologies will help deliver them pays huge dividends down the track. All of this work feeds into the overall deployment plan.
- Design: What will the technology look like when it gets implemented? There will be specific decisions that will need to be taken during this phase that will impact the system build.
- System Build: This where the actual work from the analysis and design phases gets transformed into a working product. Ideally, there is as little customisation to the solution as possible, with the focus being more on configuration; that is, enabling features or fine-tuning built-in features/processes to deliver the desired outcome, rather than writing a bunch of custom code.
- Training and Testing: Once the system build (or at least a very close prototype) has been completed, it’s time to stand it up and let people use it, inputting real data and ensuring that the key features are delivering as expected.This phase is crucial, as it affects employees’ abilities to do their jobs after go-live time and effort must be invested in helping them understand and work in a new system. A final decision on go-live is made at this point.
- Go Live: Once everyone is happy that the solution is working correctly, it’s time to flick the switch and go-live. Final copies of data from the legacy system are imported, and cutover to the new system is scheduled. This can sometimes involve parallel running the old and new together, but the important thing is that there is a hard timeline for the old system to be retired.
- Post Implementation Support: It’s very important that the project team don’t wave goodbye to the end-users once go-live happens. There must be a period of support where staff can ask questions, get help, and make necessary adjustments to the new system.
When employees collaborate, and planning and implementation are well structured, ERP will bring nothing but benefit to your business.
Have you got questions about ERP Consulting? Contact Leap Consulting today!