ERP Implementation – Best Practice Adopted By Organizations
ERP implementation is an uphill task involving huge monetary investment and time. Success and failure of ERP implementation rests on the best practices adopted by the organizations. Many organizations go for ERP implementation without much planning and cases of failure with ERP are not rare. Intelligent planning is essential for successful ERP implementation to squeeze out the maximum return on investment. Selection of the right ERP software may give you high returns while a wrong selection may prove to be disastrous. Return on investment may not fall in line with the expectations as lots of factors are associated with its implementation and usage. The best practices of ERP implementation can be summarized as:
Define goals and requirements: The organization should sort out the requirements and define the goals accordingly before going for ERP implementation. Set feasible targets according to the capability and remain focused on them while selecting ERP software. ERP software offers varied features and benefits, but one should be very specific while selecting it. Analysis of the vendor’s capabilities is essential, and proper communication should be maintained to keep the vendor aware of the minutest details of transactions carried out in the organization.
Devote time in planning: Allocate at least 4-5 months for effective planning before ERP implementation. Careful planning will help in budgetary allocation as per the organizational requirements. Enough time must be provided to test the new business processes, customization and security features of the ERP system. Proper testing will help to analyze the future returns of the implemented ERP system.
Identifying critical business processes: The organization should identify the critical business processes and make sure that these processes provided by the vendor function with extreme precision. The ERP should be able to analyze the business processes properly and decide the priority. It should be flexible in adopting new technologies and strategies instead of sticking to the old ones.
Aim in getting good ROI: The implemented ERP system should provide good return on investment. Analyze the key cost areas including cost of implementation and other hidden costs. Keep a track on the post implementation performance to achieve an appreciable ROI.
Training the in house staff: Proper training should be provided to the in house staff, as ROI depends a lot on the users. If required, consultants from outside should be hired to train them about the proper usage of the software.
Distribution of resources: Proper distribution of resources among the staff members and project team is important for successful ERP implementation. An efficient project manager should head the team and guide through various stages of implementation.
Forming risk management team: The responsibility of the team is to find out any flaws in the planning and eliminate them timely. The team should maintain a counter plan in case any problem crops up during the implementation process.
Data Migration: This is the most crucial phase of ERP implementation. Sorting out the relevant data discarding the irrelevant ones should be done carefully, while migrating data into the new system.