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How to implement an ERP successfully?

A successful ERP implementation can revolutionize any business and train it to harness 2.0 technologies. With the introduction of Web service, partner and customer collaboration, ERP can extend an enterprise and seriously boost its bottom line. From the company’s standpoint, it is essential to understand whether one can handle a major undertaking like an ERP implementation first.

A Management’s Task

Companies have spent fortunes in the past on ERP software and its implementation through the ranks, only to find that business performance has not improved at all.  When ERP system implementations fail to deliver, it’s usually because senior managements have not taken the time to get involved personally and drive the organization to accept the ERP as a way in which to run the business.

Defining a goal becomes a top priority for any top level executive. You need to implement one thing at a time, say for example, if you have taken a decision to implement payroll by the end of the month, then your goal should be the completion of the payroll model within this time.

Pre-implementation preparation activities should be done efficiently. In this instance, senior management needs to participate in reviews conducted fortnightly. Regular review measures ensure that the focus stays on implementing targeted practices specifically. The CEO of the company will have to allocate time for monitoring the ERP system implementation. This may mean some extra load, but it will also mean that the implementation is a complete success.

This task does not stop at an authorization for expenditure. Project sponsorship needs to be mentored by the highest levels of the organization. The project executive or the steering committee should be comprised of a key executive from each major business function. Representing different verticals at the time of allocating resources ensures that the implementation is conducted uniformly throughout the organization.

Senior management needs to be project champions as well as active participants in the demanding task of defining the business requirements which the new system must meet. There is often a tendency for managers to skip meetings in which the implementation team defines business requirements.

Bringing in a Mindset

When you start the implementation, it is important to communicate that ‘Reduction of Employee Strength’ is not the Goal of the ERP implementation. This is because people in the company feel that their jobs are threatened if the ERP is implemented. On the contrary, the goal is to do everything more efficiently. They need to understand how the ERP implementation is a part of your business strategy and how it will help you do more business and run the company at higher profits.

People in the organization should be well prepared to accept and operate in the new system. The right working team is the key factor in successful implementation of an ERP system. The team should be comprised of experienced, business experts who can effectively leverage the ERP software investment.

They also need to ensure that the entire support infrastructure needed to implement the ERP is in place. Vendors often find themselves in a situation when they arrive but find that the equipment is not in place. Though you might not need all the hardware at the start of the implementation but you must consult the vendor on what is required to kick start the implementation.

Judging an ERP by its Implementation

Selecting and implementing a new ERP system and the process changes that go with it, is unquestionably a complex undertaking regardless of the size and resources of the organization. This is certainly a reason why ERP implementation is something that should never be approached without a great deal of careful planning.

The success of an ERP implementation should be judged on the basis of its capability to deliver output when, where and in the form that its users need. Often, critical output management issues are overlooked when companies plan and implement ERP applications. The key output issues that need to be addressed are:

  • Output Realization
  • Productivity
  • Efficiency
  • Customization
  • Control

ERP output management begins with a thorough analysis of output needs and an evaluation of current output devices, followed by a detailed recommendation for the output management infrastructure and architecture.

About the Author

Amit Khatter is General Manager – International Business with ESS. He holds an MBA degree as well as an Engineering degree from a premier institute in India. He heads the Africa business operations in ESS including Marketing, Business Development, Channel Development and Project Implementations.