Enterprise resource planning (ERP) software is a gold standard for businesses. Since the late 90s, companies revised their approach to process automation and back-office management, and ERP systems have been drivers of this major shift.
ERP software ensures seamless connectivity and data flow within the organization – a recipe for efficient communication and collaboration. However, the implementation of ERP systems is a long-term task and will probably require a lot of focus and involvement of every employee.
So, how should you approach this question to implement the ERP software successfully? In this article, we describe the main points you should consider.
Why Implement ERP System?
With an ERP system, your business will take a completely different turn in operations and processes. Here are a few examples of the real value that ERP implementation can bring to your company.
Total visibility and data availability
This advantage is the basis we need to start with because it essentially powers the rest of the benefits of every ERP system. This software usually works as one universal system among the whole company and its departments. So, instead of having different databases for finance, sales, supply chain, etc., the enterprise utilizes a single application for the whole company.
This way, the data is stored in one place. It is organized and thus available at any moment for employees and management. Moreover, it eliminates the need for paperwork and transfers the document flow into the digital medium, increasing the speed and reducing room for human errors.
Integrations with other cutting-edge technologies can even automate the data flow: for example, IoT sensors can automatically collect data on production performance or inventory movements and store them in ERP. The diversity of data will expand and give you a better view of the current business processes, and you won’t need to involve employees in such mundane tasks as data entry.
This point logically follows the previous one. Different departments become connected through the means of the ERP system, and you have a real chance to break so-called data silos and facilitate constant inner communication.
Usually, while each department uses its own software, the idea of collaboration may look unappealing to the employees. You are most likely to send emails, ask for necessary data, wait until your colleague finds time to get down to your request, and so on. It’s so cumbersome, so why bother? And due to this complex flow, the company itself loses a lot, as, without the complete picture, employees won’t be able to make proactive, efficient decisions.
However, ERP implementation will give free access to data across the whole company and create new opportunities for departments to maximize the value of their efforts.
Improved customer services
ERP systems are extremely beneficial for your back-office, but the end-point customers will also receive their share of improvements.
The software can increase customer satisfaction due to these features:
- inventory management tracking: it’s a real pain for customers when the sales reps can’t provide them with relevant information about the availability of the products or the status of their order here and now; the issue is that the sales department may not have access to this data itself, and here is where ERP comes in handy;
- quicker delivery: again, seamless exchange of the info between sales, billing, and supply chain speeds up the actual delivery and makes customers happier;
- customer relationship management: ERP systems usually include CRM features, hence, the sales team can improve the relationship with each customer using an automated approach, making him or her an enthusiastic brand advocate;
- e-commerce integrations: it’s possible to integrate your website or platform with ERP and streamline online orders as well; as result, you will improve communication with clients online, automatically record and proceed with their orders and get a better insight into the buying habits of your target audience on the Internet.
IT costs optimization
We won’t sugarcoat it: ERP implementation project is a costly investment. However, your final costs will be totally paid off and even multiplied significantly through the improved operations. But it also helps to cut spending, especially in the IT department.
First, you will need to support one piece of software instead of dozens of other applications for accounting, billing, marketing, etc. It may decrease the budget greatly. If you use ready-made solutions on a subscription basis instead of paying several bills, you will need to cover one. If your software is custom developed, the maintenance will be quicker and cost less as well.
Second, any software is futile and unprofitable if no one uses it. The learning curve is also a challenge: if employees don’t have a positive attitude towards the app, they won’t use it. So, what is really easier to learn and use — one application or a bunch of different ones? So here goes another point to ERP software implementation.
Precise adherence to compliance
Compliance brings a lot of pressure to companies. Keeping financial records up-to-date and ensuring private data security is challenging and demands much attention and responsibility from employees. But ERP can help here with its ability to organize, validate and check data.
New approaches to planning
Planning plays a significant role, and it is possible that your team may regularly encounter estimations and forecasts that don’t reflect reality. Often, it is caused by the inadequacy of historical and real-time data or its analysis.
ERP system, as we already discussed, is a perfect tool to improve data management. Thorough reports may help your team adjust their plans more rationally and base their forecasts on real data instead of doing clueless guesswork. You can go even further and implement predictive analytics in your ERP system, and make smart algorithms in charge of your forecasts.
When your enterprise is growing, whether by new product launch, staff extension, or onboarding new suppliers, your infrastructure should be ready to accommodate such changes. In the modern world, it means that your software must be able to handle new requests as well.
Luckily, ERP systems in their core can be designed to be variable and reflect any alterations you need to add. But it’s more likely to get a flexible ERP application through custom software development. It can be tailored to your business, and have important features (for example, an ERP module for a manufacturing business will need special functionality to plan and track production lines).
A software development vendor like GBKSOFT can provide you with flexible ERP software, and eliminate difficulties of implementation like customization from the beginning.
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Main Risks of ERP Implementation
Implementing a new ERP system is a long-term project, and it includes more than the IT part and the involvement of a software vendor. This process demands drastic changes inside the company, which probably will bring a lot of pressure.
However, if you think through the possible scenarios, you can get prepared and handle difficulties easily. So, we suggest you read the list of the most common risks associated with the ERP implementation process.
Poor project management
The idea of a successful ERP implementation is to approach the task seriously. This type of software affects your company globally, so it is unrealistic for it to be easy and quick. ERP implementation consists of several phases that are typical for the project cycle.
And that’s no wonder because the best result you will get is if you perceive it as a separate, large project. Thereafter, it needs an assigned project manager on your side who will dedicate his or her attention to this task.
The actual ERP implementation can’t fall to the responsibilities of IT departments. It needs good people management, facilitation, and collaboration skills, but it doesn’t mean that the project team shouldn’t cooperate with the development specialists — on the contrary, it’s extremely important as well.
Change management and end-user training
As we mentioned, ERP implementations require some level of adjustment from the whole company. Adequate change management will prepare employees for new processes and policies that are more likely to arise along with a new ERP solution.
Your employees will probably be less than enthusiastic about the new software. It’s in our nature to stick to familiar things, and even the best specialists can follow the philosophy of “why bother fixing something that isn’t broken?”. That’s why the introduction and ERP integration of new technologies should be controlled and guided, as well as user training.
Educate your employee about the changes that ERP implementation brings to the company, to their department, and their individual responsibilities. Explain why it’s important at this moment and what benefits this shift will bring.
Whatever new ERP you choose, data will be always its cornerstone. So, during the ERP implementation process, data migration will play no less role than the software itself. However, it will also bring a lot of challenges, especially if it is your first try to organize and manage your databases.
Corrupted or rogue data may neutralize the whole beneficial performance of an ERP system, making it useless. Do not let your efforts be in vain and assign a sufficient amount of time, sufficient time, and resources for data cleaning and migration. Avoid duplicates, fight inaccuracies and get rid of outdated and redundant data without any hesitation.
Wrong ERP software
It’s also a plausible scenario: you might decide on an ERP system that won’t match your project objectives and encounter a lot of difficulties with adoption and customization, and in the end, you won’t reach the result you were aiming for.
You may find yourself in this situation when choosing between ready-made solutions. The market is full of such solutions, and you’ve definitely heard that Oracle, Microsoft, or SAP are the main enterprise resource planning providers.
On the other hand, here is the catch with the ready-made ERP solutions. Firstly, such software will demand more adjustment from your side: basically, the majority of your processes will need changes to match the functionality granted by ERP. Secondly, apart from paying for a subscription, you will need to involve a third-party company to set the ERP up for your business.
On the other hand, GBKSOFT offers you another approach. Instead of making you adjust, we will go another way. Our business analytics team will run 360-degree research on your business processes, objectives, and challenges, and use this data to create a concept of a custom application just for your enterprise.
As a result, you will get an ERP system that is easy to implement and use, won’t need additional customization, and will be more understandable for the employees.
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Main Steps of ERP Implementation Process
Let’s talk about the main ERP implementation steps. What steps does the ERP implementation life cycle include? Here is a short and clear ERP implementation checklist from our project management team.
The first and the most obvious step after you decided to implement an ERP project and assembled an implementation team is to find a perfect piece of software. But for the custom ERP solution, your goal is actually to find a reliable software team that can cover your need for development.
While looking for an ERP implementation partner, you need to check the following factors:
- whether a company has experience in the field of business intelligence (for example, we have several major projects in this domain, like Leo or HRD Print; we also specialize in ERP development for real estate, manufacturing, etc.);
- the feedback on the company on Clutch, GoodFirms, and similar directories;
- how the company approaches the development: how thorough are their preliminary stages, or how do they communicate with the clients?
Establishing a strong partnership will only facilitate the ERP implementation and guarantee the success of your project, as the software vendor will completely focus on your cooperation and attend to the needs of your business.
This is the step with the most extended timeline in your ERP implementation plan. The software vendor will take time to study how your business operates, discuss major aspects with you, and run a Discovery Stage as we do. The next steps include:
- specification creation;
- front-end and back-end development;
- testing and debugging.
We follow the Agile approach, which means that we develop the application feature by feature instead of starting with designing the whole project, then doing the whole development, etc. Agile and Scrum allow us to be flexible and test the application even before it’s fully deployed.
It’s one of the most important steps of the way of your ERP implementation. We already established that the quality of data will determine the performance of the software. So, we suggest you review all the data you’ve already collected and sort it into the next categories:
- master data, or the core data of your company and business processes;
- historical data, or the information which is more than two years old;
- current data, or the latest information you obtained.
Determine what data is the priority and essential to transfer, what legacy data you don’t need anymore, and establish access levels.
There is a frequent fear: what if our data is lost during the shift to ERP? Don’t worry, we can help you run efficient data migration and ensure that all data is saved and successfully stored in your new ERP system.
It’s the moment you’ve been waiting for. The ERP is developed and tested, it has necessary data, and it’s ready for use. Nevertheless, it’s also a crucial moment to ensure the positive feedback of your employees.
You can approach the deployment in a few ways.
- You may transfer everyone immediately to the new system and close up the legacy applications. It’s fast, it’s easier to manage, but it may undermine the productivity of your team, as everyone will need time to adjust. Also, the big amount of simultaneous requests may cause technical issues, especially if your ERP wasn’t designed to handle that.
- You may introduce ERP steadily, going from one department to another. This way, it would not disrupt the whole workflow so harshly, but it will definitely take more time.
- You may leave legacy systems for some period and initiate ERP implementation as well. This way, you ensure backup in case of difficulties, but it also requires your employees to duplicate their work.
How to Implement an ERP System?
So, ERP ]implementation may look cumbersome and challenging, but the truth is that it’s not as scary as you can see. With the right attitude and sufficient preparation, you will be able to go smoothly through the process of ERP implementation. Your company will get better productivity, higher customer retention and satisfaction, and a powerful, organized database in the long run. Altogether, it will lead you to growth in revenue and opportunities.
We analyzed our experience with ERP development projects and found a few valuable insights for those who are only starting the implementation of ERP system.
Don’t neglect Discovery Stage
Implementing ERP software is a global project that will affect every department. Your ERP should reflect your processes, relations between departments, and the specifics of your services, production, or supply chain.
So, a decent implementation team will need to study your business before diving into the actual development. We always vouch for the discovery stage, but for ERP projects it is a necessity.
The discovery stage is a set of preliminary research our team uses to create a clear vision of your future application. We discuss what goal you want to reach and what problems to solve, how your business operates. Using this information, our team of business analysts, project coordinators, solution architects, and designers will create a package of documents that will drive the development. Usually, it includes:
- product vision;
- business processes flowcharts;
- functional and non-functional requirement;
- description of architecture and technology stack;
- risk evaluation;
- project roadmap & budget;
- description of ERP project team structure;
- wireframe for user flow;
- and more.
At the end of this stage, all the parties will understand what product we are building, how it should work, and how we will get there. It guarantees seamless development, but it will give you added value as well. At this stage, you can initiate the preparation for ERP adoption and prepare your employees, data, and processes.
Engage employees from the start
We highlighted the role of employees in ERP implementation, as they are the end-point users of the software. So, why not involve them in the decision-making during the development? This way, the initial doubts will disappear quicker, and the feedback from actual future users will polish the application.
How can this work? One of our clients assembled a team of employees who will definitely use the new ERP system constantly. They all have different responsibilities in the company and cover all possible scenarios that may arise. Whenever there is a need to review or test the latest features we developed, this team checks them and gives realistic feedback.
Software lifecycle doesn’t end with deployment. Sometimes, maintenance looks like something you will need after a long time, so why bother now?
But it is a false impression: such a large and significant software piece as ERP needs strong maintenance to stay efficient. There is always a chance that something will go wrong with the software. It might break down, or you will need to speed it up or maybe even make some minor changes.
So, our partnership may go beyond the development and include maintenance packages as well: our team will be able to support your ERP easily, as we will already be familiar with the application and tech stack.
How Much Does ERP Implementation Cost?
Our team, being an experienced ERP vendor, prepared a rough estimation of the web ERP development. The final price will vary, depending on your business requirements, needs and goals. Let’s contemplate what project team you need.
|Team member||Type of employment|
|Total duration||6 months + depending on the ERP size|
|Avg team cost||$50,000/month|
Overall is significant, but it will be paid off because of the benefits that ERP implementation brings to your company. Let’s also compare it to the ready-made solution.
SAP Business One ERP, one of the most used ERP products will cost you around $94 for a single user per month for the maximum functional package. It requires a yearly commitment, so if your company employs around 100 people, you will pay around $100k USD per year. So, either way, you will need to invest a lot into a new ERP system. But with custom development, you will get a more convenient, functional application you have full control over.
How Long Does It Take to Implement an ERP system?
The timeline of the ERP system implementation process may vary a lot. Basically, it depends on the difficulty of the system, the specifics of your industry, the difficulty of the processes that ERP should reflect, etc.
The basics version of ERP might be developed within 6 months. It can be upgraded and improved further, and the time required for that will be determined by the scope of features you will decide to add or redesign.
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ERP implementation is an important step for every company that aims for growth and development. It is also a great opportunity to gather all stakeholders and review your internal operations and policies.
ERP system also becomes a basis for further innovations and digital transformations. For example, artificial intelligence, the main driver of valuable insights and predictive approaches, can show its full potential only when there is enough accurate data to make any conclusions. And ERP software, at its core, is created to manage and provide data.
So, it’s time to bring a new ERP to your company, and GBKSOFT will be glad to facilitate this change!
It’s a process of ERP adoption and integration in the company. Usually, every department (sales, production, supply chain, accounting, etc.) switches from their legacy applications to the unified ERP and uses it as the main software.
You need a lot of preparation to run a successful ERP implementation. Usually, it fails due to wrong software that doesn’t match the operations inside the company or because employees are reluctant to adapt to a new system.
The ERP implementation lifecycle includes the next stages: development, testing, data migration, deployment, and maintenance.