ERP Implementation Plan: 10 Key Phases & Best Practices

Enterprise Resource Planning (ERP) software is one of the most complex software systems within an enterprise organization, but also one of the most valuable.

Successful ERP deployments bring together a suite of integrated applications that allow organizations to streamline and automate processes, providing a single source of truth across the business.

However, the ERP implementation process is fraught with potential pitfalls, including poor data migration and a lack of training for end-users. Successfully implementing ERP systems, therefore, requires alignment, rigorous planning, and cross-functional collaboration.

In this article, we provide an overview of how organizations can apply a clear methodology to the ERP implementation planning process to successfully mitigate the major risks associated with large-scale software implementations.

What is an ERP Implementation?

An ERP system brings together discrete systems and information from across a business. This could be anything from staff availability via HR records, to customer data held within the CRM.

ERP software implementation describes the end-to-end process of gathering business requirements, selecting the right software platform, configuring the integrations, migrating legacy data, and finally deploying the new ERP system.

Alongside ensuring the technical aspects of the system are implemented correctly, the ERP implementation process also focuses on successful change management by ensuring that user needs are considered at each stage and that all users are trained in how to use the system.

The implementation doesn’t end however once the system is live. As with all software platforms, ERP systems require regular updates and maintenance to ensure they function at peak performance.

Why is an ERP Implementation Plan Important?

In an Enterprise, at any given point multiple business functions are making decisions that affect the organization. ERP helps to manage all the business units and functions from a centralized location.  

ERP acts as a repository of information and acts as a single source of truth for the organization. It makes the life of decision-makers easy and allows departmental Managers to trust the data to make crucial calls for the business. 

Here are five reasons why ERP implementation is important for your organization 

• Seamless collaboration– Different departments use different systems which increases the chance of duplicate information. However, if ERP is implemented it eliminates the probability of duplication and provides centralized information throughout the organization. No department has to wait for another to receive data and can get started with their work. It reduces dependency, increases transparency, and promotes collaboration. 
• Enhanced employee performance– Employees are hired to do their work and accomplish their tasks. But to ensure process compliance and data integrity they are expected to do the admin tasks. It impacts their performance as most of their time goes into tedious admin tasks. It destroys employee morale and prevents them from doing their job. The right ERP solution can help you to automate repetitive tasks and enable the employees to accomplish their tasks in a shorter time. 
• Improved tracking capacity- ERP systems are crucial for many industries, especially for the retail and supply chain industries. These industries have to manage resources, transport the finished goods, and manage their demand till it reaches their customers. Having a bird-eye view throughout the organization helps the leaders to identify problems beforehand and tackle them before it becomes a roadblock. Modern ERP systems come with active tracking systems, which eliminate speculation and provide current status to the relevant stakeholders.  
• Detailed analytics- Since ERP is a central database it has reporting capabilities too. It records every action of the users and helps business leaders to take calls that can improve business functionality.Without an ERP, creating reports might take a few days to weeks. What organizations might miss in real-time monitoring can be mapped in historical reports. From finance to inventory management an organization can create reports for any business function and delve deep to get a better understanding. 
• Boost ROI- Organizations who are implementing ERP for the first time might consider that it could burn a hole in their pocket. But once the organization is past the astonishment phase they will find the value in their ERP investments. ERP integrates all the important applications in an organization. Rather than juggling between multiple applications for information, employees can access ERP for a single source of truth. This improves ROI as employees can just access one application which reduces training, save time, and gives them better visibility. 

ERP Implementation Failure Rate

According to Mckinsey, 75% of all ERP projects fail to meet their goals with 74% taking longer than expected. An ERP project is not just a technical change but a cultural one too. ERP failures can disrupt the whole organization and in some cases, the results could be catastrophic.  

A famous failed ERP implementation example came in 2019 when vehicle management company Leaseplan abandoned its migration to an SAP-based ERP system after numerous project delays and change management challenges. This caused the business to write off $100 million in project costs and completely start again from scratch.  

The catastrophic failure of the project was attributed to poor planning which caused the company to develop software that would “not be fit for purpose in the emerging digital world in which [it] operated.” 

In a survey conducted by Deloitte, it was identified that there are 10 barriers to ERP implementation. Out of all these barriers, the major cause of concern is resistance to change, inadequate sponsorship, unrealistic expectations, and poor project management. 

It’s fair to say that the importance of a clearly defined plan in the ERP implementation process can not be understated. The scale of most ERP implementations means that even minute misalignments can cascade into huge headaches, ultimately risking the success of the project. 

Organizations must create a plan to overcome these barriers and streamline their ERP implementation process. 

Bonus resource: 9 High-Profile ERP Implementation Failures

Key Phases in a Successful ERP Implementation Plan

A typical ERP implementation plan can be divided into ten key phases that cover the entire ERP software implementation lifecycle, from concept right through to deploying and supporting the live system and its users.

Following these ERP implementation steps rigorously will ensure that your ERP implementation has the best chance of success.

1. Discovery

The discovery phase is an extensive research process that gathers information on an organization’s current systems and processes to detail the problem landscape before any ERP solutions are decided upon.

This phase provides a solid foundation for the entire ERP implementation process through the development of a shared understanding of what a successful implementation will look like.

The discovery phase includes the development of technical specifications to inform the selection of an ERP system and whether this would be best-delivered on-premise or using cloud infrastructure.

The Discovery team is typically made up of senior stakeholders, project managers, technical leads, external consultants, and representatives from across multiple departments. Everyone who will be involved in developing or using the system should have representation on the Discovery team. 

2. Analysis

After the information has been gathered during the discovery phase, a detailed analysis phase will occur to determine the business case for implementing an ERP. 

Typically the outcome of this is a detailed business case that outlines project objectives and how these will be achieved through the ERP implementation plan. 

The development of a business case allows an organization to evaluate the benefits, risks, and costs of the ERP implementation process.

3. Planning

Implementing ERP software is probably one of the biggest digital transformation programs a business will undertake. It’s therefore vital that an ERP implementation plan is created to document the resources required, timelines for implementation, and how the change will be managed.

a. Resources

As part of the ERP implementation plan, you will need to select the implementation team that will be responsible for delivering the project. This team will comprise both technical and non-technical members who will be involved in developing the software and providing feedback on its viability.

It’s extremely important to include stakeholders from across the organization in the implementation team, as you will need to involve end-users of the software in the design, development, and testing phases to ensure the final solution is fit for purpose.

b. Change management plan

Your change management plan will document the tasks required to successfully move from your current fragmented systems to the new ERP system. This will include tasks and milestones around data migration, QA and testing, budget forecasting as the project progresses, and end-user training once the new system is live.

Alongside outlining the implementation roadmap, milestones, and tasks, your change management plan should also include guidelines around general communication, how urgent issues should be escalated, and how progress will be tracked.

c. Budget forecasting

As with other large-scale software projects, it can be easy to go over budget when implementing a new ERP system. 

It’s important that you budget realistically and anticipate that some roadblocks may occur during the implementation process. It’s therefore advisable to set aside a reasonable amount of contingency in your budget from the outset to cover unexpected costs and delays. 

This contingency can be reviewed throughout the implementation process to ensure that it’s sufficient and adjusted upwards or downwards to reflect actual project progress.

4. Design

The design phase or the ERP implementation process takes the results of the discovery and planning phases to develop a detailed functional design that outlines how the ERP will enable new workflows and processes from an end user’s perspective.

A key output of the design phase includes process maps which visually describe the flow of work the system will allow and how the ERP system will be experienced by the end-user. This can be coupled with UX/UI wireframes to show how content and functionality will appear within the software.

Again, it’s vital to get feedback from end-users at this stage, as any confusion over how they interact with or use the software may impact its successful implementation.

5. Development

Once the system and design requirements have been validated, it’s then time for the development phase to begin. 

Developers will configure the chosen ERP software to match functional requirements, process flows, and wireframes. Typically this involves a high level of customization to meet an organization’s exact requirements.

Alongside writing new software, it’s important that developers also write clear documentation throughout the development process. This ensures that no knowledge is lost after the development phase and that future changes to the ERP system can be made with full knowledge of how the system was initially developed.

6. Migration

During the migration phase, the implementation team will start planning the data migration from legacy systems into the centralized ERP system. This can be incredibly complex, as different legacy systems will store data in different formats and database types. 

To ensure a successful migration from these older systems, the implementation team will need to develop clear protocols for handling incomplete or missing data, alongside ensuring that erroneous data is cleaned up or removed prior to migration.

7. Testing

Depending on the development processes used, technical testing of the system will occur throughout the development process either with each new deployment of the system or at key specified intervals. 

The QA or testing team will check each part of the new ERP system for bugs and data integrity, alongside running user testing to ensure that end users are satisfied with the software.

User testing is a good way of beginning the training process to ensure the ERP system will be successful post-launch.

8. Training

A successful ERP training program will make it easier for existing employees to adapt to the new system and should be considered a key phase in the ERP implementation process. 

Alongside training employees in how to use the new system, organizations should also consider how they will help employees adapt to wider business process changes. 

As one of the benefits of ERP systems is improved efficiency, organizations should also consider how they will retrain and redeploy employees whose workloads will be reduced by a successful ERP implementation.

Traditionally, training includes onboarding materials and peer support, webinars and live classes, e-learning platforms, and written documentation, along with newer and more effective means of training, such as a Digital Adoption Platform. It’s important to offer a range of engaging training materials to cater to different learning styles and skill levels.

9. Deployment

As ERP systems can range in scale, the process of “going” live may alter based on available resources.

Source

a. All at once

An all at once, or major release, involves a mass switch over to the new system all at once. This typically happens all on the same day and requires full alignment from across the entire organization.

b. Phased

A phased approach packages up the transition into discrete modules or units which can be aligned around departments or business functions. While a phased approach can take longer, it does provide more flexibility to test individual parts of the ERP system as they are pushed live.

c. Parallel

In a parallel deployment, both the legacy and new systems are run side by side to ensure that the new system is fully functional before the old one is depreciated. This reduces the risk of data loss, however is more expensive as resources are required to run and operate both systems.

10. Support

Once the ERP system is live, it will require long-term support and maintenance to ensure it remains fully operational throughout its lifespan. This will include fixing bugs and performance issues, alongside fine-tuning data flow and introducing new data sources.

After a new system is deployed, it is also important for organizations to evaluate its success against the original business case by analyzing return on investment, efficiency savings, and staff satisfaction with the new system.

Main Costs in an ERP Implementation

The largest cost in an ERP implementation is undoubtedly tied to the underlying cost of the software and hardware. This includes:

• Software licenses 
• Cloud or on-premise infrastructure and networking

Alongside the technology costs, you will also need to factor in personnel costs for the duration of the project:

• Software development and integration team 
• Consultants and system architects
• Testing & QA professionals
• Training professionals and platforms
• Project managers

After the initial implementation is finished, you will also have ongoing costs to maintain and support the new system:

• Ongoing software licensing fees
• Support staff for hardware maintenance
• Software developers to handle bugs and ongoing system maintenance

Before you start the implementation planning process, it’s extremely important to draw up a realistic budget that encompasses all of the costs above. This will help align stakeholders and ensure that everyone understands the scope and scale of the project.

Alongside drawing up a rigorous budget, it is also important to forecast the positive financial impact the new ERP system will have on the business, such as reduced operational costs or improved efficiency. 

ERP Implementation Best Practices

Implementing enterprise resource planning systems can be an arduous task, but there are a number of steps organizations can take to ensure that new systems are implemented successfully.

i. Get executive buy-in

Successful ERP implementation requires cross-functional collaboration and the reallocation of budget and resources throughout the implementation process. 

Getting executive buy-in ensures senior stakeholders understand the long-term benefits and how this will impact top-level business goals such as revenue and profitability. Successful buy-in ensures executives are fully committed to seeing the project through from planning to long-term support.

ii. Focus on business outcomes over technology

The primary focus of most technology projects is on the technology, not the wider impact, which leads to decisions being made through the lens of technology alone. This can result in the bigger picture being missed and misalignment between the technical solution and what an organization wants to achieve.

Instead of looking at technology alone, companies should be focusing on the business outcome they are trying to achieve and making decisions through the lens of their ultimate goals, not software. 

iii. Clearly define system requirements

One of the cornerstones of success in ERP system integration is ensuring that system requirements are fully understood and documented before a line of code is written. 

This is why the discovery and planning phases are so important, as they provide a rigorous process for gathering stakeholder input from across the organization on feature requests, current pain points, and potential future gains. 

iv. Select the right team members

To ensure your system requirements are fully fleshed out, it’s important to select a diverse cross-functional team that is representative of all departments across your organization. 

Alongside having varied input from a range of roles, it’s also extremely important that you have capable project managers and project leads to ensure key milestones are met and that the project continues to progress according to schedule.

v. Devise a change management plan

Complex changes across an organization can result in disconnected employees and poor productivity as people struggle with new systems they don’t understand. That’s why it’s vital to have a robust change management plan that incorporates training, streamlined communication, and clear business rules.

Apty enables organizations to make large-scale changes while onboarding a new ERP or migrating to a new system, without having to enforce hundreds or thousands of employees to sit through cumbersome and ineffective training sessions – rather, Apty allows you to give your team the content they need, when they need it, through custom on-screen guidance.

In addition, Apty ties back to positively influence your business outcomes and shows you your true adoption rate, and not just how many team members interacted with your walkthroughs or tooltips, which is critical when rolling our large enterprise software, such as an Oracle Cloud, NetSuite, ServiceNow or other enterprise ERPs.

vi. Set a realistic timeline and budget

While it’s important for ERP implementation plans to progress at pace, budgets and timelines need to be realistic and reflect the unknown nature of some parts of the implementation process.

Estimates for timescales should include contingencies at each stage that can be utilized if required and budgets should include at least a 25% contingency for unexpected costs. 

vii. Clean data before migration

It’s important to make sure the formatting of the data in a new ERP system is correct before importing data from your existing system. 

The process of cleaning legacy data before migration should ensure existing tables and databases are correctly formatted before they are imported into the new system, along with removing redundant data that provides little value.

viii. Test system before deployment

Testing your ERP system before deployment is important in ensuring that it is fit for purpose and able to replace your legacy systems. 

This will include unit testing for each part of the system, integration testing to ensure that these parts work together and system testing to ensure that the whole system operates as expected. 

Alongside technical testing, it’s also important to develop a full UAT (user acceptance testing) plan that allows actual end-users to test the ERP system before it is fully implemented.

ix. Invest in employee training and adoption

According to recent surveys, when it comes to ERP budget calculations, 65% of companies require additional modifications to improve efficiency and usability. 

It’s therefore extremely important to determine a sufficient training and adoption budget upfront to support users in transitioning to the new system.

Selecting the right training platform is therefore vital and at Apty we are proud to help organizations achieve 80% savings in software support and training costs, alongside helping organizations achieve 300% faster adoption of new software.

Make Your ERP Implementation a Success

The ERP implementation process can seem daunting at first glance, especially factoring in the high costs associated with unsuccessful implementations.

The key to successful ERP implementation rests on developing a full understanding of how users will successfully interact with the final system. After all, the software is only as good as the people that operate it and the processes put in place.

Apty’s Digital Adoption Platform helps organizations overcome ERP implementation challenges by providing teams with an all-in-one platform that helps speed up software adoption through effective training, onboarding flows, and on-screen guidance.

Alongside helping employees get up to speed with new systems, we also help teams maximize the benefits of new software by boosting employee productivity through automation.

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