The Enterprise Resource Planning (ERP) industry is expected to be worth over $40 Billion by 2020. With solutions available for businesses of all sizes and industries, there is an increasing trend in ERP adoption.
The power of ERP drives rapid business transformation; Netsuite, an industry leader, can lay claim to implementing a myriad of successful technological foundations. One of their marquee clients, Second City, describe how “they’ve had exponential growth without having to increase their headcount”by nearly doubling their offerings thanks to their ERP solution.
Without an able foundation, ERP solutions will prove insufficient to scaling demands in the same way a three-story house can only maintain a certain population. The most common reasons for low success rates among ERP implementations is this lack of foundation, which manifest itself in inadequate change management, poor end-user training and a lack of thorough requirements gathering at the start of the project.
These reasons also reflect the limitations of ERP organizations as an implementer. Consulting firms, on the other hand, approach each stage of ERP implementation differently. These specialists leverage their expertise of the digital ecosystem as a whole to take ERP implementations further by better understanding a business’ needs, its people (i.e. the end users) and helping to customize the ERP to address and solve specific problems.
Let’s look at how each stage of the ERP implementation is approached differently by a consulting firm.
#1 Project Initiation
Unlike vendors themselves, a consulting firm gets the project managers involved from the very beginning so that the business problems are well assessed and defined. An emphasis is placed on change management and user adoption. Some of the most difficult challenges in change management rest in intra-enterprise changes, which emerge when process, technology, role, or any other miscellaneous change impact how the business operates internally. Employees need clarity around why the change is necessary and how it will benefit them so that they can be ready to adapt to it.
#2 Gap Analysis
A consulting firm assesses the direction in which the business is headed and customizes the ERP solution to meet their business goals. At BORN, we use our proprietary 4C Analysis; categorizing feature sets by the effort required according to Conform, Configure, Customize or Compromise actions. Gap Analysis plays a vital role in future-proofing ERP to avoid issues that emerge from scaling (such as appeasement returns) that may otherwise strain normal inventory management.
#3 Software Customization
Before deciding to customize the ERP software for a business, a thorough comparison of business needs, out-of-the-box ERP features and customization is pivotal. These differences, no matter how minor, are reviewed in detail to help the client understand any challenges, cost and overall work involved in ERP customization. On-time implementation and quality of the customized ERP are ensured using Accelerator Frameworks.
Post customization, the ERP software needs to be tested to see if it meets quality and functional requirements. In addition to standard Unit Testing and other internal tests, a consulting firm establishes multiple test gates that are enforced and validated through a series of standard test scripts and test processes.
#5 Data Migration
This is perhaps the most the most important yet challenging phase when implementing an ERP solution. A consultant firm plans for multiple iterations of data loads to ensure that the quality and security of the data isn’t compromised.
#6 User Acceptance Testing (UAT)
At this last stage of testing, users are allowed to test routine tasks within the ERP system. Extensive training needs to be given to users prior to this testing. A consulting firm can get UAT done so efficiently that it takes up just about 5-10% of the total scheduled ERP implementation time but can save up to 30% of the time spent looking for answers once the ERP is live. This is achieved by adhering to UAT best practices including (i) Defining the right metrics (ii) Ensuring user awareness (iii) Strategic grouping of testers (iv) Chasing and removing obsolete outdated steps in the plan, etc.
#7 User Training
User training is taken one step further when ERP is implemented through a consulting firm. All necessary training from Pre-requisite to Post-Live training is completed through a joint effort of the consulting firm and the ERP vendor, thus creating internal subject matter experts and trainers to assist end users across departments. Trainers conduct multiple Show and Tell sessions throughout the program to gradually familiarize the end-users with the ERP system. This assures improvement in employee productivity, time savings and risk management.
#8 Going Live
After all the necessary testing and debugging is done, the ERP is finally ready to go live. Merely going live with an ERP isn’t optimal. That is why a consulting firm takes a war-room approach; all vital information is accumulated in a single location to brainstorm with all the stakeholders. All hands support is also provided to the client during deployment.
Organizations need to establish a governance process to manage their ERP vendor and build a good relationship with them so that they are responsive and motivated to understand the business and to work together as a team. This white glove support can be made possible and augmented through a consulting firm. To ensure effective knowledge transfer about updates in the ERP to end users, the duration of hands-on support from the implementation team is extended. Establishing a sturdy ERP foundation through these rigorous steps will enable maintenance and scalability to go smoothly.