Overhauling a company’s backend systems by going live with a new ERP implementation is fraught with potential complications.
A couple examples.
Chocolate maker, Hershey’s, rolled out a new ERP implementation in 1999 and discovered issues after go-live that made the company unable to deliver chocolates right before that year’s Halloween season. The result: Hershey’s stock dropped 8 percent.
A few years later, in 2004, the University of Massachusetts rolled out a new ERP system and discovered in the midst of the school year that more than 27,000 students were unable to register for classes or collect financial aid. Can you say epic fail?
The failure rate for ERP systems rollout can be as high as 75 percent, a strikingly high number given the adverse effects that come from backend systems that don’t perform. Failure or crushing complications need not be the case, however.
Although there will always be risks and a few technical challenges with a complete systems overhaul, ERP go-live can and should be mostly pain-free. There are a number of things that you and your team can do to reduce the likelihood that a systems rollout will disrupt business.
Here are three important questions you should ask for a smoother rollout.
The single most important factor that contributes to a smooth go-live is making sure that the chosen ERP software and its configuration are fully aligned with the business. Setting this foundation starts during the ERP evaluation process and continues throughout implementation right up until rollout.
This assessment includes understanding the lines of business, key stakeholders, and other specifics such as the software currently in use within the business (both software officially used within your organization and the shadow IT adopted by employees when official solutions prove inadequate). You also should define your organization’s current business processes and the goals for the new system, and make sure your chosen ERP solution aligns with these needs.
Don’t answer these questions alone, though! Seek input from management and key stakeholders in each department that will be affected by the new ERP system. Stakeholder input is perhaps the single biggest indicator of ERP deployment success, and that input should start during the needs-assessment phase.
A failure of due diligence isn’t usually from picking a poorly-designed ERP solution. More often, the failure comes from not properly understanding the needs and situation of the business requiring the software. There’s no one ERP solution that is right for every business, and making sure the software aligns with the business is crucial for a smooth rollout.
ERP solutions are complex, wide-ranging business information systems. Training and practice on the new system before go-live is critical, and ongoing training boosts adoption and proper utilization.
Unfortunately, many companies fail to recognize this important component of the implementation process, which leads to slow adoption and sometimes perceived failure of the system. Inadequate training and education often is the weakest link in the implementation process.
Training employees and conducting thorough change management should start well before a new ERP system goes live, and three important components include:
Live Training. There should be train-the-trainer education sessions, individual one-on-one training for employees, and optionally live web training sessions so remote employees and those in locations far from corporate headquarters can get adequate training on the new system so they are ready before go-live.
Self-Serve Resources. Even with good live training, there is the need for a comprehensive library of tutorials that cover how to use each major function and feature in the system. Ideally many of these tutorials will be in video and written form. Employees also should be connected with a larger community around the product for getting help with finding answers, and there should be a clear and simple process for getting answers to questions that are not covered by instructions and tutorials.
System Sandbox. Before rollout, employees also should be provided a system sandbox with live company data so they can learn the system and play with features hands-on without impacting the production environment. All the training in the world won’t help employees get ready for a new system go-live if they can’t get hands-on practice first.
Test, Test, Test!!!
Rolling out a new ERP system is necessarily a complicated, involved process with plenty of testing. Rushing through a system go-live is a recipe for disaster, because data and processes related to the new system must be validated, with issues discovered and corrected.
This does not mean that the go-live phase has to drag on. One way that businesses can reduce the length and complexity of an ERP go-live is by taking a staggered approach where various functionality or divisions go live over time. This phased approach yields a faster go-live and reduces potential issues during rollout.
Another way that businesses can speed up go-live and implementation overall is by limiting customization and using prepackaged ERP industry solutions that come preconfigured for a given line of business. These relatively turnkey ERP solutions make for faster implementation and reduced rollout times because they come largely pre-validated.
Asking these three questions will not completely eliminate the challenges with ERP rollout. But they will significantly reduce the likelihood of problems.
For more on setting the right foundation for your new ERP system, read our ERP Implementation Guide.