5 Secrets to ERP Implementation Success - A Guide for SMEs
Selecting and implementing a new ERP system is a complex process that demands time, energy and resources from your organization. Many small to mid-size businesses find it overwhelming, particularly if it’s their first ERP project. And the fear of a failed implementation is real. But it’s well worth the effort for growing companies. According to Aberdeen research, 77% of SMEs that implement ERP are able to standardize their back office processes. This is just one of many factors that leads to an 11% reduction in operational costs on average. So, how do you achieve similar results in your business, while minimizing the disruption in your business?
1. Put your people first
Changing your operational systems will have a significant impact on your business, there’s no doubt about that. Whether the impact is positive or negative is in your control. The technology is an important component of your ERP project. But your people need to be the priority. First and foremost, make sure the project is fully supported from the top down and make that clear to everyone on your team. Your owner or CEO should be communicating both the need for a new system, as well as the benefits from the outset of the project. Help people understand how it will make their jobs easier and more efficient in the long run. But don’t shy away from being real about the work required to get this system in place. The demand on your team’s time will vary throughout the project, so be flexible and adjust workloads to accommodate the need.
Having an all-star ERP project team in place can help with this. Part of their role is to communicate to their respective departments throughout the project and gather feedback to bring back to the group. Give people ample opportunity to provide input on what they would like to see that allows them to do their jobs more effectively. When they feel involved in the process, they’re less likely to resist the change.
Above all, remember that people won’t change without help. You can’t expect success if you thrust a new system on people, give them a few days training and set them loose. Create an ERP change management plan to ease the transition to your new system. The time it takes will pay off in the end.
2. Plan for the project
A successful implementation requires a methodical approach, starting with the ERP evaluation and all the way to post-implementation. With a structured project plan, you’ll have the building blocks you need to select the best solution for your business and feel confident in your decision once you’re live. Make the project a priority within the organization – it’s too important to be a side project. That means dedicating the right resources and setting milestones the way you would with any other project. Be realistic in your expectations for timeline, demand on your team and what you want to achieve. Finally, prepare for the unexpected. No project will go exactly according to plan. So, think about what could derail your project and plan accordingly.
3. Align with business strategy
One of the first steps in your project is setting the objectives – outlining how a new ERP system will change the business. Whatever your objectives are, they should align with the overall strategy of the business. This is one area where your executive sponsor should be heavily involved – they can provide insight into what the company’s goals are. That should drive the goals of the project, looking at the long view. This is a system you’ll have for years to come, so you don’t want to limit yourself to what’s important now or in the next two to three years. Look ahead to the strategic objectives for the next five or 10 years – the ERP system you choose needs to support that vision.
4. Focus on business process and continuous improvement
When you’re evaluating solutions, it can be easy to get hyper-focused on what the system does out-of-the-box. The reality is that today’s ERP systems are designed to be flexible. They can flex to accommodate your business processes, instead of you adjusting to what the system can do. You need to have a strong understanding of your existing processes before you can think about how those processes might change with a new system. What do your processes look like? Where are the bottlenecks? How can they be improved? These are all questions you need to answer before you outline your functional requirements. The goal here is to make your processes better and more efficient, not force old (bad) processes into a new system.
Keep in mind that your business is ever evolving. The reason you’re implementing an ERP system is to facilitate that growth. While your processes will improve with the initial implementation, the work doesn’t end there. Develop a continuous improvement mindset across the organization so that you’re always thinking about how you can leverage your system to be more efficient and more productive.
5. Select the right ERP implementation partner
We’ve seen it before – companies find the right ERP solution, but they select an implementation partner that isn’t a good fit for them. Unfortunately, this can make or break an ERP project. Choosing the right ERP partner is just as important as choosing the right ERP solution.
You’ll want to evaluate your partner for the obvious things – system expertise, industry knowledge, years of experience and the like. But don’t stop there. Make sure they’re a good fit from a culture perspective as well. Think about how they interact with you throughout the sales process, how they approach success, how they communicate, what their company culture is like. These are all important indicators of what your experience will be like working with them over the long-term. Having fit from a people perspective will prove valuable as you get into implementation and beyond that, as you need ongoing support to grow your business.