Are You Ready for an ERP Project? [ERP Readiness Assessment]

At this point in your ERP evaluation, you’ve identified the need for an ERP system from an operational perspective and put together your ERP project team. Now it’s time to look at cultural readiness – answering the question, ‘Are we ready?’. It’s not so much about whether you have a business need for an ERP system from a data and process perspective. The focus here is whether your organization is ready to embrace the inevitable change that comes with implementing a new system.

An ERP implementation can be a key element of your company’s growth. But if you’re not truly ready, it can be a costly and time-consuming undertaking. Research suggests the ERP implementation failure rate is 60%, with 54% of projects going over budget. So, to make your implementation a success, you need to prepare early, do your due diligence and clearly define your goals.

Start by conducting a survey to understand how prepared your organization is to undertake such a big project. For instance, if your executives aren’t convinced that you need ERP, they likely won’t be supportive if issues arise during the selection or implementation process. Similarly, if key user groups aren’t willing to make changes, then their use of the new system will be limited, deeming the implementation a failure. And if goals, expectations and anticipated ROI aren’t clearly defined, you’ll have a hard time measuring the success of the overall project.

This is arguably one of the most important steps in the process and can have a significant impact on the success (or failure) of your ERP implementation. Sit down with your ERP project team and discuss each of these questions to determine how ready your company – and most importantly, your people – are to embrace a new ERP solution.

1. What is our motivation for implementing ERP? Is there pressure across the organization to motivate change?

2. Are our business processes standardized across all departments and offices?

3. Have we assembled our ERP project team? Have we appointed our Project Champion?

4. Have key stakeholders documented specific needs and wishes? Are all business requirements documented in one place? Are they prioritized?

5. Have we identified and documented an ERP strategy and change management plan?

6. Have we had significant turmoil in the past few years? Are we still recovering from it? (Examples include management change, layoffs, other IT projects, etc.)

7. Does the ERP implementation have executive sponsorship?

8. Have we identified early system adoption users (initial key users)? Who are they? Do we see any challenges or roadblocks to getting them on board? How will we overcome these?

9. Have we documented the business case, assumptions and anticipated ROI?

10. Have we outlined our key performance indicators (measurements of success)? What are they?

11. Is our company culture open to the ERP project? Or will key stakeholders have to be convinced of its usefulness and ROI? How will we go about convincing any holdouts of the value?

12. Is our ERP implementation project fully funded, including miscellaneous and unexpected expenses? (As a good rule of thumb, plan for about 10% for additional programming and miscellaneous expenses.)

13. Is our data ERP-ready? The data going in is only as good as the data coming out.