by Project management. ERP implementations entail multiple phases: discovery and planning, design, development, data migration, testing, deployment, support and post-launch updates. Each phase brings critical tasks, and all elements need to stay on track, which requires meticulous project management. Additionally, successful ERP implementations require participation from all the groups that will be involved in developing and using the system. That can be incredibly challenging, because each department is juggling its ERP project responsibilities with multiple other priorities.
Strong project and people management, which includes setting realistic expectations, time frames and milestones, along with timely two-way communication, is critical to success. As with change management, backing from executives and other top leaders is essential to conquering this challenge, as well.
Project planning: Organizations often underestimate the time and budget necessary for a successful implementation. One of the most common causes of budget overruns is scope creep when a business adds capabilities or features to the system that weren’t part of the original plan and another is underestimating staffing needs.
Data quality: Once the organization has located all data sources, it can start thinking about migrating it to the ERP system. But that may involve a serious data hygiene exercise. Because multiple departments interact with the same customers, products and orders, organizations often have duplicate versions of the same information in their systems. The information may be stored in different formats; there may be inconsistencies, like in addresses or name spellings; some information may be inaccurate; and it may include obsolete information such as customers or suppliers that have since gone out of business.
Data integration: One of the key advantages of ERP is that it provides a single, accurate source of data for the whole organization. A key step in ERP implementation is data migration, which typically involves moving data from multiple older systems into the ERP database. But first, you have to find all of your data. This may be much more challenging than you expect. The information may be spread far and wide across the organization, buried in accounting systems, department-specific applications, spreadsheets and perhaps on paper.
Change management. An ERP implementation involves more than just switching to a new software system. It typically means overhauling business processes to take advantage of the efficiency and productivity improvements possible with the new solution. This requires a shift in mindset and a change in everyday work processes for many employees, which presents typical change management challenges.
Continuous improvement: An ERP implementation is not a one-off effort that ends when the new system goes live. The solution must continue to evolve to support new business demands and technology. The project team needs to continue to manage the project after deployment, fixing issues and supporting new requirements as they come up.
Cost overruns: ERP projects are infamous for sailing past budgets after the implementation kicks off. Many organizations underestimate the amount of work required to move to a new business system, and that results in spending more money than expected. These cost overruns often show up in a few different areas.
