Why you need a great ERP strategy?
According to Investopedia, out of every 12 businesses started, 11 are doomed to fail. Between rapidly evolving technology and ever-increasing business regulations, it’s difficult for companies to turn a profit year after year.
Unfortunately, this isn’t limited to small business startups. Even large corporations fall victim to bankruptcy. Sometimes this is due to poor timing or misreading the market. Often, however, businesses fail simply by failing to budget and manage their resources effectively. And sometimes, something as simple as an ERP implementation strategy can save your business thousands or even millions of dollars.
Why is ERP implementation so important? Effectively managing business processes is essential for any organization. You can have the best products, services, and ideas in the world. But without effective planning and leadership, they won’t see the light of day. ERP is one of many integral business systems that keep things running smoothly. Your ERP strategy is solely responsible for unifying the people, processes, and technology that make up your organization.
But while having no ERP strategy at all is a recipe for disaster, having the wrong strategy can be just as costly. This article will explain the best practices and common pitfalls when implementing an ERP. Read on to learn more!
ERP in short
ERP is an acronym that’s short for Enterprise Resource Planning. In its most basic sense, ERP software integrates all the various aspects of a business into a single system. It connects the different departments and processes through a shared database, from Human Resources to sales to production.
This streamlined network allows for better communication and on-demand, up-to-date information. Most importantly, it’s guaranteed to be consistent across all departments. Proper enterprise resource planning results in increased efficiency and improved cooperation. This leads to clearer decision-making at all levels of the business.
ERP allows companies to make better, more informed decisions faster, all without leaving lower-level employees in the dark. Ultimately, this means substantial cost and time savings for the entire business. ERP implementation describes the initial stages of setting up an ERP system that connects an entire enterprise.
Best practices for ERP implementation
ERP implementation involves many challenges. Fortunately, with careful planning and preparation, you can avoid the challenges and develop a system that is optimal for your business. Here are some tips to help you do just that.
Get Upper Management Buy-In
When it comes to companies implementing new ERP systems, those that struggle the most typically lack support from upper management. For a company to successfully implement major changes, all the decision-makers and leaders within it must be on board. What if executives and directors don’t understand the importance of ERP? They may not be supportive of making the necessary investment for it. Therefore, it is important to have a good business case that justifies the system, but also shows the return on investment. And if lower-level managers aren’t engaged in the new project, the employees under them won’t likely get the education and support they need to use the new system. As with any other major business change, getting the entire company’s leadership involved and engaged is key to a successful ERP implementation strategy.
Keep Mobile Users in Mind
At one time, the thought of using enterprise software on a cell phone would have been ludicrous. Today, however, it’s not only a common practice but a practical requirement.
Although every modern ERP system should offer smartphone and tablet applications and functionality, you should still keep this in mind as you choose and customize your platform. It’s not enough to simply access your company’s ERP system from a mobile device, however. You must also ensure that any sensitive data accessed from mobile devices stay secure.
Make a Clear List of Requirements Before Looking at ERP Platforms
If you go to the grocery store without making a list of what you need first, chances are you’ll come home without it. Likewise, you must thoroughly understand your needs as a company before scouting for ERP systems and vendors. Although this is clearly a part of the first phase in ERP implementation, it’s also easy to ignore.
Too often companies will give someone the green light to start searching for solutions before adequately defining exactly what they’re trying to solve. As a result, the platform they end up with doesn’t always meet their needs. This can cause confusion throughout the implementation process and beyond.
The more specific you are in defining exactly what your business needs from ERP, the more detailed potential vendors can be in their proposals. This will help you to better understand your options so you can make the right one.
Common ERP Issues and Mistakes
To say that companies are complicated would be an understatement. ERP seeks to simplify this complexity by coordinating its various moving parts. However, ERP itself can be complicated which can lead to problems during implementation. To avoid this, it is important to know what to look for and what the most common causes are.
Failing to Involve End-Users From All Departments
As already mentioned, getting buy-in from upper management is a key first step in ERP implementation. But companies often make a similar mistake by failing to include their end-users in the conversation. An ERP system should effectively connect every department of your company. But departments aren’t faceless cogs in a machine. Each one is made up of people who will be using the new system every day. If your ERP platform is not in sync with the real needs of the end-users, it will be not as effective.
To avoid this, ensure that every employee who will use the ERP system has their say. You might do this by publishing a company-wide survey to help discover what your business’s needs are in the first phase of ERP implementation. You should especially get feedback from as many end-users as possible during the final phases to get everything working optimally.
Improperly Budgeting for Technology Staff
It’s all too common for business leaders to underestimate the cost of new strategies and changes. When not enough money is budgeted for a project, the result can be embarrassment and confusion in a best-case scenario. At worst, it can mean an incorrect and inefficient job, as employees are forced to cut corners and rush the project to completion. If your company chooses to build an on-premises ERP as opposed to a cloud-based ERP, employing IT staff can be expensive. Even if you choose a cloud-based option, configuration during development may cost more than anticipated.
Regardless of which provider or type of platform you choose, you should prepare to spend more than initially expected. Plan to finish under-budget if possible.
Implementing the Entire System at once
As already mentioned, the deployment phase in ERP implementation doesn’t have to happen all at once. And unless your company is relatively small, it probably shouldn’t. Because companies and the world around us are constantly changing, it is almost impossible to predict all implementation requirements at once, especially in large companies.
Therefore, it is important to not only properly map all business processes, but also align them to your business strategy and future plans. In almost all cases, it’s best to implement an ERP in small steps. End users should be actively involved in each step to ensure nothing is overlooked. This allows systems and staff to adequately prepare for each stage of ERP implementation.
Failing to Implement a Maintenance Plan
The final phase of an ERP implementation is making sure you have the right support in place. This includes monitoring and updating the ERP system and giving employees the guidance and tools they need to use it.
All too often, the implementation of the ERP is seen as the last significant step in the rollout.
This is a big mistake. After all, it would all be wasted effort if the system is not then carefully maintained after implementation and the necessary investments. The solution to this problem is simple: choose a reliable partner who can help you manage and maintain your new system.
Don’t assume you’ll take care of it when the time comes. Be intentional about managing all aspects of ERP implementation from the very beginning, including long-term maintenance. Take a look at our services
Create the Best ERP Implementation Strategy for Your Business
Having a successful ERP implementation strategy is essential for every large business. But as you can see, there are many pitfalls that must be avoided along the way. A poorly planned ERP implementation can end up being expensive.
That’s where Eqeep comes in. We can help you mitigate and avoid these pitfalls with industry-leading software and customer support.
Navigating the daunting world of ERP implementation can be difficult on your own, but it’s easy when you work with Eqeep. Find out what Eqeep can do for your company.