It’s well documented that implementing ERP systems is difficult. This difficulty is mainly due to 3 barriers: the systems are complex, the skill level of implementation consultants varies greatly, and in general, companies are resistant to change.
The complexity of ERP systems is really just the nature of the beast. They have to be complex in order to have enough features to handle most business processes. In cases where an ERP system doesn’t have standard functionality for a certain issue, the system should have utilities that allow light development within the product, or linkage to an outside or third party application. One common example of this is sales commissions. Virtually every industry and every company has specific traditional ways of paying commissions, and no system can ‘do it all’. So, during ERP system implementation, this is a typical discussion – how to replicate the current processes or changing the company’s policies to avoid customization costs and simplify the process.
Skill levels of implementation consultants are all over the spectrum. Some can be ‘right out of school’, or perhaps only have 1 or 2 experiences. This is a critical element of the success of systems, and likely the single most common reason for failure. We will discuss this further later in this article.
Change management is also a difficult challenge. Most people, especially those who have worked somewhere for many years, have established their comfort zone, work alliances, and know how to play the politics in their organization. As we all have encountered, politics can be brutal and can overpower the good intent of any implementation team.
And, if you combine these 3 major barriers of successful implementations, it can create an impossible situation to get over.
ERP Implementation Training
So, how do we avoid any or all of these 3 barriers of ERP system implementation? Here are some best practices for erp implementation phases that we use at EpiCenter. We have done over 700 implementations, and our very experienced team has evolved these key recommendations:
Communications – this is key, as is maintaining the engagement of all parties. There will be lots of meetings, and attendance and engagement at meetings are critical. Top management must be fully supportive of the project and kept aware of its progress. For most projects we suggest the following structure:
Executive Sponsor – the CEO or other top-level executive needs to sign on as the sponsor. This means he or she has this project as one of their critical priorities and is committed to support and give direction to the project.
Steering Committee – this is the team of top-ranking staff from each major department, who get periodic briefings regarding the project. Their job is to ask questions, and fully understand what’s happening and how it will affect them. If a manager is attending Steering Committee meetings, they will know what’s happening and there won’t be any surprises.
Implementation core team – this is the group that does the hard work. Members of this team can be the heads of departments, but are usually subject matter experts (SMEs) in their area, and able to represent the needs of their department. They will also provide use cases to test and validate in the new software, and for their departments, they are the key resources for training.
Internal project manager – the implementation team will have a chairperson, who is the project manager. He or she may be one of the SME’s or could be a manager with experience in ERP implementations who would like to serve in this role.
External project manager – this is the lead person from the outside consulting firm and is the key resource representing the consulting firm. He or she works intimately with the Internal project manager.
Consulting SMEs – the consulting company will provide a team that works under the PM, usually representing the major areas of focus, for instance, finance, operations, and tools. They may also interface directly with corresponding members of the internal team.
Cadence – The implementation team should meet at least weekly, likely together in a ‘war room’ dedicated to this project, where they can collaborate, compare notes, and fill whiteboards with to-do items & ideas. The project managers should have a 1-hour meeting weekly to go over the schedule, review the budget to actual, make assignments, etc. The steering committee should meet at least monthly to be updated on progress, and more often as go-live gets close. The executive sponsor will have a corresponding EpiCenter executive sponsor and meet monthly or more often as needed. The executive sponsor should chair the steering committee.
Infrastructure – to maintain excellent project management communications, we use Microsoft Teams, which has become the de facto best practice for collaboration in today’s business world. This is where the calendar, key documents, project plan, and other documents are stored, and we use the various communications options to work with your team. We also record key meetings for future reference.
Scope – This is the next pitfall to be aware of. At the beginning of the implementation, a comprehensive evaluation of the project should be done, collaboratively between the company and consulting team to address the specific business functions, and what is ‘in scope’, and what is ‘out of scope’. This scoping document (at EpiCenter we call it a Strategic Process Review or SPR) is then the blueprint for the implementation. Later on, if there are questions of whether or not a certain process is included in the project, this document can serve as the scoping document of record.
ERP Implementation Budget & Change Management
The budget for the project is based on this scope, and this is likely the next aspect of strong recommendations – the project managers on both sides should track the actual vs. budget weekly during the implementation, and track exactly where the hours are being used. At EpiCenter, we have an internal system called ConnectWise that tracks every step of every project, and even sends alerts when a project or any phase of a project is over 80% of the budget. This keeps everyone on their toes and the project on budget.
Change Management is very important in an ERP implementation. ERP implementation is by definition change, for the better, for your organization. Guard against just replicating your old system in the new one. This is an opportunity to evaluate all of your key processes, and adopt best practices or at least take advantage of looking at things a different way. EpiCenter can conduct a ‘Change Management Workshop’ to help your team understand how to position themselves properly, and how to affect change in your organization.
Unfortunately, however, there’s always a bell curve, and there are staff at either end of the spectrum that just won’t be able to handle change. This is when your management team needs to support the project and work with staff who are resistant. The only constant in this world is changing; so, work with them to get onboard.
Once you have gone ‘live’ with the system, you’ll have the opportunity for ‘Phase 2’ projects that were out of scope originally, and you’ll also have the time to really smooth out and automate processes. Don’t automate too early – you’re better off doing this after a few months so your staff fully understands all aspects of the system. Once you start automating, you may lose the flexibility you had in doing individual processes one at a time. Automation is great if it’s done right, and can be a disaster if it’s not.
Selecting the Right Strategy Partner
Before your project can begin, you need to choose the right consultants for the job. The consultants assigned to the project MUST have impeccable credentials and excellent experience. It is virtually impossible to be successful if you don’t have consultants with these qualifications.
At EpiCenter, our minimum requirements are a B.S. in Business or Engineering, 5-10 years experience in manufacturing, usually in a key position such as controller, materials manager, production scheduler, etc., and 3+ experiences on Epicor ERP (now Epicor Kinetic) implementations.
This experience as a full-time user of the system is critical to understanding our customers. And, once we have this person in place, they start to learn how to implement. Our consultants are given mentors, have to complete Epicor certification testing, and begin assisting other implementation teams as they gain experience. They are in constant communication with their managers, teammates, mentors, and other subject matter experts.
In addition, at EpiCenter, we back them up with developers, tools consultants, systems engineers, and many many other consultants they can call on for help. There are no ‘silos’ at EpiCenter, and we don’t allow big egos either – we have a sincere, dedicated team of people who love what they do and are vigilant to continually improve our practice.
As a customer, you should meet your consulting team at the beginning of the project, and don’t be afraid to ask them their credentials. Some are CPAs, PEs, MBAs, etc. but all of them have impeccable backgrounds and recommendations. If you meet them and you aren’t impressed – don’t be afraid to cull them out right off the bat. And, you should insist that your same consultants stay with you throughout the project. This continuity is another key to a successful implementation.
Contact EpiCenter to Learn More about our ERP Services
Implementations are the primary activity of EpiCenter, and we have a huge number of techniques, examples, workshops, and expertise to augment our teams’ expertise. Our focus is on the most difficult part of the ERP process, so contact us today if you’d like to speak with us about your specific needs.