Companies today have realized the benefits of having an ERP system in place. However, an ERP implementation has several facets to it and if not executed properly, could result in a business disaster rather than an advantage. We discuss five important parameters for a successful ERP implementation.
1) Backup of the executive management: The executive management should always be closely associated with an ERP implementation. Having a top down approach will ensure successful ERP implementation. This is because the top management can understand the company’s ability to adopt the changes and will push for the application until the last level, guaranteeing a faster implementation. On the other hand, a bottoms up approach will not result in a very smooth implementation.
2) Create buy-in among shop floor people: People are resistant to changes. And this holds true for ERP too. For instance, if you are implementing an ERP process in a manufacturing sector, you have to first understand the people who will use it. While the corporate people will accept it willingly, the people on the shop floors will definitely resist it. This stems from the fact that the shop floor people are scared of losing their jobs if you initiate any kind of technological changes. To overcome this, show the user benefits of the ERP implementation right at the start. For a successful ERP implementation, it is important to create a buy-in for the application amongst the people who will be using it.
3) Avoid excessive customization: ERP is like a lubricant that will help your business run faster. Many a times, people mold the ERP system to be implemented to fit their business processes. For a successful ERP implementation however, it is much easier to slightly tweak the business process rather than the ERP system. Most ERP systems don’t fit perfectly into an organization, due to different businesses and mindsets of people. Hence, instead of totally customizing or localizing an ERP system, it is more preferable to do a little bit of business reengineering.
4) Focus on what can be easily done, initially: For a successful ERP implementation, it is advised not to expect a 100% fit for your organization, initially. Any new implementation will have a hitch. It is always encouraged to first implement 70 to 80% functionality of the ERP software and then focus on the remaining 20% irritants. In this way, you will have quick gains among your stakeholders and complete the project on time. For instance, a certain company, while undertaking an ERP implementation, decided to first focus on solving 20% of the irritants, instead of implementing 80% of the functionality, which was easier. After rebuilding and reprograming, the implementation stretched from a deadline of four to seven months and all the resources were allocated towards addressing the problems. This also delayed implementation of 80% of the processes.
5) Training for smooth change management: People training is very important for any implementation. For a successful ERP implementation, it is vital to train the employees properly, after convincing them about its various benefits. Providing incentives could be one way to encourage quick learning among employees. Another method could be displaying to the employees how the implementation can help them address certain difficulties they might be facing in their day-to-day operations.
About the author: Sanjoy Bhattacharya is head of IT Operations (APAC) at Kuoni Travel Group and has been in the industry for over 13 years as an IT strategist, specializing in managing IT across multi-nations and multi-cultural business centers.
(As told to Anuradha Ramamirtham)
This was first published in October 2010