Strategic customization is a non-negotiable if you want your ERP investment to deliver value to your business. This requires a well-organized project implementation plan, which is typically outlined by your Chief Information Officer (CIO) and leadership team. Your CIO should work with you to accomplish the 4 main ERP implementation steps we outline below.

Unfortunately, many small and midsized manufacturers do not have the IT resources and executive buy-in necessary to plan for and manage an ERP implementation efficiently. Inevitably, these companies find themselves missing deadlines and end up over-budget by the time the project is completed.

What Roadblocks Derail an ERP Implementation?

According to Panorama Consulting Group’s 2019 ERP Report, failing to set the right expectations is the top reason ERP implementations are not completed on time and in-budget.

Businesses often underestimate the time and resources required to manage an organization-wide technology change. They tend to focus more on the technology than the people and processes it supports. Even if you have an outsourced IT provider, most SMBs use an average of seven full-time internal resources to facilitate project planning, implementation, testing, and employee training. Those who properly invest in change management are better equipped to control the project scope and plan for hiccups ahead of time.

Why is it so hard to integrate people and processes with an ERP solution? Because it requires input from the executive team, individual departments, the vendor, your IT team, your , and your employees. Communication and collaboration are what allow your business to integrate the ERP in a way that meets your needs today but can also be scaled to accommodate future business initiatives.

We’ve covered WHY manufacturers decide to switch to an ERP in our blog, “5 Benefits of an ERP for Manufacturers.”

Now, we are going to dive into HOW to go about implementing the solution with minimal roadblocks and business disruptions. Unfortunately, you can’t flip a switch and expect the technology to work as intended. The following section walks through each step of an ERP implementation and gives a high-level summary of the effort involved.

The 4 ERP Implementation Steps for Success

In its simplest form, the process of implementing an ERP follows four steps:

  1. Discovery & Selection
  2. Implementation
  3. Testing & Refinement
  4. Training & Support

Step One: ERP Discovery & Selection

A critical piece of the Discovery and Selection process is understanding what the new ERP should achieve and establishing what a successful implementation looks like. Are you trying to better control costs, improve efficiency, or alleviate frustrations with the current solution?

Once you can clearly define your goals, it makes the discovery process much easier. To do this, you need to assess your current business processes, IT environment and systems, employee needs, and upcoming business initiatives. Here are some of the basic questions we use to guide meaningful conversations throughout the discovery stage so we can uncover unknown needs and considerations that aren’t on your radar.

  • Are your current business processes already documented?
  • Do you know the types of transactions and information that each of your operating department’s processes?
  • What environment will the ERP be operating within?
  • Which departments will use the ERP, how, and why?
  • What existing systems (or future expected systems) will the ERP system need to integrate with?

You can use the information gathered during discovery to determine what ERP best suits your needs and aligns with your business objectives. By understanding your goals, we would be able to research and vet different ERP solutions before providing a recommendation for a best-fit solution.

Step Two: Implementing Your ERP

Once a solution has been identified as the right choice for your business, the next step is implementing it. Depending on the solution, this can be as simple as an out-of-the-box product that requires no customization to an extremely complex implementation that can take months, if not a few years, to complete. This all depends on what works for your business.

The information documented during the discovery and selection stage is key to helping plan for a successful implementation process. Now that you know what you plan to implement and why, now you need to determine who will be responsible for what pieces of the project, when tasks need to be completed, and how you will implement and integrate the ERP with the rest of your business with minimal delays and resistance to change.

If you’re moving to a new ERP from an existing system, you need to know:

  • How will you manage your old and new data moving forward?
  • What will happen to the legacy data from your prior system? Will you migrate it, keep the old system for reference, or import the data into the new system to support analytics and trends? Or, will you settle on a combination of these two options?

For example, maintaining an old system for reference may be a short-term option, with a longer-term goal of integrating the legacy data into the new system to end support and platform costs for the legacy system.

Successful ERP implementations require you to understand your business processes – the critical things you and your team do each day, each week, each month, and each year to conduct business. If you’ve already put the documentation and processes in place to know what those are, you’re well ahead of the game for your new ERP implementation.

Step Three: Testing and Refining Your ERP Solution

First impressions are important, especially when introducing a new ERP to your staff. If you roll out a new ERP without testing its real-life functionality within your business, employees will likely become frustrated by unexpected limitations, and adoption rates will suffer as a result. Your IT implementation team should coordinate a pilot group with multiple employees from various departments and roles who will use the ERP system to do their jobs. This group will test drive the software and work with IT to identify obstacles that impact the solution’s functionality and reduce employee productivity.

Use Pilot Groups to Test for Issues, Not Your Staff

Pilots in larger ERP deployments are often iterative. Testing and refinement will continue until the ERP delivers acceptable results that are at least as (if not more) trustworthy as your current ERP solution. By testing the new ERP solution with a small group of relevant users who expect to encounter limitations, IT can proactively address these issues before they impact the rest of the organization.

Step Four: Deliver ERP Training & Support

Rolling out a solution as robust as an ERP system doesn’t stop with implementation. Major technology changes will always be somewhat disruptive, but these disruptions should be planned for, communicated, and – after completing the software configuration- focused primarily on facilitating employee training and adoption. If team members don’t know to properly use the new system, you’ve accomplished nothing. Extensive training and documentation should be the final step to ensure success with your new ERP solution.

Prepare Employees for the Transition Period

As your new ERP is rolled out to the rest of the organization, businesses usually keep the old and new system operating together for a period of time to confirm the organization is ready to conduct business on the new system. This is generally maintained for about one accounting month and requires that everyone is prepared to maintain the information in both systems during the overlap period. This transition can be stressful for employees, which is why firms often source additional staff members or scale down operations to focus on core business requirements. It’s important to educate your staff around what they can expect during implementation, as well as what is expected from them to achieve success. By keeping your employees in the loop, you will increase adoption rates and reduce resistance to new technology in the future.

These steps outline the main initiatives to cover in your ERP implementation plan, but it doesn’t account for the complexities that accompany your specific business. Your CIO can help you understand what you can expect from the implementation process and create a plan that drives success. At Aldridge, we use the Implementation principle of the Framework for Successful IT as a structure to successfully integrate technology changes with your business-critical data, operations, processes, and people.

While it may seem easier and less costly to stick with your current solution, using software like QuickBooks in place of an ERP has limitations that can stall growth and cause you to overlook opportunities and risks.

Read our blog, “Why You Need a Manufacturing ERP System (Not Just QuickBooks),” to learn how an ERP can do more for the future of your business than an accounting system.

When Should IT Get Involved in an ERP Project?

Getting started can feel like a daunting task, especially if you don’t know where to start or what questions to ask. That’s why it’s crucial to have your CIO, or equivalent position, involved from the beginning. They know the questions to ask to ensure success for the project.

At Aldridge, we’re not just here to implement the software. That’s just a small part of what we do. We start by understanding questions like:

  • Why isn’t your current solution meeting your needs?

By understanding your pain points and goals, we’re better able to provide strategic direction and offer solution options that meet your current and future needs.

IT’s job isn’t complete once the software has been installed, but when your new ERP productively integrates with your existing technology, people, and operations.

To increase employee buy-in, IT should work with your leadership team to clearly communicate why the change is being made, how it will help improve their everyday work life, and what to expect during each step of the transition. Once the software has been implemented, it’s important to ensure training and support are available for current and future employees so their questions are answered, and they can use the new ERP as expected.

Ready to Implement Your Manufacturing ERP System?

Like most business software tools, ERP technology isn’t a solution in itself. It takes the right level of business knowledge, technical expertise, customization, testing, and training to successfully implement the software.

At Aldridge, we work with manufacturers to help them implement an ERP solution that accounts for the unique needs, risks, and goals of their business. We know red flags when we see them, and we can help you plan for potential roadblocks that cause many implementations to waste time and money or fail completely. Schedule time with an Aldridge representative to start planning for the next step.