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FAQ: ERP upgrade best practices

This FAQ has expert answers on how to plan, execute, and test an ERP upgrade for maximum ROI and minimum disruption to business processes.

Upgrading an ERP system can be a complex, business-changing project that deserves much of the same careful planning and execution as a brand-new implementation.’s panel of experts answered questions about best practices that can make any ERP upgrade go off smoothly.

I've heard that communication among departments during an ERP upgrade project is critical. For a manufacturer, which departments should be directly involved in the upgrade process?

Communication of critical information and decisions must be coordinated among business units, IT and any consulting resources. One approach is to build the ERP upgrade project team using role-based scenarios. This way, a business process flow touches upon all key users -- from the machine operator to the line manager to the order clerk to the shipping manager to the distribution team.

The key is to make sure you create business flows around an object like an order. Then take that order and walk it through the process across all the functional fiefdoms and all the roles that touch that order. Once you do that, you can determine who should be included in the ERP upgrade team.

You will quickly find that there are more people needed than expected. However, with a process map, people in every role understand the upstream and downstream implications.

--R “Ray” Wang, Altimeter Group

How should a manufacturer evaluate whether the newest features in an ERP system are worth the trouble and cost of upgrading?

Every company has unique business needs and competitive advantages that it is trying to address with its ERP software, so the answer depends on how well the new software addresses those needs. It is therefore important to understand exactly what the ERP upgrade will provide and what it will cost. While there is software available to perform a basic comparison of features, it shouldn’t be the only evaluation tool, as it typically provides generic assessments based on the vendors’ yes/no responses. Instead, companies should seek a “day in the life” view of how well the software meets their unique business needs.

--Panorama Consulting Group

An ERP upgrade is a major project that takes substantial time, money and human resources. Which project management methodologies and practices are the most effective in avoiding problems and ensuring that an ERP upgrade is finished on time and within budget?

An ERP upgrade project is usually less intense and costly than a new install, but the business risk and potential for schedule and cost overruns are significant. Well-managed ERP projects employ planning and implementation processes similar to those of new installs, but right-sized to an upgrade’s more limited scope. Anything less, and the upgrade can go astray in three main areas.

First, to avoid problems, don’t be an early adopter of the new release. Wait at least until the first major software patch is released, then check the pulse of other companies that installed the upgrade. Otherwise, you risk wasting time on endless cycles of bug fixes and rework involving the vendor, project team and consultants.

Underestimating the effort needed to retrofit modifications is a major pitfall. Don’t assume that the new functions will replace the old software’s customizations, and beware the impact of changes the vendor made to the ERP database and related software.  

Plan to have the same testing phase as you would in a new install, including formulating test cases, checking results, and retesting as needed. Users must be heavily involved even when the ERP software’s main functions and user interface have not changed. Finally, allow time for stress testing if new technologies have been added to the system.

--Steve Phillips, director of information technology/ERP project manager, Candle-lite

What kind of technical support and other assistance should I expect to receive from the ERP vendor and consultant during the ERP upgrade project?

The tech support that comes with the maintenance agreement will help with purely technical issues in the software itself, while the implementation consultant addresses business adoption and integration issues. It is important to plan the project in a way that transfers some of the vendor and consultant knowledge to internal stakeholders and end users so the company retains the know-how to address future issues on its own.

--Panorama Consulting Group

What’s the best way to test the upgraded ERP system before going live?

Five key things should be tested: software configuration, customization, data, integrated business processes, and user security profiles. Most organizations and vendors address the first two, but the other three are often overlooked until too late in the ERP upgrade project. While it is important to confirm that the software works as configured and customized, it is equally important to test it with the actual data and transaction volumes of your organization. In addition, integrated, end-to-end business processes should be tested to ensure that all ERP and non-ERP processes are operational. Finally, test security profiles to ensure that employees have the appropriate access and security to execute required business processes when the upgrade goes live.

--Panorama Consulting Group

How can a manufacturer take steps to avoid disrupting business during the cutover to the new ERP system? What are the must-have safeguards?

According to Panorama’s research, more than half of organizations experience material disruption to their operations when they switch to a new ERP system. Companies can take a number of steps to avoid such disruptions. First, fully test the software and business processes as described above. Second, carry out a comprehensive change management and communications plan to help employees get comfortable with the new software. A good plan involves more than just training on how to use the software. It also entails clearly communicating the business process and organizational changes that will come with the ERP upgrade. Finally, a comprehensive go/no-go assessment is critical to ensure that the organization and its operations are ready for the go-live day.

--Panorama Consulting Group

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