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When it comes to ERP implementation best practices, the tried-and-true advice stays constant even when things change. And things have changed a lot.
First, the days of multiyear ERP deployment nightmares are behind us, thanks largely to the rise of modular, cloud-based ERP options.
"Whether you're an SMB, all the way up to a large enterprise, ERP implementation cycles are one-third [the time] of what they used to be," said Bill McNee, principal of consultancy McNee Associates.
What's more, ERP's evolution has not only brought capabilities that were unthinkable just a few years ago, but it has also made ERP attainable for smaller companies that previously were limited to QuickBooks and Excel spreadsheets.
Yet, through all this change, many ERP implementation best practices are still used regardless of the size and scale of a modern ERP deployment. None of them, however, guarantees ERP deployment success.
"The risk of failure hasn't really decreased over time; in fact, it's probably increased," said Eric Kimberling, CEO at Third Stage Consulting, an ERP implementation firm. "The good news is that the things you can do to mitigate failure haven't changed."
Here are five ERP implementation best practices that will help organizations do just that.
1. Define business goals first
One of the most important ERP implementation best practices is defining business goals. Too many companies put the cart before the horse.
They choose off-the-shelf software they believe will give them ideas on how to better run their business, Kimberling said. This can undermine a business's strengths.
"Asking yourself questions like, 'What do I want to accomplish?' are really important," said Robert Kugel, analyst and senior vice president at Ventana Research. "You'll have a much better idea of what you want to end up with."
2. Find an implementation partner
The search for a good implementation partner can be tough, but it's well worth the effort.
Eric KimberlingCEO, Third Stage Consulting
"My advice to CIOs would be to make sure you get really good help who's been through the wars of deploying these solutions on a strategic basis,"McNee said.
"The secret sauce [for ERP] is figuring out how to apply it to your business," said Wally Johnson, vice president of finance, supply chain and IT at Firstronic, a contract manufacturer based in Grand Rapids, Mich. "If you try to do that yourself, you are going to fail."
After being jettisoned by its European parent company and spending a holdover year on a limited material requirements planning application, Firstronic understood it needed a full-blown ERP system. It chose Plex software and, with the vendor's help, fully deployed the software in three months.
Plex's involvement helped the company deploy the ERP much more quickly, Johnson said.
Not just any partner will do. First-rate partners get better results, regardless of the quality of the technology, Kugel said.
"The wrong partner can result in huge deployment issues," he said.
3. Create good implementation methodology
Implementation methodologies will make or break the success of an ERP rollout.
A good ERP deployment requires defining business requirements through documentation, said Rick Gemereth, CIO of Lionel, a model train and diecast car maker in Concord, N.C.
Since Lionel moved to NetSuite's cloud-based ERP in 2010, it has seen what a difference good documentation makes. In fact, the company's attention to documentation has enabled it to customize NetSuite more effectively, Gemereth said.
"We've twisted NetSuite in numerous ways, but without documentation, it would have been much more difficult," he said.
The practice of sandboxing can also be part of good implementation methodology.
Sandboxing is critical to ERP deployment success, Gemereth said.
"I don't think it's wise to unplug old systems and plug in new systems and say, 'OK, we're going,'" he said. "Paralleling is still necessary."
4. Focus on communication
An ERP implementation best practices list wouldn't be complete without a focus on communication.
Communication is especially crucial because ERP deployments are horizontal projects that affect every corner of a company, Gemereth said.
"An ERP rollout is not an IT project," he said. "It's a company project."
Communication is a component of change management, a core best practice that Third Stage Consulting adheres to, Kimberling said.
Regardless of whether a deployment is on premises or in the cloud, employees need to know how the software changes their jobs and then be trained on those new tools, he said. This can go a long way toward determining how effectively users adopt a new system.
5. Know when to wait
Business processes have become so complicated, and the average company has so many more applications and systems it's relying on that the post-deployment stages of integrating processes and bringing people up to speed have lengthened.
In light of these realities, CIOs should consider patience a best practice, Kimberling said. Sometimes, companies would be better served by resisting the urge to do something now when now may be too soon.
"It may be that processes are broken or people aren't trained that well," Kimberling said. "Tackle that first, wait a few years for these cloud solutions to mature and you'll be in a better position to leverage technology."