You’re in business because you want to do what you love for a living, not look at reports and charts all day. That’s why you need an ERP system, or enterprise resource planning system. So, what is ERP meaning and why is it so powerful?
An ERP system is a type of business software that simplifies accessing and using your company’s data. The ERP system connects to your business’s individual software programs to pull in data into its own dashboard. Centralized data often includes eCommerce accounting, warehousing, inventory management, shipping and handling, and more.
While you’ll still be looking at reports in an ERP system, the idea is that it reduces the total amount you need to look at. Saving time is one of the many benefits of an ERP system.
As you’re going through ERP system examples, request a demo with each company you’re interested in. ERP systems are expensive, so they’re only worth the investment if they integrate with your existing software and you feel comfortable using them.
After you’ve reviewed the top ERP systems and know which one you want to buy, you need an implementation plan. Keep reading for actionable tips on how to implement and test your ERP system.
What Is ERP Implementation?
ERP implementation is the process of successfully integrating ERP software into a company’s operations. This follows the purchasing of ERP system licenses and scheduling implementation kickoff meetings.
Due to the number of external programs feeding into an ERP system, it’s necessary to break the process into manageable steps.
First, we’ll look at what’s required in an ERP system implementation; second, how staff can support user adoption of a tool; third, how staff can troubleshoot potential problems.
BPR in ERP Implementation
BPR stands for business process reengineering and it’s a foundational aspect of ERP software implementation. Business process reengineering is examining every aspect of a company’s processes to eliminate any obstacles that stand in the way of optimal productivity. It dives into core functions and goals of a business, like products, sales, target markets, output, speed, and efficiency.
In some instances, BPR may prompt you to revise your eCommerce business plan. It makes little sense for company documentation to point employees in one direction once you know future work is heading in another.
BPR gets a lot of attention because ERP systems offer the most value when existing business processes align with ERP system features. Businesses may attempt to incorporate an ERP system without BPR, but this risks operational and informational bottlenecks.
BPR is only one component of successful ERP system implementation. It may also be completed before implementation or in the midst of it, depending on a business’s needs. Let’s look at the essential stages of ERP system installation, user adoption, productivity enhancement, and troubleshooting.
ERP Implementation Phases
There are several phases of the ERP system implementation process. Let’s break each of the following phases down and talk about the action steps required:
- Documentation and planning. Documenting your business’s processes needs to happen before an ERP will be effective. This includes every aspect of daily operations. Examples include warehouse packing procedures, sales funnel creation and management, and eCommerce marketing campaigns. As each company process is documented, a custom ERP solution can be drafted.
- Building and stabilization. This stage is where ERP functionalities are configured to match business processes. The ERP’s dashboards, workflows, and automations are tailored to fit eCommerce KPIs as well as the company as a whole. Building and stabilization often rely on specialized knowledge from at least a few IT staff members within the organization. This minimizes usability risks and shortens the timeline prior to deployment.
- Deployment. This stage is everyone's favorite part, where the software is rolled out for employees. Deployment offers end-users the opportunity to test processes and verify that features are working as expected. This may be done in sub-phases or onboarding all users simultaneously.
- Monitoring and analysis. After the ERP system is up and running, it’s important to keep things that way. Continuously monitoring that functions produce the desired results and all technical issues are resolved is part of success. As employees grow increasingly comfortable with the ERP system’s processes, you can generate relevant reports and demonstrate the ERP system’s effectiveness.
Most importantly, remember that your ERP system implementation phases should fit what your business needs. Whether you’re selling wholesale, selling food online, or selling other high demand products, the tool should be conducive to your success. There is no exact science for ERP implementation; only past examples that have worked well.
Be sure that your in-house IT staff have the resources and contacts they need to collaborate with any third-party services. This is often the difference between a smooth, friendly transition and a difficult, stressful one.
ERP Implementation Approaches
If it’s your first time implementing an ERP, it’s natural to wonder whether or not you’re on the right track. While the systems, technologies, and outcomes of each organization differ, there are three basic implementation approaches to be aware of.
Let’s look at each type in detail:
- Express or out of the box. An express implementation means as soon as documentation is complete, the software is deployed for users. Express timelines are typically used in small organizations or where only a few licensed users exist. They are also leveraged in high-growth environments where speedy access to the software is imperative. It’s also easier to accomplish with smaller supply chains or simple business processes.
- Standard. A standard implementation is just as it sounds--normal timing and processes. Each phase moves at the usual speed so critical information can be accounted for. Users are given access to the ERP once the infrastructure is verified and BPR is complete.
- Advanced. An advanced ERP implementation is for complex organizational requirements, large businesses, or both. This implementation approach is relevant for multi-campus companies, large remote organizations, or dozens or even hundreds of licensees.
ERP Implementation Process Flow
An ERP implementation process flow is a visual flowchart of all the steps executed in the software’s implementation. It’s an easily digestible way of presenting the key activities that need to be accomplished for the implementation to be a success.
It’s similar to a warehouse management process flow--the same type of document for daily warehouse activities. Warehouse managers and staff use a process flow to streamline operations, educate new employees, and ensure peak profitability.
Successful ERP Implementation
Pulling off an ERP implementation successfully is no easy feat. There are processes to streamline, data to transfer, applications to integrate, and timelines to execute. Keep reading for additional details on what this looks like.
Describe Various Strategies of Successful Implementation of ERP
Everyone wants to buy shiny eCommerce software that helps their business run efficiently. Unfortunately, fewer people want to work through the complexities of getting it set up and operating. This is why modeling your own ERP implementation efforts off of previous companies’ work is smart.
Individual cases of ERP implementation and deployment differ, but they all follow a pattern. Staff are needed to plan stages and collect information, transfer data and connect applications, and ensure operability and regular use.
Here are useful examples of ERP implementation strategies:
- Create a task force exclusively for the implementation. Reaching out to employees who you know would take responsibility is one approach. Confirm with each dream team member that they’re up for the task, of course. Depending on how large your organization is, you may need to create dedicated time for the implementation. Some organizations can handle it without putting off existing work, whereas others may need exclusive time for the task.
- Select one employee from each relevant department. Another approach is choosing a staff member from each team. This way, you have a point of contact (POC) for production, warehouse organization, marketing, sales, IT, management, and any other department. Individual employees then act as the liaison for their teams, relaying critical information into the ERP infrastructure.
- Choose a few staff members to oversee most work, and work with a consultant on the rest. In particularly large or busy organizations, managers will hire third-party consultants to handle the implementation. While it comes at a cost, this can be entirely advantageous. In-house employees in contact with the consultancy will give the consultant all the information they need to do their work, so they can focus on their own work. Of course, meetings and updates are part of this approach, but it saves individuals tons of time in the long run.
- Outsource as much of the implementation as possible. If your team is strapped for time or simply doesn’t want to risk mistakes, outsource your implementation. Many ERP companies offer this for an additional cost. Alternatively, you can hire a third-party IT consulting company to fulfill the changes.
Companies That Implemented ERP Systems
As the world grows increasingly reliant on technological systems, so too grows the need to channel the sheer volume of information coming from them. This exponential complexity prompts many companies to turn to ERPs.
An ERP allows employees to continue delivering value in what they specialize in, without needing to process tons more information. To get an idea of how your business could leverage an ERP, it helps to see other companies that have already made the switch.
Here are just a few companies that implemented ERP systems:
- Boeing (aerospace manufacturer)
- Colgate-Palmolive (household and consumer products)
- RAS Logistics (distribution and shipping services)
- LG Electronics (consumer electronics)
- Fuze (cloud-based work collaboration software)
ERP Implementation Failure
So your ERP is finally operational, people are starting to get used to it, and suddenly--something breaks. An entire feature abruptly shuts down, data goes missing, or some other problem crops up instantaneously.
What can you do to fix whatever issue it may be? It’s wise to have a troubleshooting plan in place before anything happens. Even if nothing bad occurs, you’ll have a way out of it if things go south.
Here are some plug-and-play remedies for everyday ERP problems:
- Save any work you can, close the application, and reopen it. Many insignificant tech issues can be resolved simply by relaunching the application. Sometimes your computer runs out of memory or needs some other functionality to be refreshed.
- Save and close the application, close any other open applications, and restart your computer. This solution is most common if a software update was installed, but your computer is struggling with it for some reason.
- Verify that your ERP’s process flow matches current daily operations. While the process flow may have worked when your ERP was implemented, it may not work today. A different software program may have become incompatible, or maybe crucial information is missing from some step. No matter the situation, retrace your digital steps to uncover what went wrong. Often a simple review of your latest process will reveal what needs to be fixed.
- Submit a support ticket to your in-house IT team. When the above methods fail, IT employees can often figure out what happened. Give them as many details as are relevant so they know how best to solve the problem.
Of course, if your ERP’s dysfunction extends beyond simple problems, you should bring in a professional. Contact your ERP provider for enterprise-scale solutions or anything that your company’s staff can’t resolve.
ERP Implementation By Industry
ERPs of different sizes are applicable for varying industries. As a result, what supports one line of work may not work for another.
Businesses in the location-based services industry may need a small ERP that streamlines all of their service data. Businesses that sell cloud computing services often have very different needs and require a different implementation process accordingly.
Below are the three primary implementation formats, based on industries they work well for:
- In-house only. Choosing ERP software that only needs to run in an office can work really well for certain types of businesses. This includes manufacturing facilities, production warehouses, and equipment shops. Since employees must be physically present to work, there’s no need for cloud-based ERP functions.
- Cloud-based only. Industries that work fully remote through the Internet need cloud-based ERP implementations. At times these can take a little longer because communication isn’t as simple as walking to another cubicle. When up and running, these implementations can be emotionally gratifying.
- A combination of the two. If your organization’s employees are split between offices and remote locations, this is often a no-brainer. Getting the entire company on board with brand new software can take a couple of weeks to several months, depending on the goals outlined in your documentation stage.
ERP Implementation In Manufacturing Industry
Industries vary widely, which is why the ERP implementation process can differ so much between them. Implementation work can even vary between separate companies within an industry, like manufacturing.
If your company is small and only produces a few products, your ERP implementation can probably be finished in a few weeks. If your manufacturing business produces hundreds or thousands of products, or across multiple warehouses, you’ll definitely need an advanced implementation structure.
The implementation process you follow for your manufacturing needs depends on multiple factors. Discuss with your ERP’s representative how best to accomplish your onboarding.
How Much Does It Cost to Implement An ERP System?
The average ERP implementation cost is around $7,000 per user. Given all that ERPs can accomplish, it should come as little surprise that the cost of implementing one is a serious investment. Expenses vary significantly between companies, so make sure to independently research any service you’re interested in.
Generating Long-Term Success
When all is said and done, ERP implementation is a daunting task that yields exponential ROI. It takes considerable energy, focus, and consistency to get multiple employees on the same page with a company-wide tool. Be proud of yourself for incorporating software that will help you increase eCommerce sales or make more wholesale sales.