ERP implementation. Two words that make even the most seasoned business leaders sweat. With an undertaking this complex and daunting, it is imperative to break the process into smaller pieces. In this article, we will share the five-step methodology that will allow you to complete your ERP implementation on time and within budget.

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1. Want to nail your ERP implementation? Start with value planning

Before you can get to implementing your ERP, or enterprise resource planning, it is important to make sure you have done the groundwork to make it a smooth process. We strongly recommend you begin with value-planning and selection, by which we mean uncovering the high-level requirements you will use to select your software.

Start by mapping your workflows and processes in great detail (either in a document or a flowchart), then identify areas of inefficiency to target with your ERP software. Often, changes in technology are triggered by larger organizational changes, like a merger or a spike in growth. You can also go about this by listing your pain points – that is, the shortcomings of your current process. Pain points can be operational, technical or strategic.

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By making a clear link between the strategic direction you want to take your business and the technology that can enable those changes, you will avoid an ERP mishap that happens all too often.

2. Selection – how to pick the right technology to set your team on the right track

During the ERP selection process, you will want to document your business and your requirements in greater detail than in the value-planning phase. This will allow you to express your important requirements to software vendors when you are doing product demos, so vendors will show you the features and capabilities most important to your organization.

If you are not careful about briefing vendors about what problems you are trying to solve, you may receive generic product demos. Though on the surface, a product may look enticing, once you peel away the layers of detail, you might find it cannot handle certain processes as well as you assumed. The more specificity you have in your requirements during your selection phase, the more certainty you will have that your ERP system will meet your requirements upon purchase.

3. Budgeting – beware of hidden costs

It is important to understand exactly what your ERP implementation project will cost at the outset. And it is not enough to assume the quote from your vendor covers all of it. Your quote will include software costs and base implementation costs, but there are often hidden costs to your organization that you need to think about.

For example, you may need to backfill key roles to release your people so they can focus on the implementation – this means you need to add the cost of additional head count to your ERP project. You may also need to invest in new infrastructure if you need to upgrade the specs on your computers because you do not have the minimum requirements to host or run your new ERP product.

Another item that is often lost in the details is producing documentation. Some vendors will provide documentation of project methodologies, but others will assume you are creating your own training content for your current and future employees. Take the time to think through the life cycle of the implementation and note any potential costs upfront.

4. Program implementation – measure twice and cut once

You have officially signed on the dotted line. What comes next? It is important to realize a lot of vendors’ implementation methodologies are focused on setting up the technology platform, not necessarily navigating you through the organizational transformation you are about to enact.

Some vendors will provide guidance for process redesign, but these materials usually assume you are going to adopt the standard process in the system. If you deviate from the standard process with your own customizations, your team has to come up with that process design. Ask yourself if you can accept the standard process as the system performs it, or if you need to truly make a change that works for your organization.

It is best to have a steering committee or decision-making body who can prioritize, approve or reject these design items based on level of effort, hard costs and/or benefit to the business. Whether that is a virtual forum or a committee that meets in person regularly, this group

should be tasked with understanding how the project interacts with day-to-day business activities and making deliberate decisions about trade-offs to people’s time and attention.

5. Governance and sustainability – planning for tomorrow and beyond

ERP implementation is only the beginning of your journey. You are not necessarily going to have it perfected on day one, but the project will grow as your business evolves.

Here is a list of questions to revisit regularly as your business evolves:

● How are you going to keep the software growing with your business changes over time?

● Do you need to have a maintenance contract with your vendors?

● How will you measure your ongoing return on investment (ROI)?

● Do you have enough internal capacity, or do you need to hire outside help?

● Do you need a system administrator?

● Will you need ERP upgrades over time?

Parting wisdom

While ERP implementations may be tricky to pull off, they are possible. It is easy to get overwhelmed by a project as large and complex as an ERP implementation, but with a thoughtful planning process and steadfast follow-through, you can make yours a success.

ERP implementations are one of the largest, most expensive and business-critical projects your business will go through. Citrin Cooperman’s Strategy and Business Transformation Practice will help protect this investment and prepare you for a successful go-live.

Citrin Cooperman is the brand under which Citrin Cooperman & Company, LLP, a licensed independent CPA firm, and Citrin Cooperman Advisors LLC serves clients’ business needs. The two firms operate as separate legal entities in an alternative practice structure. Citrin Cooperman is an independent member of Moore North America.

Smija Simon is a director in Citrin Cooperman’s Strategy and Business Transformation Practice. She is an experienced technology and management consultant whose skills range from developing and executing strategic plans to providing world-class project management to implement solutions.

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