Is your business ready to implement an ERP system?
So you’ve put together your ERP Selection Team and think your company is ready to implement ERP (enterprise resource planning), but are you sure? While an ERP implementation can be a key element of your company’s growth, if you’re not truly ready, it can be a costly and time consuming undertaking. Some consulting firms estimate the ERP implementation failure rate at 50-60% with cost overruns of up to 100%, therefore it is critical to do your due diligence to ensure that your entire organization is prepared before making your decision. Check out Computer World’s article back in August 2011 on Epicor’s failed implementation and subsequent lawsuit. Upfront preparation, clearly defining goals and expectations, and doing your due diligence help to ensure that your ERP implementation is a success.
In the first post in our series - "Selecting ERP for Your Small to Medium Sized Business," we outlined the steps needed to develop a successful cross-functional selections team. In this second post, we focus on assessing your company’s ERP readiness, and provide a questionnaire that can be used to guide you through the decision process.
Assessing Your Company’s ERP Readiness
There are many things to consider when reviewing and implementing ERP systems. Assessing your company’s readiness is just one step, but an important one. Having a good survey of the organization’s preparedness to undertake such a big project helps you to predict whether or not it will be successful. For instance, if your executives are not convinced of the need for ERP, then it is unlikely that they will be supportive if issues arise during the selections process or implementation. Similarly, if key user groups aren’t willing to make changes, then their use of the new system will be limited, deeming the implementation a failure. And if goals, expectations and anticipated ROI are not clearly defined, then it’s not possible to measure the success of the overall project.
To help you assess your organization’s readiness for ERP implementation, we’ve compiled a list of questions you should be able to answer positively and thoroughly before embarking on your project.
What is your motivation for implementing ERP? Is there pressure across the organization? Without pressure throughout the company, there will be little motivation for change.
Are your business processes standardized across all departments and offices?
Have key stakeholders documented specific needs and wishes? Are all business requirements documented in one place? Are they prioritized?
Has an ERP strategy and change management been fully identified and documented?
Has your company had significant turmoil in the past few years? Examples include management change, layoffs, other IT projects, etc. Are you still recovering from it?
Does the ERP implementation have executive sponsorship?
Have you assembled your selection and implementation team? Have you appointed a Project Leader?
Have you identified early system adoption users (initial key users)? Early adoption is critical to the success of your implementation.
Do you have documented the business case, assumptions and anticipated ROI?
Have you outlined your key performance indicators (measurements of success)?
Is the company culture open to the project or will key stakeholders have to be convinced of its usefulness and ROI?
Is your ERP Implementation project fully funded - including miscellaneous and unexpected expenses (plan for about 10% for additional programming and miscellaneous expenses)?
Is your data ERP-ready? The data going in is only as good as the data coming out.
Implementing ERP can be a great way to help your company compete on a national or global scale, if implemented properly – start to finish. Don’t underestimate the importance of assessing your company’s readiness, and if you’re not ready, start preparing for the future now!
Once you determine you are ready to begin the process, you will want to Define Your Business Requirements, which we will cover in the next post.
If your company is getting ready to select a new ERP system, be sure to subscribe to our feed and check back frequently for the next installment! You can also contact us to talk about your business goals for your move to ERP.
