Are you wondering how to conduct ERP implementation successfully in your organization?
ERP implementation is as critical as the selection and development of the ERP software that suits your business needs. But not many organizations do it right. According to an estimate by Gartner, 55% to 75% of ERP projects fail to meet their goals. You certainly do not want to fall in this ratio.
Read on as we explain how to undertake the ERP implementation process in your enterprise.
ERP implementation is a complex process of analyzing the current and future business goals, current business processes, and human resources.
It involves planning a new system to streamline and manage operations, introducing and developing the planned system, testing it for important KPIs, and deploying it for end users.
It also includes training end users to use it effectively and boost their productivity.
An ERP system integrates various business operations and offers a consolidated platform to manage human resources, finances, sales orders, customer service, inventory, etc.
Effective integration and data availability are of utmost importance for a successful ERP implementation to meet its goals.
You need to undergo the following ERP implementation steps to conclude it successfully:
Building an ERP System Implementation Team
You require a competent team to take up the process of ERP implementation professionally. The team can include a project manager, an ERP specialist, along with senior management from different departments that require ERP implementations.
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You also require software application developers for required system customizations, a data analyst to prepare and migrate your business data, and a QA engineer to test the working and performance of your ERP application.
Deciding the ERP Implementation Scope
An ERP system can help with multiple use cases. You have to carefully outline the objectives of using ERP software in your organization. Identify the goals you want to achieve via an ERP solution.
Your ERP project team would conduct a requirement analysis identifying the improvements required, for example, better visibility into processes, advanced data analytics, business intelligence for better decision-making, tracking of business operations such as material delivery, etc.
According to statistics, 35% of businesses stated increased efficiency and 29% of businesses claimed cost advantage as the top reason for ERP implementation.
You should also identify the current limitations in your existing system via your business’s key performance indicators and plan future ERP implementation that aligns with your business objectives.
At this stage, you would also take into consideration the associated risks of introducing a new system in your organization. For example, how well is your team prepared for this change? The associated ERP implementation cost is another major factor to consider.
Selecting the Right ERP Software
You and your project team would make decisions regarding the ERP system that suits your business requirements.
Off-the-Shelf ERP Systems
You can either opt for an on-premises ERP system or a cloud-based ERP solution for your enterprise.
An on-premises ERP software implementation requires installation, configuration, and maintenance of ERP software and hardware on your site. With cloud-based ERPs, you rely on external vendors to install and configure your ERP solutions, etc. 62.7% of organizations opt for a cloud-based ERP.
Different ERP systems fulfill different requirements. Although all the prominent ERP system examples offer an extensive suite of ERP solutions like warehouse management, supply chain management, human resource management, etc., there is no one-size-fits-all solution.
There is a range of ERP solutions available in the market today. Oracle Cloud ERP, Microsoft Dynamics365, NetSuite, etc., are a few examples.
You can opt for multiple ERP solutions from these companies, integrate them for better visibility and analytics, and increase the productivity of your organization. Read more on the available ERP systems in our blog here.
Custom ERP Development
You might feel that available ERP systems do not fulfill your specific business needs. You always have an option of custom ERP software development. There are also ERP solutions that allow you to perform extensive customization to them depending on your business goals.
You need a component team of software developers and testers to perform successful ERP software development and customization. The developers should have the following skills for successful custom ERP development:
Backend Development Skills
These software developers should be skilled in ERP development using web development programming languages, frameworks, and tools. For example, you developers can use the following for custom ERP development:
- Your developers should also use JS frameworks like Angular for the front end and Node.js, a runtime environment to build and run scalable web applications.
- Python is a universal high-level programming language. It is open-source and offers better readability. Developers can also extend Python capabilities with C and C++ modules.
- Your developers can also use Python frameworks such as Django to develop robust ERP applications. It is an open-source framework that supports rapid development. It offers a fully loaded framework with authentications, content administrations, etc.
Software Development Methodology
These developers should be familiar with prominent software development methodologies like Agile and associated tools like kanban, Jira, etc.
Agile is an iterative approach to the software development process. It breaks down the entire software development project into multiple phases. Each phase involves continuous improvement through stakeholder collaboration.
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Companies have experienced an average 60% increase in revenue and profits by using agile methodologies.
Jira, an agile project management software, would offer you the following benefits:
- It would provide your project team with a single platform to plan projects, track progress, release software features, generate reports, and automate processes.
- Jira also makes it easier to locate, track and record bugs in the software.
- You can easily generate kanban or scrum boards for issue time estimation and sprint planning.
Your ERP solution customization process may include the development of APIs. 33% of businesses believe custom APIs are necessary to extract ERP data.
Your developers should be familiar with the REST API architecture. REST, the de facto standard for APIs, helps developers build software applications with scalability. Moreover, it is a flexible architecture pattern that helps meet specific business requirements.
You also need developers with expertise in GraphQL, a declarative language to query databases from client-side applications. It helps overcome the problems of under-fetching and over-fetching data as a client application can get all the required data with one request.
Your development team should also have skills in developing, testing, and documenting these APIs using tools like Postman. Postman tool offers the following benefits:
- Your developers can easily create, test, run, and document APIs.
- It offers an interactive graphical user interface.
- Developers can create different test environments and store data for various tests.
Performing Data Migration
In parallel with ERP implementations, you can start the data migration process. You need to extract, transform and load data from various sources like customer data, finance data, inventory data, etc.
A proper transfer of clean and only required data with no unnecessary and duplicate information helps in the effective streamlining of business processes.
ERP systems usually follow two approaches for data migration.
- A transaction-driven process where the legacy data is extracted and loaded into a file which is in turn loaded using the input functions provided by the ERP system.
- Active data is usually extracted and loaded into the new ERP system using a transaction-driven approach.
- A table-driven approach transfers complete tables without any selection criteria. As a result, it is a more costly approach for data migration.
Your data analyst should employ various tools provided by the ERP systems you plan to implement. For example, SAP provides a file storage system, Legacy System Migration Workbench, Business Objects Data Services, etc., for efficient data migration.
Your team can use tools like AWS Data Migration, Informix by IBM, etc., for data handling in the case of a customized ERP system development. These are managed cloud-based data management services that help businesses accelerate their data operations.
Take the example of AWS Data Migration. You get the following advantages by using this AWS service for data migration:
- The data replication and monitoring features offer high availability of data with minimum downtime during the data migration process.
- You can migrate homogenous and heterogeneous databases from Oracle, SQL Server, PostgreSQL, MySQL, etc.
- You pay only for the computer resources and additional log storage during the migration of huge databases at a low cost.
Testing the ERP Implementation
After ERP configuration and data migration, you need to test your ERP system. This includes various procedures like programming tests, user tests, performance tests, etc. A comprehensive QA routine ensures that the ERP solution is implemented as per your requirements.
Developers conduct technical tests, including unit and integration tests to ensure the code, by ERP vendors or developers, is without any faults. Developers and app testers report broken code as the most commonly occurring production bug with a 60% occurrence rate.
User testing by in-house team members ensures that the system meets all the functional requirements.
Training Your Teams
Before your ERP system goes live, your employees and team members must know how to use it. You can prepare training materials in collaboration with ERP experts and developers.
These training guides will help your team to understand the complete functionality of your ERP system and hence use it effectively.
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In the case of using a third-party ERP solution, you will make sure your IT team is trained enough to handle any technical issues that may arise.
Deploying the ERP Software
When your ERP is fully configured and thoroughly tested for its functionality, and your team is prepared to use it, it is time for your team to deploy the ERP software.
You can deploy it in stages where high-priority modules are deployed first followed by the low-priority ones.
A few things to make sure of while deploying your ERP software include synchronization of your hardware, testing all the business reports, testing the access control for different teams, verifying data migration, testing operations with static and dynamic data, etc.
Evaluating and Maintaining the ERP Implementation
You might things that ERP deployment is the last step of ERP implementation, but it is a continuous process. You will continuously monitor and evaluate the ERP implementations.
You should set KPIs to monitor your ERP operations effectively. This would help you gauge the improvement in operations, team performance, customer satisfaction, etc.
Your IT team in collaboration with ERP developers will keep up with the latest updates to the ERP software and ongoing maintenance of the system.
Ready to Invest in ERP Implementation?
As a business CEO or CTO, it is the right time for you to invest in a consolidated platform that integrates all your core business functions, providing all the right information to your team members at the right time, thereby, increasing their productivity and hence your business profitability.
There are numerous enterprise resource planning systems available in the market. You can choose one suited better to your requirements. However, no ERP system can integrate as is with your business operations. Most likely you will need some customization and configuration to use an ERP system effectively.
A team of ERP system professionals can help you better in selecting the right ERP for your enterprise and also its successful implementation.
DevTeam.Space can help you here via its field-expert software developers community. These developers are vetted for their software development and deployment skills and have built great software products for a number of businesses, including ERP solutions.
You can either partner with these software developers for complete custom enterprise resource planning software development or for customizing a ready-made ERP solution for your business.
You can write to us your initial project specifications via this quick form, and one of our account managers will get in touch with you at the earliest to discuss in detail why our developers and managers are better suited for this job and how they can help with your ERP implementation project.
FAQs in ERP Implementation
ERP implementation plan consists of requirements discovery and planning, ERP design, development, configuration, testing, deployment, and maintenance.
The Enterprise resource planning (ERP) process includes the use of a unified and integrated platform for streamlining and managing regularly occurring business tasks. These business processes can include finances, supply chain operations, human resources management, order processing, etc.
Some of the benefits that businesses enjoy from ERP implementation success include better reporting cycles, boosted cashflows, better inventory management, better supply chain management, enhanced customer satisfaction, improved employee performance, etc.