Enterprise Resource Planning (ERP) is now crucial for any company to streamline their business operations. As a centralized platform, ERP is now the foundation that can integrate various business functions – including finance, human resources, and supply chain management.
While ERP systems are important, they are often implemented without proper planning and strategizing. Only 28% of companies have a successful ERP deployment – within the planned duration and budget.
A successful ERP implementation strategy is challenging and requires detailed planning and execution.
First, let’s look at 4 ERP implementation strategies that are commonly used:
1. Big Bang Approach
Also called the “single-step method,” Big Bang implementation involves moving all existing users to the new ERP system at the same time. This allows companies to execute their ERP implementation on time and within budget. However, the problem is that a single technical problem can impact all employees, leading to productivity loss.
2. Phased Rollout
The phased rollout approach involves the deployment of ERP functionalities, tools, and components over an extended period. Phased rollouts can take weeks or even months. It enables companies to avoid the risks of the Big Bang approach – and score some “quick wins” for immediate ERP benefits.
3. Parallel Implementation
In this ERP implementation strategy, companies roll out their ERP systems while continuing to use their existing legacy systems. This involves the lowest risks, as they can revert to their existing system in the event of any ERP implementation failure. On the flip side, companies need additional resources to keep both systems running at the same time.
4. Hybrid Approach
A hybrid approach is a mix of all the above strategies. For instance, companies can roll out their core ERP modules using Big Bang – followed by additional modules through a phased rollout.
Also Read: CEO’s Guide to Implementing ERP for Manufacturing Expansion
Next, let’s discuss some ERP implementation best practices for a successful deployment.
Best practices in ERP implementation
1. Understand your Business Requirements
This is a mandatory practice necessary for a successful ERP deployment. Besides understanding your business needs that can be fulfilled by ERP implementation, it’s necessary to evaluate your current workflows and processes – to identify areas of improvement.
For instance, are you struggling to streamline your inventory management? Then, an ERP system with an inventory management module can provide real-time visibility into current stocks.
2. Select the Right ERP Solution
For a smooth implementation, it’s also crucial for companies to choose the right ERP service provider and solution. Here are some factors that determine your choice of the ERP solution:
- Features – Do they align with your business needs?
- Scalability – the ERP solution must be flexible and scalable to grow with business needs. This includes growth in the number of ERP users, data, and daily transactions.
- Costs – This includes the initial licensing costs as well as the implementation costs.
3. Evaluate the Business Impact of ERP Customization
ERP customization is important to cater to the specific business needs of any organization. However, customization is also expensive and restricts access to the latest ERP updates. Hence, before customizing your ERP code, consider its business impact and cost factor.
Additionally, check whether customization is possible for various procedures – or if there are alternate methods to achieve the same results.
4. Allocate the Right Resources for ERP Implementation
For a successful ERP rollout plan, it’s crucial to allocate sufficient budget and resources for the project. ERP implementation is likely to fail without adequate human capital and finance.
Proper cost estimation and planning involves budget for:
- The ERP license or subscription
- Hardware upgrades to use the new ERP system
- Training the employees on ERP functionalities
- After-sale support and maintenance
Also Read: How to Create an ERP System Strategy
Conclusion
Depending on the size of any business, ERP implementation can be complicated but highly beneficial in the long run. For small companies, SAP Business One is easy to implement quickly. With an experienced SAP implementation partner, companies can leverage the benefits of SAP B1 as an ERP solution.
As an experienced SAP partner, Praxis Info Solutions can help implement SAP B1 as a fully functional ERP for small companies. Here’s what you need to know about business modules in ERP systems.
If you are looking for a smooth ERP implementation, Contact us today.