Laying Plans for ERP Implementation

So, your company have decided to upgrade your Accounting and Inventory software to a new ERP system. You have sent out invitations for Vendors to present the system to your company. What else is there to do? You would need to plan for this change.

Upgrading the Accounting and Inventory software is a big project for a company, but with a high potential for failure if not done properly. Survey shows that 50% of all ERP implementation fails. Therefore, your company cannot afford to fail by not planning for the ERP implementation.

To quote the famous strategist Sun Tzu:

“The general who wins a battle makes many

calculations in his temple ere the battle is fought.

The general who loses a battle makes but few

calculations beforehand.

Thus do many calculations

lead to victory, and few calculations to defeat:

how much more no calculation at all!

It is by attention

to this point that I can foresee who is likely to win or lose.”

The Moral Law

Maybe you are a business owner who after seeing your friend using smartphone to view reports, decided to change the system. Maybe you are a operation manager who newly joined the company and see that the software is using DOS and a lot of excel documents and then decide to change the system. Or it maybe your boss who asked for the upgrade.

However, to upgrade the ERP, it cannot be just one person that decided and push through for a new system. There have to be a solid and beneficial reason for the ERP implementation. One have to first setup the overall objectives of the ERP system, for each levels of the company. These level would include management, operation managers, as well as entry users.

Once the reason for the upgrade has been identified, everyone need to be briefed about this reason for change and then be made to be committed to making this happen. Top management need to commit time and resources. Operation managers need to commit time for study and advice on process flow. Entry level positions need commitment to learn new system and reports.

ERP implementation is a big process. It cannot succeed by itself, or with just a small group. It would need a whole company’s commitment to ensure it’s success. By identifying the reason of the upgrade, and ensuring everyone knows the direction and aligns themselves to the change, then the ERP success would be much closer.

The Commander

To direct the ERP project towards success, the project would need a dedicated project manager for this implementation. Too often, this position is given to the ERP Vendor, but this is not recommended. The vendor’s project manager may not have the objectivity to think for your company first. Your company should assign a Project Manager from within your internal staff, to ensure the company view is taken care of.

The Project Manager role most often is given to the IT Manager or the Operations Manager of the company. This Project Manager should have the following attributes:

• Wisdom to understand the current and future operation process of the system, and the objective of the software and the future direction of the company.

• Sincerity in giving the best for the company

• Benevolence in getting everybody’s view and ensuring no one is left behind or disadvantaged during the process

• Courage to make difficult decisions and choices when encountering problems and bottlenecks

• Strict in ensuring new policy and schedules are met

You cannot have too many project managers for the project. Too many cooks spoil the porridge. When evaluating the project manager, one have to know that not everyone is suitable for this task. So, you have to decide carefully to ensure your company allocate the best person for this role.

Heaven

Preparation for the ERP project need to include creating a schedule which is in line with the company operation calendar and the resource available. ERP implementation is a disruptive force for the company. Therefore, one need to schedule the implementation to minimize the disruption to the company.

For example, if you can time the Accounting module start date to be after the year-end closing so you do not need to migrate or re-keyin the initial year’s transaction. Your Inventory and Point of Sales systems also should be migrated after Raya sales, so reduce need for staff to learn new process flow and system during peak period.

It is important to factor in the additional time and resources needed for studying, training and implementation. If you overwork the people during the implementation, you not get the result you want but get more mistakes or problems. By preparing the correct schedule that will fit the business operation calendar, you will be assured of getting sufficient resource to focus on the upgrade.

Earth

One of the reason to upgrade your company software is to get a better system. To know what is better, you have to first understand what is the current software capability. Is this a standard system, or was the software modified before? Is there any special feature that is good in the current system that you wish to retain similar in the new system? What are the documents, reports, import/export and entries that the company are using? By understanding what the software is now, you can plan for what the software should be in the future.

Similarly, one would need to prepare and identify is the business and process flow of the organization. From quotation to payment in purchasing, to order and billing, as well as new item registration and commission calculation, one would need to be fully aware of the operational process of the company. This way, one can identify what new ERP software need to handle.

Another thing to prepare is the hardware and the IT infrastructure of the company. Do you need a better client PC to handle the new system? If you are targeting a web-based ERP for better control over multiple locations, you would need to check the availability of internet or data transfer procedure in all the locations. You may also need to purchase new servers for the new ERP system. Please do necessary preparation to ensure there is sufficient manpower and budget to handle IT requirements besides the ERP software itself.

Method and Discipline

Method and discipline is needed for the success of the ERP implementation. The project manager need to ensure the division of tasks among the company structure, ensuring each group leader is sufficiently capable of handling their operation task, and therefore, able to enforce the new process and system to the next level. The department head need to commit in making sure individual migration or training timeline is met for the ERP schedule.

There maybe resistance to change the software or the process by some levels in the company. The ERP system implementation would fail if the end-users are not involved from the start and in the end refused to accept ownership in the end. We would need to ensure we prepare sufficient case for upgrade of the system and keep the discipline of those responsible to be involved in the change process.

Finally, for the project, the company need to plan the communication path between the project manager, departmental person-in-charge, as well as with vendors, top management and end-users. Poor communications prevent different parts of the organization from assessing how they will be impacted by the changes in processes, procedures and systems. Planning the communication is vatal to managing change in a corporate environment.

Conclusion

Upgrading your current Accounting and Inventory system to ERP is not an easy process. You would have a better chance of a smooth and successful implementation if you prepare well for the project.