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Essential Steps for Choosing an ERP

When looking at the essential steps for choosing an ERP, we have compiled a shortlist that we believe are the most important aspects.

 

Clear ERP strategy

When it comes to implementing a new ERP System, you must have a clear vision of the journey you are about to embark on, understanding the system and what it needs to deliver. By developing a clear and concise strategy, you will be able to categorise costing, and the potential ROI by clarifying functional, organisational and geographical scopes.

Upper Management Support

This sounds like an obvious step when considering an ERP Strategy, but unfortunately, the importance of this is sometimes underestimated. Regardless of if you have the best ERP System for your organisation, without the right support from management, it increases the failure rate significantly.

Support doesn’t just mean approval, upper management has to be actively involved in all steps to ensure the strategy is implemented properly. When the topic of implementing a new system or upgrading your current system, it is very important that the manager truly gets on board to support the transformation, even if there is a short term cost for a system.

Understand the Total Cost of Ownership

When discussing the sales cycle with your vendors, sales representatives always seem to downplay the costs, and more importantly the risk of implementing an ERP System. That is why it is essential that you and your organisation makes sure about the cost of the product to ensure there are no hidden costs later when you are committed to the project. Ensure that you have the information on implementation costs, hardware upgrades, backfilling your project team resources, software maintenance, etc.

Consider the Vendor’s Reputation

This can be the most important step in the process, without the right vendor, you may be heading towards failure. By ensuring the reputation and previous clients your vendor has worked for may give you the comfort you need to trust them. Making sure your vendor fits your organisation is a critical step in the process, helping to increase the likelihood of a seamless implementation. Speaking to other clients can help you to make the right decision on the vendor for your organisation.

Finalising Contract Documentation.

To ensure that you and your team are happy with the contract documents, it is highly advisable that you get your documents reviewed by legal professionals, to ensure that the department is happy with everything including Intellectual Property Rights, Software Acceptance, Insurance, Confidentiality, Liability, Warranties and Dispute Resolution.

Your department and upper management must take care when reviewing these contracts to ensure you are clear on who is responsible for delivering what and when. The vendor may assume you are responsible for certain aspects which you may not have been considering to be your responsibility. This is a common cause of conflict during implementation.

To help avoid common downfalls, make sure you have the right experience and knowledge of ERP & Business management software, It’s advisable to get external independent help if you do not have this expertise in house. Ensuring you receive the right information and propelling your business in the future.

Provide the Necessary Time & Resources for Training

An ERP Implementation is not a small project, time and effort need to be spent on resources and training for the users. Inadequate User Training is one of the most common failure contributors when it comes to ERP implementations. Learning a new way of operating will always be tough, but with the right support and training, it helps to reduce the burden put on employees

 

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What Executive Management Need to Know

What Executive Management Need to Know

The quality of the management of the consulting partner does not guarantee successful implementation. In fact, it’s the quality of consultants which is the biggest part of the successful implementation,

The Estimates given by the vendor at the start of the project in terms of the duration of the cost may need to be revised at the analysis and at the design stage to set the right priorities and to set the right expectations.

The ERP implement should be focused and should be gauged towards the organisational business and financial strategy, it is very important to understand by the senior management why they are doing this implementation, that means they need to answer some key questions and they need to know the most common and important factors,

The other thing they need to consider is that if you are implementing an ERP because they want to increase management control and greater visibility across the whole organisation and across all department

The last thing is the whole origination should be engaged and the users and the management should be engaged with the partners and management should ensure that all information & feedback and requirements should be provided to the partner or consulting company in a timely manner to avoid any delays

Success and Failure Factors of ERP Implementation

Success and Failure Factors of ERP Implementation

Statistics show that an estimated 75% of ERP projects fail. This statistic is a very frightening one. An ERP Failure does not mean that your plan doesn’t go live and that you are not able to operate. Failure could mean a wide range of things, these may include.

Lack of Management Participation

One of the significant failures for an ERP implementation is the lack of backing from management. An ERP implementation is a very complex and in-depth process, and you need to ensure that everyone in your organisation is involved and participating to guarantee that your ERP implementation is a priority. Or there is an increased chance of delay or failure.

Lack of Planning

Without a sophisticated high level, advanced planning phase, your organisation can have the wrong assumptions and ideas. Or even underestimate the amount of change your business will experience. Without proper planning, due to the complexity of the software, the plan for a successful ERP implementation. As a result, details need to be specific, detailed and realistic or your company is at risk of a failed ERP implementation. Without that planning, you can be lead to unrealistic expectations.

Unrealistic Expectations

Once meeting with your vendor regularly, they will provide your management with the details. Ensuring they are aware of what processes it can enhance after an implementation. Realistic expectations are something that needs to be discussed early on in execution to make sure that management knows what benefits an ERP system will offer their organisation.

Extensive Customisation

Microsoft Dynamics 365 is very customisable, with thousands of add-ons and modules you can integrate from AppSource. However, Unfortunately, some businesses try to Over-customization which means increased cost and time spent on, integrating and customising the ERP. It is essential that before beginning an ERP selection process. The business processes that need to be improved need to be discussed and a plan in place to avoid an implementation failure

Lack of Training

Even if you have planned out well, you know your expectations and are using a standardised ERP system. To Clarify without in-depth user training, or with delayed user training far into the implementation, there is a potential for failure within your business. Businesses leave user training to the end of the project because they are so focused on other aspects. By engaging your employees early within the process, regardless of what department they work in, they will be able to learn basics and have a better overview of the system. Therefore by allowing them time to train and get used to the software.

At DFSM Consulting we are renowned for successful implementations. As we ensure that our clients have a broad understanding of what entails in an ERP implementation to ensure both parties are equipped.

With the right information for a successful implementation. At DFSM, we allow your organisation to take ownership of the ERP Project rather than just receiving another product from any vendor.

If you are concerned, you have a failing ERP implementation; we can provide you with a strategic planning session to discuss options and solutions. Contact us Today for more information about ERP implementations.

 

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