5 Critical Insights for Implementing ERP

Oh, Enterprise Resource Planning (ERP), you promise so much but you’re a fickle consort. That’s the lesson we learned when we interviewed Brian Schaffner, Director of Enterprise Architecture and Infrastructure for a healthcare provider with operations on five continents.  Brian has worked and lived through his fair share of ERP implementations in companies of various sizes and industries. Whether you’re considering your first ERP implementation or you’ve been charged with upgrading an existing ERP integration, you can benefit from Brian’s mistakes as he shares the things he wishes he’d known before he started with ERP.

If only I’d known then what I know now about ERP

ToolTalkWeekly: You said the first thing you wish you’d known before you started your first ERP implementation was that not all ERP solutions are the same.

Brian Schaffner:  Some ERP vendors cater to specific industries, some and are more flexible, and some are too big or too small for your company. It’s not always easy picking a solution that fits your company and its needs. Evaluate companies by looking at their track record with companies or organizations that are similar to yours. If you are a mid-size state college – look for solutions that have done that before. You don’t want to be a vendor’s guinea pig when implementing a system of this scale.

TTW:  What if you’re migrating from an existing system to a new system?

BS:  You and your team need knowledge and documentation of the existing system. That’s key.This probably sounds like an obvious statement, but it’s surprising how many organizations have either no documentation, or the documentation they do have is nearly useless. That can be true of knowledge within the organization as well. Systems that have been around a while often evolve from what the documentation says they do. The people who know what the system does, and, more importantly, how it works – have moved on or retired.

Before you embark on your ERP quest, take inventory of what you know about your existing business, processes, and systems. You may find that you are fully staffed, documented, and knowledgeable. However, if you are like most companies, as you uncover the rocks, you are more likely to find snakes than gold. It’s important to know what you know before you get started, because once you start implementing it’s much more difficult to go back to the beginning.

TTW:  What’s a typical timeline look like for an ERP implementation?

BS:  Depending on the size of the system and company – phasing or building integration may be better than “big bang.”Many ERP vendors have solutions that will handle many, if not most or all, of your processes. This can be great for streamlining your organization and providing better service to your customers. If you are a small organization, you may be able to consume all of the changes to all of those processes in a single implementation. Most organizations, however, struggle to implement using the “big bang” – or all-at-once approach.

If you find your organization overwhelmed by the magnitude and quantity of changes taking place, look at ways to phase the implementation. Start with more simple, back-end processes like Accounts Receivable, Accounts Payable, and General Ledger. Often, those processes form the backbone of an ERP implementation – and often they are not overly customized. Many times, these are easier to implement and integrate with.

Once you have the core system running, you can build integration layers that handle getting data in to, and out of, the system. Modern integration platforms provide not only batch data loads, but also real-time messaging and synchronization across systems.
ERPorNot

TTW:  IT people tend to think in terms of impact on IT functions and internal business operations.  What’s the impact on customers?

BS:  If there are customer-facing pieces of your project – communicate a lot and often with customers.  A huge mistake that companies make when implementing new internal systems is forgetting about the external impact. Usually this means customers – but can also mean vendors, financial institutions, investors, and others who interact with you. Customers, in particular, can be affected in many ways. For example, if you change the format of your invoices – and customers have processes that depend on the invoice format – you probably just broke their process. A new system also means bugs and bumpy processes. Customers understand these issues if they know what’s going on – but if you don’t tell them, and they simply experience the issues themselves, they are likely to become frustrated or leave.

Involve your customers, and other external entities in your project. Tell them what you are doing, why you are doing it, and how they will benefit from it. If you have target dates where they will experience changes, let them know in advance. The more you let them know what’s going on, the better prepared they will be for the changes, and the more successful you will be in the implementation.

TTW:  Is ERP an inevitable part of IT operations?

BS:  An ERP platform does not constitute a holistic architecture.  Sometimes when you implement a new, integrated system – the new system brings its own technology, platform, framework, and architecture. Usually those are all necessary to make all the pieces of the ERP work together in harmony. In the context of the ERP system, that is all well and good. For many organizations, however, the ERP is not the boundary of their systems. Sometimes you have customizations or proprietary systems that need to integrate, or possibly be built into the ERP system. It can be tempting to adopt the technology, platform, and architecture of the ERP for these auxiliary systems.

Before you do that – you should consider the implications. As the ERP architecture evolves – are you willing to invest in evolving all of the systems that are based on the ERP architecture? Or are you willing to wait for ERP enhancements as you bring all of your systems up to date? There may be operational considerations as well. For example, with some systems you may have monolithic components that require the entire system to be down during maintenance. If you understand these types of implications, and can live with them, you may be okay. If not – you may need to consider other ways to design the auxiliary components.

Part 2: Five more lessons you need before you implement  ERP

Follow the discussion when we continue our interview with Brian he talks about what happens after you select an ERP solution. In the meantime, please tell us what you thought about this content by posting a comment below or email the editor.

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