How to save time and money implementing a new ERP (Business Information system)

by Tom Lyttleton – 10/24/2018

Much of the work Jim and I have done over the years has involved trying to repurpose ERP implementations that have stalled or implementations that have delivered less than promised or expected.  Generally turning these projects around is very challenging and politically charged.  A great resource for what to do in these cases is Todd C. Williams’ book, Rescue the Problem Project.  Todd is a connection on Linkedin and I always look forward to anything he posts.

Going rates for vendor-provided ERP consultants are in the 175.00 – 225.00 per hour, or more range.

How quickly an SMB implements a new ERP system successfully, could be from about 4 months to 2 years. Complexity and preparation are the keys to the timeline.  Refinement should continue constantly.

One of the areas for analysis is the time required from the SMB’s internal team.  In addition to requirement elicitation meeting times, there is training and research, finding new best methods.

It is absolutely critical that the sponsors of the project are fully aware of all the risks, both positive and negative.  Many implementation projects fail miserably from an SMB’s simple lack of understanding of the effort required to implement a new system.

In the following scenario, the C-Suite executives of an SMB are thinking it may be time to implement a new ERP.  They have read my previous blog and have the current business processes mapped in Visio and all other issues clearly documented.

The SMB is ready to send out an RFP to the short list of prospective vendors.

The RFP(s) should include the name of the current ERP data to be migrated.

The Visio diagramming of the minimum required business processes, plus any “nice to have’s” functionality.

The RFP should include requiring software pricing and per hour consulting rates charged for implementation.

Require a demonstration of the solution with sample data configured similarly to the Visio diagrams provided in the request. This should not only include the C-Suite executives but the SMB team players who actually do data entry or inventory control functions etc..

If there are multiple vendors involved in one overall solution, insist a representative of each of the solutions vendor partners attends the demo, at least virtually.

One of the more challenging aspects of ERP system implementations is the handling of multiple vendor information systems.  Building a system for instance with a cloud-based CRM an on-premise ERP server, web store etc. can get out of hand with the inexperienced.  For the SMB’s vendors, you are one of many projects the vendors’ implementation team is working on.  The SMB’s Project Manager makes sure the vendors are communication and accomplishing any needed integrations.

Once the best of the RFP responses have been selected, a preliminary scope of work must be agreed to prior to signing any contracts.  The implementation process is generally not completed the first pass through.  This is an iterative process and the ERP should be regularly subjected to evaluation for process improvement.  The initial scope should be limited to setting up a barely functional skeleton of the new ERP.  This gives the SMB team the opportunity to work for a short period with a particular vendor to test working relationships and evaluate performance.  It’s easy enough to switch to a different configuration vendor if the parties cannot work effectively.

The winning vendor(s), prior to contract signing, should provide all import templates available for the SMB’s existing data, Chart of accounts, Vendor lists, and history, terms codes, etc. All the non-transactional data, in other words, must be easily importable.

(With these tools in hand the SMB’s Project Manager should determine who within the SMB to assign the population of the data templates to.  The current in-house ERP expert for instance.)

With the templates completed and agreed acceptable by the vendor.  Sign the contract with an acceptable scope of delivering the basic framework of the new ERP

The above completes the framework of a basic, bare-bones configuration. By being prepared with correct configuration data, your Project Manager has saved countless “consulting hours” by knowing where to go and how to prepare the data.

Next step is to import some or all of the transactional data.  Once this is done the PM and the internal team will have a test ERP system to start familiarizing themselves with the new features and functionality.

With the play area as I like to call it available, SME’s should take time to engage in any online training available to familiarize themselves with how tasks are performed and review reports and dashboards.  The feedback gained during this time is critical to the next stage, customizing, configuring, personalizing, the product for the SMB’s business processes.

At this point prioritizing any customizations of the core ERP can be determined by the SMB project sponsor.

With the sandbox in place, on more complex projects, outside integrations such as shipping, sales tax, asset management etc. can be tested and SMB verified.

There are some things that the SMB will have the Vendor consultant do and others that internal personnel or a contract consultant might be able to accomplish less expensively.

Custom reports and or dashboard are an area where the SMB should determine if existing team members should be trained, if necessary, or if outside contract consultants should be used.  Many times, savings can be realized by providing wireframes of a report or dashboard to a remote consultant.

While custom reports and dashboards are being designed, there is an opportunity to perform end to end UAT testing. This involves predesigned scripts following the business process models provided earlier.  It is a process of trying to break the ERP as it is configured.

Assuming UAT went well a decision needs to be made.  Go live with the barely adequate system or do another iteration (sprint) of enhancements.

If the choice is to go live, then transactional data must be transferred with appropriate accounting cutoffs.  While this is being accomplished do a pretend one day practice of all the functions a business goes through in a month as a readiness check of operations personnel.

This phase of the project is really the handover phase.  In my opinion, this is the time SME’s within the Enterprise should start taking over ownership and enhancements.

The final step the Contract Project manager must perform is handing over all notes and documentation that have been collected.  This information will provide great documentation for continuous improvement.

In the long run, having an ERP implementation experienced, project manager saves the cost of some of the vendors consulting fees.  The SMB, by having a dedicated full-time credentialed project manager, highly reduces the chances of a failed implementation.  The upside includes the