12 Sep 3 Key Steps to Mitigate ERP Implementation Risks
There may be no ERP horror story greater than that which happened with Target’s 2013 launch in Canada, which was so catastrophic that within two years Target Canada had filed for creditor protection. Not insignificant among its many launch challenges were the massive ERP implementation issues it faced. Small oversights like product dimensions being recorded in inches rather than centimeters quickly ballooned when multiplied across 75,000 products, and it was later determined that information entered into their ERP was accurate only 30% of the time. Though Target Canada’s numbers are particularly egregious, it’s estimated that only 10% of ERP implementations succeed with full functionality. Any implementation of Enterprise Resource Planning (ERP) software, it seems, will involve risk.
It is important to note, however, that it’s not all doom and gloom. Most of the steps that you can take to reduce ERP implementation risks are reasonable and, perhaps somewhat surprisingly, do not revolve around the technical channels of the project. When you enlist the help of an experienced and highly skilled partner, you will find the technical side of the project easily covered. As a business, you are best served by focusing on these three steps to proactively mitigate ERP implementation risks.
#1. Identifying and Creating Key Process and Project Documentation
Perhaps one of the biggest challenges faced in an ERP effort comes in the form of concise project documentation—or lack thereof. Many problems in the beginning stages of an ERP implementation stem from one thing: the key business processes companies want to include in their ERP system are siloed, or worse, not documented outside of being an “unwritten rule.” Many ERP implementation challenges can be eliminated by taking the time to document these processes before developing an implementation plan.
In our work with clients, we force them to take a step back and see an all-encompassing, overhead view of all of the business processes that they need to have documented. When you do this, and have your process documentation at your implementation team’s fingertips, they can move quickly and decisively on any issue or challenge that may come to light during the project. This also guards against ERP implementation risks like project timeline extensions, which a lack of documented processes will most certainly cause.
However, this cannot be accomplished simply by working directly with your implementation team. Additional help from within your company will be required.
#2. Partnering with Internal Stakeholders
You cannot have precise and clean documentation about your organizational processes without bringing all business stakeholders to the table. You will want to query your finance department, for example, about what vital processes they will need for the project to meet their business requirements. You would also want to engage the VP of Logistics to determine distribution and supply software requirements and improvements that they wish to see. This buy-in from all stakeholders, at all stages of the project, is important on a few different levels.
- Process discovery is more conclusive. This is about discovering the unknowns in your business processes to help in reducing surprises that could delay or derail your project efforts. This also is an opportunity for the business to streamline and eliminate outdated and unused processes, which will cut your project timeline and reduce overall ERP implementation risks.
- Risk analysis is accurate and more representative of the business processes in place. A conclusive and in-depth process discovery period with business stakeholders will allow you to work with your partners to determine business risk factors in order to proactively mitigate risk beforehand.
- The contingency plan is realistic and accurate. You will need to have a contingency plan in place, and it must represent the processes you have discovered to reduce the risk of a business failure. By using key stakeholders alongside your ERP consultants, you will have a plan that covers all of your bases.
Ensuring that your stakeholders’ contributions are recognized as being necessary and valid (which they most certainly are) will help keep them engaged—which will be especially important when you start walking through the ERP implementation plan.
#3. Walking and Talking Through the ERP Implementation Process
Now that you have discovered and documented the necessary business processes in your organization and have engaged your key business stakeholders in tracking down and validating that information, it is time to develop an effective implementation walkthrough for both the project team and your internal stakeholders. Your implementation partner should guide your project team through the steps needed to gather all of the information, including your business processes, project documentation, project staff, and stakeholders. They will then work with you to put it all together for your entire organization to see the big picture.
The walkthrough process should include not only the nuts and bolts of implementation (business processes or technology needs), but should also have a clear communication process in place to make any changes or requests transparent to your business users. A strong implementation partner will take the lead in presenting a roadmap to your business that clearly outlines the project’s next steps and actively engages stakeholders. This big-picture early walkthrough will make end-user training easier and more effective, keep the business stakeholders in the loop, and maintain the ERP’s implementation’s alignment with business goals.
It is here that the time and effort invested into your ERP implementation project will show. Conversely, it is also here that a lack of time or effort on the part of project resources will also be seen. This is why it will be vital to have a third party with a proven ERP implementation track record working with you to help drive your project forward.
Choose the Right Partner to Mitigate Your ERP Implementation Risks