Once your business has decided to switch to an enterprise resource planning (ERP) software system, the next step is to implement ERP. For a business to see the benefits of an ERP adoption it must first be deployed properly and efficiently by a team that typically includes a project manager and department managers as well.

This process can be complicated and feel overwhelming, depending on the needs of your organization. However, once new software is implemented successfully, organizations will ideally see the increases in productivity and cost savings benefits an ERP system can bring to your business. The switch to an ERP system can streamline your business needs and be beneficial to both the end user and entire organization.

Steps to implement ERP 

Below is a breakdown of a step-by-step ERP implementation plan. We’ll start by going through what organizations should do prior to choosing an ERP system and then dive into best practices for implementation success.

1. Discover and plan to implement ERP

Before the ERP implementation process can occur, an organization must assess how its current systems are functioning. This is the first step to a successful enterprise resource planning integration and must be completed prior to choosing an ERP software.

In the first step of this implementation methodology, an organization must review the current system and processes to get a full picture of how the business is working and where there might be pitfalls. In this step, an ERP implementation project team should also be established for decision-making purposes. Areas to assess can include, financial, manufacturing, inventory, sales and more. This step will also be important to understand gaps and current issues, such as process inefficiencies and potential requirements for the ERP system.

Once the review of the organization’s current system, workflow, and everyday functions are assessed it’s time to select the right ERP system that meets your business requirements, such as budget forecasting and pricing. An ERP software can be acquired in this first step if the requirements have been well-defined. These requirements will depend on if an organization uses ERP system on-premises or in the cloud ERP.

A change to a modern ERP system can be very straight forward if there is a clear roadmap and project plan for your ERP deployment. A clear and honest conversation with employees will ensure organizational buy in.

Questions to ask as you define the scope of your organization’s needs:

• What business functions will be automated by the ERP software?
• What are the ERP system’s specific data requirements and is it compatible?
• Which key performance indicators (KPIs) need to be tracked?
• Is the software scalable and flexible enough to evolve with the organization’s needs?
• What is the timeframe for implementation and deployment?

2. Create a design and prepare to implement

At this point you’ve chosen the ERP system for your business. The next step is the design phase. This is the step to configure the ERP software solution so it fits your organization’s specific needs.

A new design requires change management to make more efficient workflows, along with the potential need for new business processes that are a better fit with the soon-to-be implemented ERP system. It’s important to have a team within the organization dedicated to this design step and determining an appropriate plan.

Steps to configure the ERP system:

• Create an organizational structure by defining all the necessary aspects of your business, such as the chart of accounts, cost centers and business units.
• Customize your ERP software so that it aligns with the existing workflows in place and set up the modules you think your organization will need, such as customer relationship management (CRM), human resources and supply chain management.
• Set the parameters for user roles and permissions so that you can control everyone’s access across the system and make sure data controls are put in place.
• Integrate ERP software with other existing systems within your organization like accounting software, inventory management and e-commerce platforms if they apply.

3. Migrate and development

Once the design requirements have been established, the development phase can begin. This involves the customization of the software so that the redesign can occur. The development, or preparation, stage is vital and can be a daunting task; but if done properly, it could help your ERP system function for the long-term.

You have established a redesign, now it’s time to clean and format the current system’s data so that it’s compatible with the new system. In this step, an organization will need to assess and prepare all existing data into a compatible format that fits your new ERP software. Once loaded into the new system and formatted correctly, your first ERP test can be performed. In this step you should also monitor and note the key metrics of your business operation, including any disruptions.

Ways to plan and prepare your data for migration:

• Complete a data audit of all existing legacy systems and applications to have a clear picture going into the data migration.
• Categorize the types of data you need to migrate and identify any redundancy by combing through the data and cleaning for accuracy.
• Define what data transfer method you want to use and test it to be sure it is the right migration process.
• Make a backup plan and a recovery plan in case errors occur or data is lost.
• Create a data governance policy and put protocols in place.

4. Test the ERP system

All the preemptive steps have been taken and now it’s time to do some system testing before you go-live. In this stage, development might still occur and that is normal. The testing of one ERP module may occur and fixes or adjustments might need to be made, while other modules are being tested simultaneously. Team members should be put through user training and key stakeholders should be involved in this testing process as well.

It is vital to test the entire system and ensure its functioning properly and running data accurately. This is the most important phase because it will ensure all system applications and processes are running as they should before the ERP software is officially up and running.

Things to remember during the testing phase:

• Keep track of user acceptance criteria and document the information.
• Test the system for functionality from start to finish and validate all migrated data for accuracy purposes.
• Check for user accessibility by conducting reviews and reviewing feedback.
• Conduct all necessary tests prior to deploying the ERP software, such as testing automation processes, workflows and system security.
• Ensure the ERP system is compatible with the other existing systems and applications in place.
• Make sure all employees are trained on the system; consider implementing ERP software in stages before going company-wide.

5. Deliver a successfully implemented ERP system

If the steps above have all been taken, then great news, your organization is ready to launch its new ERP system. Assuming all employees have been properly trained on the software, it’s now time to roll out the new ERP solution.

The project team that started the implementation process should be at the ready in case employees are confused or other potential issues arise. Be prepared for issues and have contingency plans in place if there is a serious malfunction. All ERP modules can be deployed concurrently but can be done in stages as well. Some organizations might choose to prioritize certain modules and add others as they go, which is completely normal.

No two organizations are alike and deploying an ERP software can differ greatly but remember to make the ERP solution accessible to all employees and make sure automated processes are activated.

What to look for once implementation occurs:

• Is the data accurate and functioning properly?
• Do all users have real-time accessibility without issue?
• Are security protocols in place and functioning?
• Is the workflow in place and processing as it should?

6. Manage your ERP solution

Now, assuming the implementation is complete, it’s important to create a protocol for ongoing maintenance for your ERP system. Your organization should be performing regular maintenance checks and upgrading software periodically. Creating a team or having a professional in place to maintain the health of your ERP system is key to the longevity of the solution.

The ERP vendor you select should be available for any questions and ongoing maintenance or updates needed. Best practices for this implementation process should include a well-managed team and strong communication between the organization, its employees and key stakeholders to ensure the ERP solution is working effectively and efficiently.

Best practices for managing your new ERP system:

• Listen to user and client feedback often.
• On-premises ERP systems will require periodic software updates and sometimes hardware updates as well, while cloud-based ERP will update automatically.
• Create standard operating procedures (SOP) to ensure common issues can be addressed quickly.

Implement ERP solutions with IBM

IBM Consulting is the driving force behind your business transformation journey. We offer business consulting with expert advice and are all about working openly and bringing together different perspectives, experiences and essential AI and hybrid cloud technology to meet your business goals.

IBM offers a range of ERP solutions for your business, including consulting services for SAP on IBM Cloud, Microsoft Azure and AWS Cloud. Our SAP experts create custom roadmaps to lower costs and improve results. With these solutions and more, IBM Consulting experts can help you successfully migrate legacy ERP applications to the cloud, redesign processes to leverage data, AI and automation for your business, and transform finance into a competitive advantage.