M A R K E T M O N I T O R R E S E A R C H S E R I E S
Implementing a Brighter Future with ERP
Tips and Insights on Making Your ERP
Implementation as Painless as Possible
PRESENTED BY:
SPONSORED BY:
M A R K E T M O N I T O R R E S E A R C H S E R I E S
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Table of Contents
INTRODUCTION ...................................................................................................3
SECTION 1: Today’s ERP Systems ......................................................................5
Analytics ..........................................................................................................5
Millennial and Mobile Workforce .....................................................................6
Company Collaboration ..................................................................................6
The Cloud and Hybrid Systems ......................................................................7
Considerations ................................................................................................7
Staying Up-to-Date .........................................................................................8
SECTION 2: Preparing For Implementation ........................................................9
Implementation Plan .......................................................................................9
Implementation Team .................................................................................... 11
SECTION 3: Misconceptions, Mistakes and Best Practices ............................ 13
Misconceptions ............................................................................................. 13
Pain Points & Mistakes .................................................................................. 14
Best Practices ............................................................................................... 16
SECTION 4: Moving Forward ............................................................................. 17
Judging Implementation Success ................................................................. 17
Evolution of the Machine ............................................................................... 18
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INTRODUCTION
It was 1990 when Gartner Co. first coined the term ERP, in reference to the emerging Enterprise Resource Planning systems of
the time. These systems evolved from traditional Manufacturing Resource Planning (MRP)-type systems used in the 70s and 80s
to centralize and integrate business information in a manner that would foster production line decision making and increase over-
all efficiency. As time went on, manufacturers saw the need to integrate their data on the manufacturing side with data coming in
through the business side like accounting, payroll and customer relationship management systems — creating the need for ERP.
Once conceived, it was thought that all-inclusive ERP software
suites running manufacturing businesses were going to be the
way of the future. Although manufacturers and software vendors
have changed the way they use, deploy and interact with ERP,
they continue to evolve with the needs of modern business.
"When I got out of college, I headed right to the manufacturing
shop floor," explains Lee Filbert, vice president of services with
software vendor IQMS. "It was a somewhat chaotic environment
of spreadsheets, paper and whiteboards — and hard to maintain
it all. I volunteered to search for the company's first ERP system.
During ERP implementation you really understand that shop
floor connectivity is critical because it allows you to set a solid
foundation for you to grow your organization and build a thriving
manufacturing business."
Was the ERP Implementation an
Upgrade to a Previous System or
a New Installation?
Upgrade to
an existing
system
43.3%
New installation
with no previous
system in place
28.4%
New installation
of ERP from
new vendor
28.4%
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Manufacturing Business Technology (MBT) recently surveyed
its readers to understand their experience with implementing
an ERP system for their business. According to respondents
of the survey, 63.4% are currently using or implementing
an ERP system, while 36.6% still are not utilizing the
technology. Out of the respondents who have been part of
an ERP implementation at their organization, 71.7% were
part of an upgrade of an existing system or an installation
from a new vendor. Only 28.4% implemented an ERP
system with no previous system in place.
This report looks at those results and includes industry
insights and tips on what to expect during an ERP
implementation including: a brief overview of today’s ERP
systems; preparing for an implementation; misconceptions,
mistakes and best practices concerning the implementation
process; and where ERP is headed.
The Top Reasons Companies
Don't Implement an ERP System
1. Company too small for ERP
2. Current systems are good
enough
3. Don't feel we'd use it
4. Don't have the manpower/
resoures to run it.
5. Too busy to implement a
new system
6. Don't feel we could afford it
5SECTION 1: Today’s ERP Systems
Modern ERP systems have capabilities that extend far beyond the abilities of traditional MRP/ERP systems of the past.
For instance, since the early 90s, Enterprise IQ has reached out to the shop floor and ingrained into production equipment to
monitor cycle times and more Manufacturing Execution Systems (MES)-type applications that slowly became embedded into
ERP systems.
One of the value propositions a modern ERP brings to the table allows a company to see how assets are performing and how
quickly the organization is able to produce products for customers from the back office. With production equipment becoming
smarter, and the advent of the Internet of Things (IoT), it's easier to pull information out of machinery and report that data back to
the main ERP system.
There are quite a few trends currently happening in ERP systems and
how companies are utilizing them. These trends include everything from
how a company deploys their system to how these systems are evolv-
ing for a changing workforce. Before a company begins an ERP imple-
mentation process, they need to know what’s driving modern systems.
Analytics
By creating a more connected organization, companies are able to
gather large amounts of data about their production, processes and
overall business. But it doesn’t do a manufacturer any good if they
don’t know what all the Big Data they’re collecting is telling them.
That’s why managing analytics is one of the biggest trends happening
with ERP systems.
“Analytics allows you to get into the information,” says Kathie
Poindexter, manager of product marketing at software vendor Epicor.
“System dashboards and visuals helps employees drill down into
the data rather than have to go look up an order. Modern systems
even have Google-like searches that ensure that you can get to your
information quickly without having to know how to maneuver through
the ERP system.”
M A R K E T M O N I T O R R E S E A R C H S E R I E S
Wait Time to Upgrade Existing System or to a New Vendor
< 1 year 5.6%
1 year 11.1%
2 to 3 years 22.2%
4 to 5 years 13.0%
6 to 7 years 9.3%
8 to 9 years 11.1%
10+ years 27.8%
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Millennial and Mobile Workforce
There is a generational change currently happening in the workforce. The industry is taking a hit as Baby Boomers begin retiring
and a younger labor market moves in to take their place. Millennials have grown-up with technology and have a different way of
interacting with the world around them, which is why ERP systems are changing to include more mobile and social aspects to
their software.
ERP vendors also have been working to make sure that their solutions can be deployed on multiple devices. It's no longer
about the system sitting in an office desktop computer. Companies want a solution that can be accessed on mobile phones
and tablets. Even on the shop floor, employees might be given tablets to get information instead of standing at a workstation.
“It's about mobility and a workforce that's more dispersed,” adds Poindexter. “Employees can monitor and work when they
need to — at the office, in a meeting, at home, on the shop floor or at the airport. Everything is very fluid and can be seen easily
on different devices. It's not just displaying a big ERP screen on a 24-inch monitor. You have the capability to size everything
properly with the right information if you have to do something on your smart phone or your other smart device.”
Company Collaboration
Another trend happening in ERP is the ability for more collaboration. System designers are integrating social tools for sharing
information that a younger workforce is more comfortable using. There is a move away from communicating everything through
email or an alert and instead toward a social board where everyone can interact with each other and see what's going on.
“One of our customers deployed that social capability with large touchscreen monitors out on the shop floor,” says Poindexter.
“They can actually write their comments about what's going on and see what other people are doing, including engineering
changes happening or when a new order comes in.”
Beyond internal efficiency, collaboration with a manufacturer's customers and supply chain, is becoming popular with
companies. Organizations are deploying secure portals so that customers or suppliers can interact directly with the ERP
systems. Gone are the days of scanning, emailing and faxing hard copies back and forth. Everything is becoming paperless.
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The Cloud and Hybrid Systems
“If you look at the rate of cloud adoption in the past five or 10 years, it is absolutely staggering,” says Forrest Burnson, a
market research associate for Software Advice, a Gartner company. “It's really interesting because traditionally companies felt
very strongly about housing all their data on premise or in-house and not outsourcing to a third party — mostly due to security
concerns. But a lot of people are starting to realize that the security concerns really aren't as serious as they once thought they
were, and it can actually be very safe. There are ways to audit vendors and to make sure that they are doing everything that they
should be doing on their end.”
Burnson also mentions that with the adoption of cloud computing and the implementation of sophisticated software that is more
compatible, he sees more companies using a hybrid strategy for hosting their applications. He indicates that manufacturers are
more carefully scrutinizing which data and applications can be hosted on premise and which can be hosted in the Cloud. “Now
it's very much a hybrid strategy that is becoming very popular for companies,” says Burnson.
Implementing a Cloud-based or SaaS system is probably going to be easier for a company than on premise, but it really
depends on what a company is currently using now, where their data is being stored and how easy it is to migrate that data to
the new system. By hosting applications in the Cloud, companies generally don’t have to worry as much about hardware or a
team member ensuring the system is up and running 24/7. Organizations are finding it less labor intensive and time consuming
to host everything in the Cloud.
“The Cloud infrastructure is a much easier solution to manage going forward as long as the connectivity is there,” says
Filbert. “Connectivity is obviously the biggest component of that infrastructure, so making sure that the organization has
solid connectivity is imperative.”
Considerations
“ERP software can easily run a company 6-, 7- or 8-figures depending on how big the company is,” says Burnson. “With any sort
of business decision like that, a company needs to put a lot of thought into it. Implementing a new ERP system isn’t like installing
Microsoft Word onto your computer. It can be a really long, drawn-out process. You have to consider customizations that you
need, how to migrate your data over to the new system, how to train your employees on the new system and how and to gain
their acceptance to use the new system.”
The ERP market has been traditionally dominated by a handful of big vendors, but there's been an explosion of vendors targeting
SMBs and focusing on specific industry niches. These vendors are coming out with really affordable cloud-based solutions to
make the software a little more accessible for businesses of all sizes.
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“It’s really a buyer’s market right now, because of the competitiveness driving the prices of purchase down,” explains Rachel
Hansen, director of professional services at Exact Software North America. “We’re also seeing customers becoming price
conscience at the same token. Because of that, companies are not buying the full robust solution that is required to become
successful with ERP. Meaning that they not only need to invest in the product, but also the services that are required for
long-term success.”
When considering an ERP system, an organization has to look at not only the company providing the software but also at
what the infrastructure of the software is, what is it based on and what its full capabilities are. More and more manufacturers
are reducing their IT staff and trying to outsource most of that work if possible. Having a fully embedded solution makes
maintaining the software much easier than having separate systems bolted on together. When going out to select an ERP
system, manufacturers should understand how all those different capabilities are being brought together by that ERP provider.
“First and foremost, consider what your current business pain points are,” adds Hansen. “That way, when you’re evaluating every
vendor, you can focus on the solution that vendor is really going to provide you. It’s easy to get overwhelmed with all the bells
and whistles, but at the end of the day you need to ask: Does the ERP solution eliminate those pain points you currently have?”
Staying Up-to-Date
Industry experts generally agree that the traditional lifecycle of an ERP system is about a decade. According to the survey
respondents, 38.9% of organizations waited eight or more years to upgrade their ERP system. But there is a growing trend not
to wait as long, as 38.9% of companies surveyed upgraded in three years or less.
“We certainly recommend that company's stay current with their software vendor and not get version locked, which happened
quite often in the past,” explains Poindexter. “You know it was just the way the technology was. It was harder to move your
customized systems and data into the technology of today. By staying current with your system, you can make use of the new
capabilities your ERP vendor is putting into the system.
“There isn’t a hard-and-fast rule that you need to look at a new ERP system every X amount years. But you should look at them if
your business changes and your current system is no longer giving you the capabilities that you need to run your company.”
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SECTION 2: Preparing For Implementation
According to responses to the survey, almost half of the companies (47.7%)
completed their ERP implementation in the five to 12 month timeframe. But not
every company will have that experience. A number of companies (26.8%) took
a year or more to implement their ERP system. The benchmark average for ERP
implementation is generally around 18 months.
“We’re currently seeing a 4 to 6 months per facility implementation time, which is
very favorable in the marketplace,” says Filbert. “But understand that that your
team is going to be involved during that implementation for those 4 to 6 months.
The implementation can go longer or shorter, but having that time commitment
put aside before you start the project is definitely required.”
Implementation Plan
The first steps in putting together an implementation plan is to set realistic
expectations, have a practical timeframe and list all of the pain points that the new
ERP system needs to address. Companies then need to figure out if they are going
to outsource the implementation process to a vendor or third-party, or if they’re are
going to try to do it all on their own. If a company tries to implement a whole ERP
system in-house, with little support from the vendor or a third-party service, it's
probably not going to end well for an organization.
Companies obviously have to set a budget, but they should also be cognizant
of how quickly and easily that budget can overrun. Plan for the worst-case scenario.
“Make sure that if you’re implementing a new system that your company has the
hardware that can support it all,” advises Burnson. “A lot of companies don't consider
that when they're upgrading their entire ERP system that they will probably have to do
some hardware updates as well. That's always something to keep in mind.”
Key Goals for ERP
Implementation
Since an ERP implementation can drain
company resources, it’s important to get
the most out of the process. Not every
implementation is successful. That’s why
starting with the right objectives is imper-
ative. Your company goals should:
• Minimally disrupt business
operations
• Improve the efficiency of the
organization
• Reduce overall operation costs
• Help increase sales or revenue
• Include a reasonable implementation
timeframe — don’t rush it!
• Have a realistic budget — make sure
to include labor and equipment costs
needed for the implementation
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Organizations should also nail down the cost implications and what the value proposition is, including ROI, heading into the
implementation process. That is highly critical because it reinforces to everyone why they’re going through the process.
Reminding the team on the business value of the process and what’s in the new ERP system for them helps to keep a team
motivated. Companies should certify that everyone in their organization understands that the new ERP system’s tools and
insights is what will drive company revenue moving forward — and ultimately, their paycheck.
“Companies shouldn’t plan for the entire system to go live on one specific day,” adds Burnson. “You want to stagger it. Maybe you'll
implement one aspect of the ERP system and then test it, making sure that there is no bugs or glitches in the system. Get whatever
team that needs to be using that part of the system trained on it. Then you can continue that process on within each functional area
of the new system.”
In general, companies should spell out their goals, set firm but flexible timelines, contingency plans and areas of responsibility.
Several project managers should cover different aspects of the implementation — from data migration, to training, to installation
and go live. Depending on the scope of each, a project manager could cover more than one area. It's also not a bad idea to ask the
vendor for previous implementation plans to gain a better understanding of how other companies have done it in the past.
Why Has Your Company Decided to Implement an ERP System?
Improve customer service 46.3%
Make employees' jobs easier 40.3%
Standardize global business operations 29.9%
Keep up with other companies/
competition using ERP
Reduce working capital 10.4%
Improve business performance/take
advantage of new software/analytics
Better integrate systems across multiple locations 59.7%
Position the company for growth 55.2%
Ensure reporting/regulatory compliance 47.8%
Replace an old ERP or legacy system 47.8%
67.2%
14.9%
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Implementation Team
For the implementation to be successful, a company needs to understand who the core people will be that should drive the
implementation process. It shouldn’t reside on one person, because then it’s either make or break with that one person. It
should be a team of people, and it’s good to have them involved in the selection process of ERP before the purchase is even
made — then they’ve already bought into the solution.
Getting top-level management support to push implementation down throughout the organization can be highly critical
and contribute greatly to the success of the project. That support gets the whole organization into the right mindset to do an
ERP project.
Length of Time to
Fully Implement the
New ERP System
1.5%
<1 month
9.0%
1 to 2
months
7.5%
3 to 4
months
13.4%
5 to 6
months
16.4%
7 to 9
months
17.9%
10 to 12
months
6.0%
13 to 15
months
10.4%
16 to 18
months
10.4%
>1 1/2
years
7.5%
Still in the
process
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“One thing that really surprises me is that some companies don't involve their IT teams in the decision-making process,” says
Burnson. “Senior management just shows up and says the company is switching to a new ERP system, and the IT team has no
idea that it was going to happen. They weren't given any opportunity to provide input or given the chance to point out different
functional requirements.
“Involve all of your IT decision-makers, department heads or anyone that the change will impact. Let them know what you’re
looking to do with the new system and find out what sort of features each department or area would like to see in the new
system. Find out what everyone’s pain points are using the software they have now. I think just opening that dialogue internally
with your company is really critical.”
Organizations definitely need different parties involved in the implementation process. They need to ensure that whatever
department the new system is going to touch that someone from that part of the business is involved, knows what’s going on
and is able to gradually introduce changes to their department team. Companies should make sure to put their best people on
the implementation, not just the employees that have time on their hands. Having the best resources on the ERP implementation
are critical to make it successful.
“We like to have senior management as part of the steering committee,” explains Filbert. “Then we have the implementation
team that would be broken down into the business process owners in the various areas of the company. That includes folks
from the supply chain, engineering, manufacturing, accounting and finance sides of the business. As you get more into the
details of the process, bring in subject matter experts from those specific areas. The folks that are going to be the champions
of the software from each of the major functional areas.”
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SECTION 3: Misconceptions, Mistakes and Best Practices
According to those surveyed by MBT, the top obstacle faced during implementation is users’ resistance to change. Beauty and
cosmetics company Avon had a painful experience in this area.
When Avon decided to implement a new order management system into their ERP, the process didn’t pan out the way the compa-
ny expected. Avon relies on their salespeople who go door-to-door to sell the products and who traditionally phone in their orders.
The decision-makers at Avon thought they could save a lot of money by eliminating its phone order department and instead
substitute that process with mobile devices. What the company failed to factor in was the older age of their sales force who didn’t
always have access to smart mobile devices, were not technology inclined
and that a lot of them lived in rural areas with poor Internet connections.
Avon completely ignored that human element during the implementation
process when they really needed to train their employees, so that they
understand why the changes were coming and how it could benefit them.
In the end, Avon’s modernization was supposed to save the company over
$10 million per year, but instead, sales representatives left the company in
droves because of the change in their daily working routine. Salespeople
didn’t understand the change, saw the new system in a negative light and
decided the job wasn’t worth it for them anymore. Avon failed to adequately
think through their process and became an example of poor change
management in action.
Misconceptions
One of the most obvious misconceptions about ERP implementation is
that the process fails because the software is buggy. That's very rarely
the problem. Usually, the business implementing the software is at fault.
Somewhere along the line, something went wrong. It can be anything from
not having a realistic timeframe, to not having or accounting for everything
that needs to be in the budget, to not training employees adequately.
Top Obstacles Encountered During
the Implementation Process
1. Users’ resistance to change 37.3%
2. Functionality problems with the system 34.3%
3. Cost over runs 29.9%
4. Unclear concept of the nature and use of the
ERP system from the users perspective 26.9%
5. Only part-time dedication by employees to the
implementation process 26.9%
6. Too tight of a project schedule 20.9%
7. Unrealistic expectations from top management
concerning the ERP systems 20.9%
8. Too much software modification 19.4%
9. Over-reliance on heavy customization 17.9%
10. Poor knowledge transfer 16.4%
BONUS 11.
Poor quality of business process reengineering 13.4%
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“That's not to say that vendors are never at fault,” advises Burnson. “Obviously salesmen can make promises that they can't
end up keeping. So, make sure to get in writing any sort of promise or guarantee the vendor tells you.”
Another big misconception is that an ERP system is easy to implement. Companies figure they can do it on their own and
don’t require any supporting services.
“When we do demonstrations, we always want to sell it as the most easy-to-use package, and it should be,” says Hansen.
“It’s very intuitive, but not intuitive enough that an organization is able to apply its business directly to the new ERP system,
understand how to set it up and that you understand what the outcome is going to be.”
“Companies need guidance because there’s always four ways to do something. There’s the perfect way, an okay way, a
not-so-good way and then the worst way to do it. Helping the customer get to that best way the first time, is invaluable to
any company — to realize their true value of investment quicker.”
Implementing ERP is not equivalent to installing off-the-shelf software onto a desktop computer. ERP touches every aspect
of a business, and its designed to help run a business more efficiently. Companies need to be open to process changes and
understand the impact of the implementation and the resources required to avoid failure.
Pain Points & Mistakes
“Quite often I see implementations stalled by focusing on the nice-to-haves that maybe should happen during a second phase
implementation process,” says Poindexter. “It causes a company to lose sight of those core requirements and those existing
pain points that they need to solve. They’ve got to put up very clear expectations and give it some time for the people to use it
before looking at all the bells and whistles.”
One of the keys to a successful implementation is a solid ERP systems design that gives an organization the capabilities they
need but also has a lot of flexibility. Businesses need to go through and document their key business scenarios for use cases
and then run through those in the new system to make sure they’re working. Companies can see issues up front then and
determine where they might change that process to better fit the capabilities of the new system.
“Companies will customize the new system to do things the way they’ve always done them,” adds Poindexter. “That's a very
common thing that will happen during implementation. Someone will be fixated on a report or screen they’ve always had, instead
of looking at how they can do that better in the new system. They don’t realize that an interactive dashboard might be easier and
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simpler than a static report or screen. Companies need to give the new capabilities a chance to solve their problems and not get
stuck on how they’ve always done something. It’s that typical resistance to change that they’ve got to overcome.”
Another pain point companies face is making sure that users are adopting the new system. The resistance to change can be
strong, so every organization should make sure employees have been properly trained, that they understand what the system
does and how it plays into other areas of the business.
“Maybe there is a piece of information that a user needs to enter, but they don't use that information themselves and don't see
why it's important,” explains Poindexter. “If they don’t understand how their work in the ERP system affects the business, they
might end up not adopting the process and now downstream functions begin braking down. Companies need to make sure that
everyone understands the workflow to the system and how what they do or don't do affects the next person down the line.”
The more an organization adjusts or enhances ERP software with specific requirements (versus changing a business process),
tends to elongate the implementation time. The reason to proceed with an ERP implementation is to address those pain points —
those processes being done internally.
“Don’t recreate those same processes within the new ERP,” says Hansen. “Before you implement an ERP system or start imput-
ing data, analyze what you’re currently doing. Are there any negative implications on what you’re doing today or are there any
pains with that today that we should be addressing before we start imputing that same process within the system?”
Among the biggest mistakes companies make during implementation are not managing expectations, having unrealistic
deadlines, not adequately training employees and probably worst of all, not ensuring the vendor will be able to deliver on the key
requirements the company needs out of the product. To avoid these things, organizations have to know what they’re getting into
by reading about other companies’ implementations and the mistakes they've made. Companies should do their homework while
ensuring that their employees are on board with the change and that they are getting the resources they need to be fluent with
the system once it goes live. When in doubt, defer to in-house experts and take their advice and considerations seriously.
Another mistake companies make is thinking they can implement ERP themselves — so they’re essentially guessing. While that
might be okay for today, it paralyzes them when they look to grow in the long-term.
For example, a company today buy’s one type of sheet aluminum, adding it into their ERP system. What happens when they get
a customer order six months to a year from now that uses aluminum as well, but it’s a different alloy of materials? Because the
company was so generic the first time, they now have to find a way to call out the new material differently, so that it’s intuitive to
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employees which is which. “They look at their business, they look at the software and they try to make key business decisions
on their own without having expertise of what would really work for them and support growth long term,” adds Hansen.
Another misstep for companies is not ensuring that the implementation is done in a concentrated timeframe. Time is not an
organization’s friend with it comes to ERP implementation. As time goes on in an implementation, companies find it more difficult
to bring that system live. Having a focused effort avoids the implementation from rolling on over several extra months or years.
Best Practices
First of all, businesses should know what they're buying and have a realistic understanding of what that product will be able to
accomplish for their organization. Vet the vendor, and make sure they will be able to deliver. Companies should verify that their
employees are on board with the changes and keep their departmental heads and other decision makers in the loop. Businesses
need to get their IT team involved on day one. A business should understand that their organization will have to adapt to the
software — the software can't always adapt to every single one of their processes.
Businesses have to manage their expectations. If there are problems within their business, a new ERP system alone will not fix
those problems. They have to adapt new business processes with what the new ERP system is telling them to do. Companies
have to be comfortable with the fact that a lot of their internal processes are going to change. They also have to embrace, plan for
and communicate those changes to employees. A new ERP system won’t do anything for an organization if their processes don’t
change. That's just the bottom line.
Organizations can never have enough training. Training should be integrated into the daily processes. Whether its vendor-supplied
services, video tutorials or hands-on training specific to positions, make sure the documentation is available company-wide.
Periodically, every year or two, companies should do a review to make sure that they’re getting the most out of their ERP system,
not falling back into old habits and continue to help employees be more productive.
“Right before you deploy, make sure you do that final end-user training,” says Poindexter. “You don’t want to do that end-user
training months before the deployment, because they’re not going to remember all that training. You want to do it right before
go live.”
In the end, companies need to do their homework vetting vendors or anyone they’re going to sign a contract with. If they’re
outsourcing any of the implementation to a consultancy firm or third-party implementation service, they need to review them as
well. Businesses need to make sure that they have every single detail sorted out before they begin.
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SECTION 4: Moving Forward
According to the survey, 94% of respondents would describe their ERP implementation as successful, but things aren’t done yet
for them. Implementing an ERP system should be a process of continuous improvement for a company. Once everything is in
place, it’s important for a company to widen the reach.
“Even if you've gone through an ERP implementation, in my mind it's never done,” explains Filbert. “You should be constantly
trying to increase the adoption of that software with employees and across your enterprise, continually improving its use and
how far it reaches into your organization.”
Judging Implementation Success
Not every ERP implementation will be a victory. So, how does a company determine if its was successful? Companies should
determine how long certain tasks took under an old system and then determine how long they should take under the new
system. Tracking those little individual adjustments to businesses processes allows companies to see where they’re saving
man hours, reducing redundancies and reworking inefficiencies.
“Companies need to go back to the beginning and look at why they're doing this project,” explains Filbert. “Was it to get away
from legacy software that's no longer supported? Are we growing by leaps and bounds, and our existing system just can't
handle it? Did we address all of those pain points we listed in the beginning? Then, make sure that after the new systems are
live that you’re reevaluating constantly every couple of months to guarantee that you achieved what you wanted to and received
the value from this project that you expected.”
A company can use a number of different metrics to judge the success of their ERP implementation. For instance, an organiza-
tion can use a simple ROI calculation that looks at how much it cost to implement, how much it is going to cost over its lifetime
and then a year-over-year analysis to determine any returns. In some cases, a business might even end up spending less on its
new ERP system when it's all said and done than what they are paying for their current system.
“Obviously there are a lot of investment tools out there to look at, but it's more about looking to see how you accomplished what
you set out to do,” says Poindexter. “What were the pain points that you wanted to solve. Look at them, and determine if you
now have a better process in place.
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“Let's say one of your goals was to process your customer orders in one day instead of four days. Go back and validate that
what you said you needed to accomplish, you've accomplished. If you only went from four days to two, go back and see
where you can do better — as you only accomplished part of your goal. Make sure to get customer feedback, too. Customer
satisfaction is really key. If you're running your company better, you should have happy customers.”
Evolution of the Machine
For some ERP implementations, the reason why the
process takes so long is that companies are just dealing
with the baggage of their old system. With a greater
movement to establish that different systems can
communicate well with each other, migrating data from
one system to another should become smoother and
more flexible.
“I would hope that the implementation process over time
becomes less tedious,” says Burnson. “One of the reasons
why it's still such a pain for a lot of companies is because
they're using a 10- or 20-year-old legacy system. They now
have to pay their dues for maintaining that legacy system
for so long.”
What respondents said they would
have done differently during the ERP
implementation process:
• “Wouldn’t have waited so long to upgrade.”
• “Our scope was too large. Would have preferred
a business versus a regional deployment. We
started deployment in Asia, but design team
was in the U.S.”
• “Better and more extensive end-to-end testing.”
• "Invest in services."
• “Clearer definition of process owners for new
process review and lead adoption.”
• “Look to all departments for input.”
• “More education and training for users before
go live date, particularly on the plant floor.”
• “Better process documentation.”
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For the ERP implementation process to evolve, it will be important to figure out ways to do some of the manual work in a
more automated way for data extraction capabilities of legacy software and data. Then implementation becomes more of a
technical implementation versus throwing man hours at manually loading data into the new system. That will speed the rate
of implementation.
Other ideas for better implementation include looking at rapid implementations where it's a highly concentrated effort for a
shorter period of time; a services team approach where the ERP vendors go in and actually do the majority of the heavy lifting
on the implementation; and the capability to do the implementation remotely and avoid a lot of travel time.
“I believe that there’s a huge shift coming in the way that people learn to navigate their ERP systems,” says Hansen. “People
don’t want to read textbooks or travel for a three-day training class. They want something that is going to lead them through
quickly.”
Hansen adds that system users want to know that they can get the information they need when they want it and how they want
it. Moving forward, she feels that systems will have more videos, kits and tools built into the software to automate things and
make it very intuitive for a user.
“ERP is truly the neural system of business,” concludes Hansen. “It’s the foundation. It’s what allows a company to have insight
on their processes and organize it in such a way that they can successfully support their customers and grow. It’s more of a
necessity today than it ever has been — in order to stay competitive.”
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Market Monitor Research Series:
Advantage Business Media’s Market Monitor Research Series presents fresh research and analysis on compelling and timely
industry topics. “Implementing a Brighter Future with ERP: Tips and Insights on Making Your ERP Implementation as Painless as
Possible” was prepared by Manufacturing Business Technology Editor Jon Minnick. The data presented in this report is based on
the results of a survey of Manufacturing Business Technology subscribers, comprising of CEOs, presidents, owners, engineers,
managers and directors across the manufacturing industries.
About Manufacturing Business Technology:
For nearly 30 years, Manufacturing Business Technology has been a prime information source for decision-makers in
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Implementing a Brighter Future with ERP: Tips and Insights on Making Your ERP Implementation as Painless as Possible
Manufacturing Business Technology (MBT) recently surveyed its readers to understand their experience with implementing an ERP system for their business. According to respondents of the survey, 63.4% are currently using or implementing an ERP system, while 36.6% still are not utilizing the technology. This report looks at those results and includes industry insights and tips on what to expect during an ERP implementation including: a brief overview of today’s ERP systems; preparing for an implementation; misconceptions, mistakes and best practices concerning the implementation process; and where the industry is headed.