There hasn’t been a sense of urgency to update ERP until recently. Now, digital transformation is atop many CIO’s agendas and with many older solutions ready for retirement, it is time to start thinking about what’s next.
The biggest decision is will you migrate to your current vendor’s solution or make the decision to go with a new ERP? Ending up with a new ERP solution that aligns with your business requirements and organizational strategy requires answering “What is the right ERP?” and “How do we make a selection?” correctly. These can seem like scary decisions , with most people never actively participating in a digital transformation project and claims floating around such as, “more than 50 percent of ERP implementations fail,” when in reality around 88 percent of organizations consider their implementation a success.
Whether you are about to implement new ERP on premise or in the cloud, there are three main areas to focus your attention and efforts to increase your likelihood of successful software implementation. Let’s look at the three P’s: people, process, and priority.
Strong relationships with the right people is a key success factor. It is important to gather the right team, comprised of subject matter experts and core users, that can identify end user needs at various levels. Executive sponsorship and buy in is required. The executives will help with prioritization (Third P below) and single visioning the scope. A dedicated project leader whose job is to successfully manage the project start to finish and prepare the organization for change is necessary. Organizations that settle for new employees or whoever might be available, versus the ones that know the systems and processes, will proportionally suffer.
Planning is vital to ensure the project completes on time and within budget. Map out your current systems and business processes. Identify your organization’s goals and what processes can be automated. Conduct interviews with end users focused on specific functional areas to document operational needs and areas of improvement. Look at what systems are currently used and what data needs cleansing before migrating to a new system.
No organization can do everything, and no solution will solve all your issues, which is why prioritization is so important. A good way to identify and prioritize the key capabilities you need from new software is by using the MoSCoW prioritization method:
Must haves: These are the mandatory requirements of the system. Without these, the company could not function at the same level or better than current standards. Start at a high level by identifying what challenges you want to solve and what your current system isn’t doing for you.
Should haves: These capabilities are important, but if left out, a workaround could be substituted, although not preferred.
Could haves: The could-have attributes would be nice if possible, but do not steer final decisions and have less of an impact if left out. You can eliminate the could haves from the should haves by reviewing the degree of pain caused by the requirement not being met.
Won’t haves: These aspects are agreed upon by the team to not be part of the project. The won’t have attributes help avoid going out of the scope of the project.
Knowing where to direct your focus early in ERP project planning starts with finding a solution that aligns with your strategy. If you find yourself thinking about updating ERP, remember the three P’s for the people, planning and prioritization that will lead your journey to success.