Many companies were spurred into action during the pandemic to introduce systems that would digitize their operations like ERP Implementation. A recent SYSPRO survey however has found that many of these systems did not deliver on the value promised, as they were carried out as stand-alone projects with little coordination or oversight. Mid-size companies considering implementing an ERP system as the route to digital transformation need to be aware that it is a complex system with a major business impact. Most of these companies lack the experience or skills necessary to manage such a major project and without this, an ERP implementation is unlikely to meet the desired goals. That is why project management undertaken by a person with experience and knowledge is so key to a successful ERP project.
Setting up the ERP Project
An ERP system is a big-ticket item that requires a range of managerial and executive level sign-off before being approved. Fundamentally, the board needs to address the following questions:
What are you trying to achieve with the ERP system? Why? How? By when?
The answers will decide the strategic objectives of the ERP system. Some typical strategies are:
- Cost reduction by streamlining the business;
- Process improvement to shorten product delivery time;
- More flexible and agile manufacturing operations;
- Improving tracking and traceability to ensure regulatory compliance;
- Real-time data access and better reporting.
But while the board and executives of a company must set the strategy, it’s unlikely that they have the time or experience to successfully manage the project. They need an outside party to ensure the project stays aligned with the strategic intent.
Knowing how to convert a defined strategy into a project scope with timelines and deliverables requires skills and knowledge that only come with years of experience. A project manager with expertise in ERP projects in manufacturing will be able to guide the board and executives on how to go through the steps of implementing the system so that business processes and organizational structures can transition from a current ‘as is’ status to a desired ‘to be’ status.
Companies that missed a business transformation opportunity when implementing point solutions did so because the project’s success criteria were focused on getting the system running. Without project experience, they did not realize the importance of integrating the system with the wider business processes and functions to enhance and even transform the way people and processes work.
Executing the ERP project with ERP Implementation
An ERP implementation is not just a new system. An ERP project management is a large discontinuous change that cuts across many functional and process aspects of a business. This requires dedicated, skilled resources to manage it. Most companies won’t have a person in-house who lives and breathes ERP implementation.
Once the strategy is set and agreed upon, a good project manager will reduce the time that top-level executives need to spend on issues around the implementation. A project manager will watch out for the organization’s interests and oversee the activities of the team on behalf of the executives.
There are so many aspects of an ERP implementation that need to be carefully considered that most people do not have the experience to undertake the role thoroughly. The major responsibilities of the project manager should include:
- Verifying the project’s success criteria;
- Managing and tracking project progress;
- Ensuring project alignment with strategy;
- Managing the project scope;
- Allocating resources;
- Understanding and mitigating risks;
- Managing the project budget;
- Overseeing the design and implementation of processes;
- Ongoing communication with all stakeholders (executives and staff);
- Setting and managing expectations;
- Ensuring appropriate change management activities so that staff understand the objectives and are committed to the project;
- Planning and coordinating training;
- Planning and managing appropriate testing activities;
- Coordinating technical issues.
The aim is to ensure that if these attributes are all sufficiently considered, an on-time and on-budget project will be achieved which addresses the original business drivers.
After Go-Live using ERP Implementation
Companies sometimes assume once the ERP system has gone live that the need for a project manager disappears. The project manager’s role does not end when go-live occurs, rather it marks a change of pace and type of involvement. The responsibilities now involve:
- Ensuring project activities are closed;
- Reporting on how project deliverables were met;
- Conducting an assessment on lessons learned;
- Transferring the information and knowledge about the project to staff and stakeholders.
After go-live, the board and executives still need to keep measuring that the strategic goals are achieved and conducting a range of other post-implementation activities. For example, implementing a maintenance strategy that outlines the steps required to upkeep and improve the system on a regular basis.
The role of project management in an ERP implementation
Delegating the running of the implementation project to an external project manager is often the best way to ensure that the ERP system creates value for the company by ensuring that the project achieves its strategic goals.
An ERP implementation is a vehicle for delivering business change and improvement. It involves staff and outside experts coming together on a temporary basis to carry out a one-off change that will lead the business to greater success. It is also a complex project which must be managed in the right way. The role of a project manager with experience in ERP implementation and insight into specific manufacturing environments is a major factor in the success of the project.