The 7 Prerequisites for an ERP Implementation
ERP implementations are usually a once in a lifetime event. It is therefore important that they are approached with the seriousness they deserve. Unlike other Capex spends, ERP is not about spent and forgotten expenditure. One needs to be mindful of the additional effort needed in the rank and file of the organization to make an ERP implementation successful. Even before any spending commences on the ERP project, the following pre-requisites have to be fulfilled. If they are not, the project has a high probability of heading towards failure.
Establish the objective
Establish the clear objectives for embarking upon an ERP Project. It could be for
- standardization of processes
- getting faster MIS
- reducing inventory
- insights into cost, etc.
No matter what the objective is, it needs to be established from the executive management level in order to have the right expectations for the project. It is important to be realistic and cognizant. An ERP implementation project is not a magic bullet which will solve all ills of the organization.
Define a clear MIS
Information needs of the organization have to drive the ERP project. The Management Information Reports and their periodicity expected out of the ERP must be defined clearly.
Build a Road Map
ERP Implementation projects are not a one time spend. Proceeding forward with such an ideology will form the basis for disappointments at a later stage. Build and formulate at least a 5-year ERP roadmap for the various parts of the organization which will get automated and integrated in a phased manner.
Dedicated ERP Manager
Even before evaluating a product or partner, it is important for the organization to have a dedicated ERP Manager whose only job would be to own the product and project. The ERP manager will report to the CIO. This will ensure that the right focus is given to the project. It is even more desirable if the ERP Manager is homegrown instead of being a lateral hire.
Dedicated Multi-Department ERP Core Team
It is important to constitute an ERP Team with a representative from all departments. Members of this team should have a thorough understanding of the company and be one of the best in their individual departments. This team needs to be dedicated towards the ERP implementation project instead of considering it as one of the jobs to do.
ERP Projects are inherently money guzzlers. The tangible ROI is felt in the long run. Having a myopic view with an expectation of instant results is a sure way to stall the project. It is important to have a budget allocation for Capex and Opex based on a 5-year roadmap.
AMS Strategy before ERP Project Decision
It is extremely important to have a clear plan as to how the organization intends to render the support to the ERP User Community. Continuous support and periodic incremental improvements are the only way to get the best out of an ERP. One time implementation wonder does not exist. It is important to have a clear strategy as to whether life cycle support for the ERP application is going to be outsourced or insourced.
If an organization pays attention to these points before commencing the ERP implementation project, the odds in favor of making the project successful gets higher.