Business organizations throughout the globe are propagating Enterprise Resource Planning (ERP), but the question still remains the same- how far have they succeeded in deploying ERP completely? While the concept is gaining increasing popularity today, there is a noticeable disconnect between the ideals propagated by ERP integrators and vendors and the practical needs of businesses.
A recent business and scientific literature revealed that nearly 25 percent of ERP implementations crash to failure and at least 80 percent exceed the budget or deployment time. If you want to estimate your ERP implementation, you can expect to expend 5 percent of your yearly revenue on your digital transformation and ERP initiative. Similarly, you can also expect a five-fold increase in your direct software costs.
How to plan and execute an ERP implementation?
As business spending on ERP implementation is increasing, it becomes essential for business owners to adopt the right ERP implementation strategies. The following is a practical guide that can help you with the process:
Strong planning: Without proper planning, ERP implementation becomes futile. Since there is no one-size-fits- all approach, you need to consider your business needs and identify the ideal solution. ERP implementation involves a huge amount of time, money and resources.
It is important for all organizational members to work together. However, the time will vary depending on the number of modules, the size of business, the scope of processes, customization and a host of other factors. So, it is important to take these factors into consideration while planning an ERP implementation.
Scalable solutions: In order to implement an ERP system, you need to create solutions that scale with your business needs. Besides your short-term goals, you need to have long-term goals in mind while creating such solutions. Solutions that scale up or down depending on the business needs help in saving large amounts of money and resources.
In-house IT department vs outsourcing: Since ERP implementation demands manpower, you need to choose between your in-house IT department and outsourcing. Depending on your requirements, you may delegate responsibilities to your in-house IT professionals or hire outside service providers, who can help in reducing your burden.
Lifecycle management and maintenance: Your ERP system is no different from a living thing; it requires constant maintenance and upgrades for maintaining quality and functionality. You should consider updating your ERP systems regularly so that it keeps pace with time. As businesses undergo changes, proper upgradation and management of ERP systems become necessary to save costs and maintain functionality.
Right tools: ERP solutions are highly customizable and extensible, allowing you to choose different ERP modules for greater functionality and smoother integration with systems and applications. The ERP modules play a significant role in making your ERP system usable and functional. The right set of modules will promote user-friendliness and excellent functionality. So choose the right modules to ensure your business process run smoothly.
ERP vendors: Before you settle on a particular ERP solution, consider looking for better ERP vendors in the market. You should choose a vendor that updates solutions regularly and simplifies processes. Involve stakeholders such as IT executives or outsourced consultants in the decision-making process so that you don’t end up choosing an unproductive and costly ERP vendor.
ERP can significantly improve the efficiency and quality of the business. The coming years will definitely see a lot of companies opting for ERP implementation.