ERP Implementation

Three Approaches To Implementing ERP Systems

There are three common approaches to implementing a new ERP system:

  1. Enterprise-wide full installation – This approach was very common in the early days of ERP installations as, at the time, many large corporations were trying to quickly become Y2K compliant. The biggest challenge companies encountered was getting all their employees to cooperate and accept a new software system at the same time. If you are leaning towards this method of installation, make the transition easier by clearly outlining the ways that the new ERP software will be an improvement over existing software. Provide training for your employees to increase their comfort level with the new system. If your top level staff members are solidly behind the new ERP system and you take the time to help transition your staff to the change, you will go a long way towards helping your company achieve a successful ERP installation.
  2. Unit by Unit – This is common approach among large or diverse companies where there are not many common processes across business units. Management will locate a particularly open-minded and flexible team and install a pilot ERP installation in that department. Some process that don’t vary much across the company, such as financials, bookkeeping, and HR may be installed across the entire enterprise, but the pilot department has its own separate ERP system and database, or “instance”. Once the company feels comfortable with the success of the installation, the pilot team is used as an in-house customer reference to sell other units on ERP. This process can be somewhat time consuming, but does often lead to increased employee acceptance of the new ERP application as they hear testimonials from peers on the benefits of the new system. More departments may be added over time with their own discreet instances of the ERP application, or the company may try to consolidate them into a handful of different instances or perhaps even into a single ERP instance for the entire enterprise.
  3. Key-Process Installation – Smaller companies often opt to focus on a few key processes for their initial ERP installation. For instance, they may decide to start out using the ERP application’s financial module and add other features as the company grows. Traditional ERP software often caused problems down the road for this type of installation since they required choices to be made at the time of the initial installation that could not easily be changed at a later date. Although this is certainly a viable approach, it’s worthy to note that an ERP implementation is not really successful until it is in use by employees. Time must still be devoted to training employees on new features as they are implemented.

In smaller businesses and start-up companies, usually the best approach would be to implement an enterprise-wide full installation. This would minimize any later retraining of personnel, minimize the need to rebuild history, and eliminate possible future integration issues with external applications, all while brining full cohesiveness and control to the organization from day one.

Although the ideal configuration would be one ERP system for an entire organization, many larger organizations usually create an ERP system and then build upon the system and external interface for other stand alone systems which may possibly be more powerful and perform better towards fulfilling an organization’s needs. Usually this type of configuration can be time consuming and requires significant labor hours.