An Expert’s Guide to ERP Success

By Eric Kimberling, Managing Partner Panorama Consulting Solutions

Denver.Introduction ERP implementations are tough. and my personal experience spanning 15 years of ERP implementation consulting. Waste Management. and providing expert witness testimony to some of the world’s highest profile ERP failures and lawsuits. consider the following data from Panorama Consulting’s 2012 ERP Report. project manager. Despite the best intentions and the amazing potential of modern ERP systems. our firm’s quantitative research of thousands of ERP implementations across the globe. consultants. All Rights Reserved. student or an aspiring ERP practitioner. CO 80209 720-515-1377 Panorama-Consulting. For years. The analysis and recommendations provided in this book are based on years of the Panorama Consulting team’s ERP implementation experience. Whether you are a C-level executive. team member. project team members and academics across the globe have asked one simple question with no good answer: “What is the difference between a successful implementation versus a failure?” The intent of this book is to provide a deep-dive analysis of the best practices and critical success factors required to make any ERP initiative successful. cost more than expected. and a host of others – and it becomes clear that ERP implementations are no walk in the park. . executives. organizational change management. In fact. most deployments take longer than expected. and fail to deliver at least half of the business benefits that are expected. an independent study of nearly 300 ERP implementations across the globe: • • • 54% of implementations take longer than expected 56% cost more than expected 50% fail to deliver at least half of the expected business benefits Add to this data the fact that the industry has more than its share of high-profile ERP failures in recent years – such as Hershey’s. the best practices outlined in this book will help you better understand and internalize the factors required for successful ERP initiatives. Page 1 of 17 3773 Cherry Creek North Drive .Suite 720 .com © Copyright 2012 Eric Kimberling.

lack of ERP expertise. Of course. manufacturing and warehouse management.ERP Implementation Overview Before beginning our overview of implementation best practices. In addition. marketing. it is less about technology and more about creating better business efficiencies. ERP is more than just computer software.g. In addition to the base software licensing costs. While ERP may seem to be of interest or use only to technical managers. customer relationship management. fear of being replaced. ERP isn't for every company. it still carries a hefty price tag. let’s first define what exactly we mean by “ERP software. finance.Denver. In general. Oracle.Suite 720 . . the systems need to be monitored and improved on a continual basis. The amount of time and resources required for a successful implementation are frequently underestimated by organizations. Therefore. When employees are hesitant. If not used properly. training for employees. supply chain management. including accounting. The software being implemented is simply the tool for the organization to build and improve business processes. sales. industry-specific vendors. business processes and work functions performed by an organization’s employees into a single system. manufacturing-focused companies to plan how to deploy resources throughout the organization. Microsoft. The top challenges that companies face during an ERP implementation are lack of employee buy-in. ERP systems have evolved dramatically and are used by companies of all types and sizes in many different industries. NetSuite and Epicor. There are dozens of providers of ERP software. including fear of change. CO 80209 720-515-1377 Panorama-Consulting. By combining these once “stand-alone” functions into a single unified database. companies must define their future business processes to help select the appropriate ERP software. Once the software is implemented and the business processes are in place. To ensure a successful implementation. ERP systems were used in larger. including human resources. While some ERP packages only cover two functions of an organization (e. In order for a software system to be considered ERP. Infor. it affects business managers in an equally profound way. payroll. ERP systems provide a useful and cohesive structure for many companies.. In the early days of enterprise software. technology alone does little to improve an organization’s business. These processes provide the structure for the business to run effectively. lack of project resources and lack of appropriate budgeting. increased competition.” Enterprise resource planning (ERP) software integrates the data. and fear about giving up the comforts of the old system. All Rights Reserved. Employees are often reluctant to embrace a new system for a variety of reasons. Today. including both global outfits and small. companies are complex and require powerful and flexible ERP systems to remain viable. and other direct and indirect Page 2 of 17 3773 Cherry Creek North Drive . The ultimate goal of an ERP implementation is to improve an organization’s efficiency and effectiveness. ERP systems have several components or modules to provide functionality to various departments within an organization. sales and other key areas in the company. it's also a way of transforming and optimizing an entire business. the implementation can become more difficult and less efficient than anticipated. Well-known providers include SAP. which often lack the expertise to fully understand the impact and importance of an ERP implementation. Today. Though the software has become more accessible to more organizations in recent years. most ERP systems address a wide range of functions. CDC. ERP systems enable organizations to make informed and timely decisions by providing “real time” access to integrated information in sourcing.com © Copyright 2012 Eric Kimberling. business owners and managers should be involved in the purchase decision and the implementation. The demands of the global market place. implementation costs. scheduling. and the changing economy have all created the need for all organizations to streamline business processes and efficiencies. quality and more. production. the organization needs to have full commitment to the project from senior executives to front-line employees. QuickBooks: payroll and accounting). it often requires hardware upgrades. it must provide an organization with functionality for two or more systems.

I’ve seen projects fail because the project team forgot to define that one little critical requirement during the ERP software selection process. controlling project scope creep. But that is not the case. Implementation Planning I'm a huge fan of professional football (American football. Next. and how within each play. Perhaps the thing that fascinates me most about the sport is how much each play matters. Every little thing counts. All Rights Reserved. cost overruns and ultimate project failure. we’ll summarize some of the best practices surrounding implementation planning. But when the right system is implemented correctly – and supported with the proper “people” systems – ERP can transform a company’s operational abilities by improving efficiency. Despite the global economy’s signs of recovery. And we've all seen many episodes of Sports Center where the receiver makes a spectacular catch in the end zone. ERP implementation also can be incredibly risky. you're just glad to have survived the whole thing in one piece. and streamlining customer service management. And just like football. capital information technology budgets and technology investments continue to be scrutinized. lawsuits often follow. Despite the economic headwinds. Although there is never an ideal time to implement ERP because of the hours and resources required to make a project successful. from the way you choose your software to the way you design your system to the way you communicate changes to employees. ERP implementations are much the same way. which seems like plenty of time to make and overcome a mistake or two. By the end of the game. And when there is a halt in operations. The average deployment takes 18 months from start to finish. only to have one foot just one inch too far over the line. When an offense is moving down the field. Sixty minutes may seem like a long time to play a game (especially if you don't like football).costs. every little thing matters. The problem. the more forward-thinking strategic companies are finding that current conditions are ripe for an implementation. ERP should increase revenues and decrease costs. If implemented correctly. This creates a domino effect of customization. but they are different in one way: football has a clearly Page 3 of 17 3773 Cherry Creek North Drive . The media have covered several instances of companies that had to shut down entire operations briefly because of botched implementations. Others recognize that now is a perfect time to negotiate with ERP vendors and reduce the total cost of ownership. If an offensive lineman protecting the quarterback is just one inch too far off his position on just one play. is that many companies fail to select and implement their ERP system in a way that delivers measurable results. it can be the difference between a touchdown and the quarterback being sacked for a loss. but it's often not enough time to overcome a “mistake of inches” from earlier in the game. many companies are experiencing significant growth and need new systems to handle their increased demands. managing organizational resistance. or those activities that should be completed before your implementation begins in earnest. CO 80209 720-515-1377 Panorama-Consulting.com © Copyright 2012 Eric Kimberling. Facilitating business changes. providing access to real-time data. The ones that do are finding that ERP is an extremely powerful tool in this global economy.Denver. . only to find that the software chosen couldn't handle the functionality needs. ERP projects may be like football games in many cases.Suite 720 . one key block that pushes a defender just one inch further downfield can be the difference between keeping the drive alive with a first down or having to punt to the other team. ERP implementations are a brutal contact sport. and trying to work with software that doesn't always fit your exact needs can take its toll. of course. which is the perfect reason to implement during times of economic strife. Some simply want to have ERP in place when the economy picks up again so they can leverage new technology to enjoy a steeper recovery in revenue and profit. that is).

com © Copyright 2012 Eric Kimberling. probably don't have answers to these and other key questions. the implementation approach and the internal implementation team. While the vendor should assist the company and provide guidelines whenever possible. including the ones running the project. system integrator or other third-party consulting firm. a core team of functional experts dedicated to the project and any necessary subject matter experts (SMEs). organizations need to first define the key roles and responsibilities of the major players during an implementation. Software Vendor The software vendor is responsible for delivering the software and working with the company to determine the most relevant implementation approach. while no one has created a universal definition for ERP implementation success. and configuration and set-up decisions. the vendor organization and any third-party professional services firm they plan to hire. The level of involvement and responsibility of the software vendor during implementation varies from company to company and depends on what is negotiated in the contract. it is the company’s ultimate responsibility to manage them just as they would any vendor or contractor. . a senior executive sponsor (that is on the executive steering committee). Since the purchasing company is paying for these resources. additional resources. customizations. CO 80209 720-515-1377 Panorama-Consulting. The governance of the project generally covers changes to the original scope. The company must decide what mix of people will make up the implementation team from within their organization. The company also should have policies in place to govern the implementation. Roles and Responsibilities During a Typical ERP Initiative When developing an ERP implementation plan. Page 4 of 17 3773 Cherry Creek North Drive . team leads and functional and technical consultants. the decisions are ultimately up to the company.Denver. and typically includes an executive sponsor for the implementation. While the size and scope of the project determines the extent of people required on the implementation team.Suite 720 . All Rights Reserved. a project manager. These services also may be provided by a value-added reseller (VAR). In other words. definitions and best practices to get your team started towards the goal line. These roles include a project manager. Value Added Reseller (VAR) or System Integrator The software vendor’s professional services team is typically responsible for assisting the company with the implementation. where is the goal line and when do we declare victory? How do we define go-live? Are we done once the system is up and running? Which business processes do we have to have addressed in the new system before we call it a day? How do we know when the business has fully adopted the software? And how will we know that the business has realized a strong return on investment (ROI) from the expenditure? The problem is that most people. the best approach for a large company is to make the implementation project the full-time job of every team member. which can lead to big issues later on.defined goal-line and scoring process. an executive steering committee (that the project manager reports to). Software Vendor’s Professional Services Team. Purchasing Company The purchasing company is responsible for conducting due diligence to select the software vendor. The team’s make-up is dependent on the client’s determinations. Following are some key tips.

In addition. During an IT project. All Rights Reserved. Remediation of Issues No matter how well-managed an ERP implementation is. Unresolved issues should follow the remediation process outlined in the project’s governance and controls. as well as issues. Executive Sponsorship. An executive steering committee typically meets at least one or two times a month to review both project results to date. Examples of vendor deliverables include software configuration and documentation and training documentation and materials. Only by having true buy-in to the project will executives understand the importance of ensuring the right people are available to make the project successful. so it is typically up to the implementing company to determine how the software is going to be used. it can be very difficult to procure the employee resources that are needed to make a project successful. issues are common. More often than not. Executives often need to be the ones to resolve such issues. and other sensitive topics that will not be adequately resolved without their involvement. Projects of this magnitude require companies to make key decisions about how they wish to run their businesses. The SOW is accompanied by an implementation plan which outlines the estimated costs and time associated with the scope outlined in the SOW. clearly established roles and responsibilities must be in place within the client company and implementation partner. ERP projects also require heavy involvement from internal employees. .Best Practices in ERP Management Statement of Work. the executive steering committee should be involved in making and supporting key strategic and business process decisions as they relate to the project. Involvement and Support Executive involvement is critical to any ERP implementation and especially so in organizations with complex business requirements. so their involvement is important in this regard as well. Acceptance of Deliverables The company should review and accept or deny all deliverables in a timely fashion to keep the project on schedule. Executives are the ones that can ultimately make these resources available to the project. these key individuals are in place before the SOW is finalized and have some input in shaping the SOW. The establishment of these key individuals with their corresponding authorities is considered best practice. business processes. Leading ERP systems are flexible. involvement and support are arguably the most important aspects of an ERP implementation because they enable the best practices outlined in this book. CO 80209 720-515-1377 Panorama-Consulting. The company is ultimately responsible for ensuring that risks and issues are addressed to their satisfaction prior to moving to subsequent phases of implementation. it is extremely unlikely that an implementation team will be able to effectively address the areas critical to Page 5 of 17 3773 Cherry Creek North Drive .Suite 720 . risks and resource needs.com © Copyright 2012 Eric Kimberling. Large implementations that cross geographies frequently involve political battles in terms of how the business will operate in the post-implementation world. Without executive support. It is the company’s responsibility to ensure that vendor deliverables meet their quality and timeliness expectations. some broader decisions will inevitably need to be escalated to the executive team. Without executive support. Executive sponsorship. they are often called upon to make tough decisions regarding changes to operating models. organizational structures. Although the core implementation team is responsible for making as many design and implementation decisions as possible. Implementation Plan and Scope The scope of the implementation project should be determined before the project begins and should be outlined in the statement of work (SOW). To complete the work detailed in the SOW.Denver.

.Suite 720 . An ERP implementation project is no exception. Page 6 of 17 3773 Cherry Creek North Drive . time. Implementation Project Governance and Control The management of any project requires proper project governance and controls. a decrease in the scope results in a material decrease in the work and cost necessary to complete the project. The company’s project manager is responsible for keeping the project in scope and adhering to project time lines. which gives the original timeline a higher likelihood of succeeding. scope management is critical to the project’s overall success.com © Copyright 2012 Eric Kimberling. including establishing and validating processes and training employees across all functional areas. quality and communication. particularly the following: scope. Costs Because changes to the scope have a material impact on cost. As a result. any changes or customizations that are not in scope warrant a corresponding change order and approval from the company’s steering committee and executive sponsors. which puts the original timeline at risk. Effective processes and procedures must be established and clearly communicated at the start of the project. Best Practice: Institute change controls at the start of the ERP project. managing costs in an ERP project should be done through change controls. The SMEs should be valued members of the organization. This occurs because an increase to the scope results in a material increase in the effort and dollars necessary to complete the work. Changes to the scope of an ERP project increase the overall cost and the risk of successfully completing the ERP implementation within the defined time frame. These controls are similar to traditional accounts payable processes and include an approval process for costs at certain levels. They also must be consistently adhered to throughout the project with an audit trail that catalogs all activity. As a general rule. costs. Best Practice: Institute strong project governance prior to the start of any ERP implementation. Scope As mentioned above.Denver. audit trails and executive oversight. All elements of the project should be controlled. the scope of an ERP project is layered with assumptions that support the SOW. ERP projects that do not have effective change controls have higher implementation costs. manager sign-offs. The governance and controls of the project should outline how scope changes are handled. Likewise. All Rights Reserved. CO 80209 720-515-1377 Panorama-Consulting. Unapproved scope creep in a project can pose significant risk. Best Practice: Ensure that scope and related decision processes are tightly managed as part of the overall project governance.implementation success. These individuals should be actively involved in all ERP-related issues. Implementation Initiation ERP projects should include a functional and technical manager that supports the project manager with the core team and SMEs underneath this management structure. Typically.

Senior management must be actively engaged and resources must be readily available. technical and project turnover issues. All Rights Reserved. Additionally. Consistent messaging will help to ensure that employees support the project.Suite 720 . intranets. The approval of any customizations should be considered critical to their associated value because their development is expensive. Communications between the vendors and the project team must be organized and consistent with clear authority. if the risks to critical tasks are identified quickly. Internal communications should provide key. CO 80209 720-515-1377 Panorama-Consulting. Communications The management of communications is critical to the success of an implementation project. then costs can increase. Communication plans should include a messaging strategy that targets specific departments of the organization as well as the organization on a whole. understand the company’s objectives and are prepared for changes.Denver. If the vendor is receiving multiple or conflicting directives. Likewise the work must be validated through testing procedures with real data prior to go-live. Best Practice: Establish directives between the vendor and project team at the start of the implementation. These risks should be identified at the beginning of the project. then the management team should be able to arrange resources and strategic measures for Page 7 of 17 3773 Cherry Creek North Drive . posters and the like. Risk Management Planning Every ERP project has a set of critical tasks that must be completed before a successful implementation can occur. These controls should be managed through an approval process. time is managed through a project plan that outlines a set of tasks within clearly established milestones.Time Traditionally. Best Practice: Ensure your communication materials encourage dialogue between end-users and management. Best Practice: Use a project plan to manage time (as well as tasks).com © Copyright 2012 Eric Kimberling. The tasks themselves are managed through specified resources and/or personnel within the project’s management structure. Best Practice: Define project “stage gate” reviews at key pre-defined milestones throughout the project in order to mitigate risk. Quality Quality controls for an implementation project include procedures to validate all configurations and customizations. In theory. All messaging regarding the ERP implementation should be planned according to organizational and project objectives and must be consistent through go-live. branded information about the implementation project to employees through newsletters. . configurations and customizations are often outside the scope of the original SOW. These include functional.

In my experience. CO 80209 720-515-1377 Panorama-Consulting. Commitment of User Community There is no disputing that a lack of end-user involvement can pose a serious risk to the implementation of an ERP system.Suite 720 . Best Practice: Solicit the opinions of strategic members within the end-user community (traditionally managers) that can represent the opinions of a broader functional area during the blueprinting phase.these critical tasks so that the project is not jeopardized if problems do occur. This practice is the best way to effectively manage the risks associated with completing an ERP project. Best Practice: Cooperation between divisions is best enabled with a robust organizational change management (OCM) plan.com © Copyright 2012 Eric Kimberling. In rare instances. (Blueprinting is the phase of process mapping and decision making for determining when the system will be used. however. All Rights Reserved. One of the key values of ERP software is that it helps companies perform their operations in a more consistent way across different concerns.Denver. Cooperation of the Divisions In a large. . the reverse also is true. The value of this involvement is twofold: 1) it ensures that a company’s entire business processes are considered while defining requirements and designing the system. Best Practice: Build a risk mitigation strategy that outlines resolution alternatives for tasks along the project timeline. Too much end-user involvement or unstructured end-user involvement can quickly overwhelm a project. multi-office ERP implementation. companies decide to leverage one Page 8 of 17 3773 Cherry Creek North Drive . offices and departments. Uncontrolled end-user involvement can result in a derailed timeline due to the endless gathering of conflicting requirements with no cut-off date and/or the addition of costly requirements that are of little or no value to the ERP project or the overall business. Interfaces The value of ERP systems is that they eliminate the need for multiple software systems and keep most or all of a company’s operational data on one platform. Companies that have multiple offices or business areas or who have grown through acquisition generally have inconsistent and non-standardized business operations. Best Practice: Insist that standardized processes are defined across an entire company early in a design phase and then conduct a phased roll-out of that standard software functionality to geographic offices.) Complexity of Operations Many organizations that implement ERP do so in order to simplify their complex operations. Input from these teams is extremely important if a company is attempting to standardize processes and corresponding software functionality across multiple business units. However. which should be incorporated into the overall implementation plan. end-user communities are not particularly strategic and tend to look at an ERP project through a narrow and highly personal lens. cooperation and involvement from various divisions and departments is critical to success. and 2) it builds employee buy-in and support of the project so that they will not fear or resist the corresponding changes from the new system.

training and skills migration plan for your internal IT group. This can include functions such as check printing. and how to provide corresponding help-desk support to employees to enable them to use the new system. Changes of this type represent a significant investment in time and cost. the more complicated the company. background. Best Practice: Ensure a robust organizational change. Configuration and Customization While some ERP packages are advertised as “out of the box” (i. In general. Configuration. The configuration choices are available as a part of the system’s flexibility and do not require any changes in the program code. CO 80209 720-515-1377 Panorama-Consulting. IT staff needs to be trained on how the software works. refers to the options for process flow. This elevates implementation risk and necessitates both more technical skills and overall system testing. custom purchase orders and invoice creation. Most large companies request changes to their ERP software to address particular requirements. Customization. ERP System Personalization. The first and simplest level of change. Best Practice: Fully test interfaces with other systems as part of a comprehensive business. configuration. Further. The third level of change is “customization” or “modification. how to both maintain and continuously improve the software. every company has a unique need for their logo and other information on some documents. font. In addition. business processes and workflows. functional and integration-testing plan.e. There are three different levels of change to ERP systems during the implementation process: 1. To conduct these tests and go live safely.” Customization refers to changes required by the client that the system’s design does not support and therefore require a change in the program code. Personalization. 2. Effect on Information Technology (IT) Operations ERP implementations have a tremendous effect on the IT department. data flow. Production and Test Environment Architecture and Build-Out All configurations and customizations must be fully tested prior to introducing the system to employees. personalization includes the options for the look and feel of the system that available. They can make acceptance and testing of later releases of the software another customization project.. The second level of change. the more complicated the configuration and the more likely that change will be needed.” Each Page 9 of 17 3773 Cherry Creek North Drive . screen and dashboard layout of the system. . 3. IT operational staff need to understand configuration and customization tools so they can maintain and support the system in the long-term without reliance on outside consultants or technical staff. to be used as delivered with only the configuration and set-up required by every ERP software package). All Rights Reserved.or more third-party systems to increase the functionality of the core ERP system. Personalization includes choices like the color.Denver. calculation and data association that the system provides. ERP software is a highly configurable solution. which generally requires configuration or enhancements. most ERP software requires at least some changes or adjustments in order to perform optimally. The potential usage of an ERP system is determined through configurations or changes to the system.com © Copyright 2012 Eric Kimberling.Suite 720 . logos. ERP systems are deployed in multiple “environments.

com © Copyright 2012 Eric Kimberling. This is particularly important if interfaces are developed between two systems. There are different types of tests.Suite 720 . an ERP system should include the following: performance testing. The design and development of a separate “production environment architecture” creates a secure environment. This practice clearly identifies key issues prior to going live. Software Testing and Conference Room Pilots Testing is a critical component of a successful ERP implementation. An established testing environment with defined controls for validating processes and procedures is critical. ERP systems are best deployed in the three distinct environments mentioned above. bandwidth. Integration Testing Although an ERP system should be used throughout the organization. Performance testing mitigates some of the performance risk associated with going live. separate from testing. Functional testing should be conducted with real (historic) data. performance testing also includes stress testing of system overload to identify points at which the system could potentially crash. integration testing is necessary to ensure connectivity between the systems. load parameters and so forth. even if data conversion is not complete. If multiple systems are used. such as acceptance testing for a particular process or scenario testing for a particular situation. test environment and development environment. Although some organizations choose to combine the testing and development environment for cost reasons. ERP software testing is not limited to performance. These issues can be resolved in the development environment and retested until the issue is corrected and ready for a production environment. Best Practice: Include user sign-offs to validate both modified and unmodified elements of software functionality during testing. Converting software often results in an overhaul of the entire IT platform (including infrastructure). In addition to load-related testing activities. Performance Testing A key goal of ERP implementations is technical performance. particularly configured or customized processes. As a form of best practices. This is a critically important method of early detection to avoid finding the same errors after go-live. functional and integration testing. ERP systems have minimum requirements to function properly. to control the system modules that are ready for production after the go-live. and current production. . development. These tests can take different forms. Best practice is to conduct performance tests in a testing environment prior to go-live. The minimum requirements for the functionality must be tested prior to go-live to catch any issues early. It is critically important to Page 10 of 17 3773 Cherry Creek North Drive . All Rights Reserved. and integration testing. Functional Testing Process customizations and configurations are natural parts of an ERP implementation. Validating the accuracy of real data is easier for end-users than validating the accuracy of unfamiliar data.Denver. three environments are set up during implementation: production environment. Best practice includes functional tests for all processes. At the most basic level. Consequently.environment is a separate location for the software and data and is used for different purposes. which is usually not known until after the go-live. specific legacy or third-party solutions are sometimes necessary to address a particular function. the production environment should be separate from untested software or development efforts. These requirements include limits for capacity. CO 80209 720-515-1377 Panorama-Consulting. functional testing. This is because the combined environments can create erroneous practices such as conducting acceptance testing simultaneously with development efforts. Functional testing validates the accuracy of the processes within the system.

com © Copyright 2012 Eric Kimberling. If business requirements are constantly added to an implementation. Once a gap analysis is conducted. . CO 80209 720-515-1377 Panorama-Consulting. (For clarification. Defining Business Requirements The definition of business requirements is a fundamental milestone and an absolute necessity to realize any form of success with an ERP implementation. the blueprinting phase includes future interfaces and data mapping. These definitions should be finalized prior to any configurations because any change to the definitions has a corresponding impact on the configurations. and “to be” processes to configure the ERP systems. the blueprinting phase simultaneously defines and reconciles functional gaps for business processes and workflows because the “to be” processes are suggested through pre-configured processes and either used or altered. All configurations and any customizations must be reviewed and tested to validate that the delivered changes address the desired business processes and requirements. The documentation of the business processes and workflows should be developed with SMEs that are key system users and functional process owners to include their valuable insight into the system functionality needs. The development. This practice helps to identify areas of uniqueness within the business as well as competitive advantages. This effort lays the foundation for all gap analysis and reconciliation work and ultimately produces a static definition for “to be” business processes. Best Practice: Conduct a gap analysis that outlines the functional gaps between current and future states. Additionally. gap analysis. All Rights Reserved. all implementations require process mapping for “as is” processes. The business process and workflow reconciliations migrate “as is” business requirements to “to be” business requirements. This is primarily managed through conference room piloting and end-user acceptance testing. If a company does not define all Page 11 of 17 3773 Cherry Creek North Drive . then the software is either configured or customized to meet the desired needs. interfaces and conversion development. the realization phase begins.) After blueprinting is completed. then the scope of the implementation will grow beyond resource constraints and will become increasingly difficult to complete. In addition to process mapping. As a result.test every aspect of functionality and connectivity prior to going live to identify any issues as early in the process as possible. all business processes and workflows must be defined within the system. Given that ERP software is configurable. defining business processes and workflows within a future state occurs during the blueprinting phase.Suite 720 . In the software’s methodology. If pre-configured processes are not used. which involves creating baseline configurations required for “to be” process functionality. The practice also helps to qualify the functionality of a system and can serve as a baseline for detailing a final set of requirements for the implementation of the system. Best practice for this effort is a gap analysis that outlines the functional gaps between current and future states. review and finalization of business process and workflow definitions are fundamental implementation deliverables. the methodology uses pre-configured processes to expedite the delivery of the ERP system. Best Practice: Create an end-to-end model with sign-offs from authorized managers to establish buy-in and to verify the accuracy of the requirements. The implementation team must understand all functional areas of the business prior to implementing the software. planning to address functional gaps can begin.Denver.

CO 80209 720-515-1377 Panorama-Consulting. the more you need to sort through at conversion and the more likely to impact go-live. the more data you bring over. thereby lowering the required data needed for migration and cleaning. which can be costly and dangerous because development efforts have already begun and will require rework. a customer’s address may be recorded as 2900 Franklin Way or 2900 Franklin Way. how about an item that has not been sold in the last five years? The last three years? How about an item that you no longer manufacture? A customer that has gone out of business or not bought anything from you for the last three years? All closed sales and purchase orders? Determining the data that needs to be kept can be quite arbitrary and dependent on the industry and purpose the data provides. Data Migration The migration of a company’s data history from its original systems to a new ERP system is one of the most fundamental tasks of an implementation. Best Practice: Define clear rules and formats for the data being migrated. In most cases. Migrating clean data has both organizational and implementation ramifications. Forecasting needs to be considered as well. There are no hard and fast rules. It is important to note that each functional area may have a compelling reason why they classify data in their respective ways. Data cleaning involves the standardization of data fields. What is junk? Well. the owner to clean these records is not the IT department. Companies are responsible for cleaning the data so that it can be converted. then critical components can get overlooked. both need to work together to ensure success. All three references identify the same customer. Completing data cleaning efforts may require external experts to hasten the process. such as for auditing purposes.Suite 720 . As a result. For example.Denver. A key part of data cleaning is also getting rid of or “junking” old or useless data. for example. Within an organization. critical data may be stored differently. All Rights Reserved.com © Copyright 2012 Eric Kimberling. 200 or 2900 Franklin Way Unit 200. or installed poorly during the implementation. This lack of definition can also lead to additional requirements during an implementation. Someone still needs to know.business requirements across all the functional areas of the business prior to implementing an ERP system. values. While there is data cleaning software. Simply put. It is this data integrity and accuracy that a company must seek. There is a range of quality tools (typically provided by software vendors) that are designed to quickly migrate data into an ERP system. but management needs to come to firm agreement on what does or does not need to be kept as decisions can span several departments. these packages can only help identify potential areas and records to be cleaned. tables and so on across all functional areas throughout the systems for all the history being migrated into the new system. data migration is oftentimes a burdensome task during an implementation. not installed. . Bear in mind that different industries have different regulatory requirements that may need to be considered. All data being migrated to the new system – including live data entered on or during the go-live and legacy data – must be “cleaned” (or standardized) before it is introduced. Ste. most of these might be addressed using paper records. There is a general misconception that the IT team can handle all of the cleaning. Some regulations restrict the ability to change certain kinds of data records. However. Some govern the length of time records need to be kept. Or someone knowledgeable needs to be able to verify that the closing balance is in fact correct. which is the correct out of two different address records for a company. such as HIPAA with Electronic Medical Records (EMR) or PCI DSS with credit card data and transactions. Defining these rules may require executive decision-making to settle functional disputes. but the actual functional departments or users. However. Page 12 of 17 3773 Cherry Creek North Drive .

temporary employees) are needed to support the effort. Early efforts must define how much data will be migrated and how the data will be migrated (standardized numbers.In-System vs. Downloading data and changing it in Excel is often used when there are fields that are not in the legacy system. the data migration process should include the use of tools that simplify the export of data from the legacy system. Excel There are pros and cons for both methods of data cleaning and I often use both. . CO 80209 720-515-1377 Panorama-Consulting. Companies must repeat steps three through five until system is ready to go live.). the process can significantly delay an ERP implementation. These steps include validating final processes and verifying the organization’s readiness through process manuals. Page 13 of 17 3773 Cherry Creek North Drive . business process reengineering is unavoidable during an ERP implementation. Best Practice: Implement a clear strategy at the beginning of the project and use a dedicated team and team manager to achieve it. The time associated with this process is dependent on the amount of data being converted and the team of individuals migrating the data.com © Copyright 2012 Eric Kimberling. In-system cleaning is to correct the data in the legacy system database. defining more detail as the software is designed and configured. These efforts should begin as soon as possible. Because an organization cannot go live until the history is properly migrated. To ensure both go-live and post-go-live success for end-users. A resource assessment also should be done to identify if additional resources (e. Business Process Reengineering Modern ERP systems are configurable and require defined processes and workflows. all converted data must be tested in the new ERP system. and the like.Denver. Systems Go-Live Preparation for the go-live begins well before the actual go-live date. Additionally. support structures. addresses. These tests should validate that the system can operate without system errors that could lead to business interruptions. configure solution. run tests.Suite 720 . Best Practice: During go-live. perform gap analysis. Best Practice: Begin business process mapping.g. particularly in organizations where structured approvals are necessary. The reengineering process is an iterative process during an implementation that includes the following steps: define requirements/processes. All Rights Reserved. A series of steps needs to take place prior to going live. As a result. There also should be training or procedures put in place to ensure minimal cleaning is needed moving forward. there must be a step-by-step manual of the processes and procedures outlining how each employee will perform their jobs in the new system. combine on-site assistance and documented processes and procedures for end-users. and address gaps. Additionally. These manuals serve as useful tools both in training new users and helping all employees retain knowledge after training. The organization’s final processes within the system should be validated through associated approved tests at the end-user level. improving and re-engineering prior to implementation. This method is good especially if you intend to keep a final snapshot of the legacy system for your records.. etc.

only half of companies surveyed realize 50percent or more of the business benefits expected from their ERP systems.“Cutover” is the moment at which the old system ceases to be primary. A go-live should be a structured process in which errors are detected and resolved. related training. All Rights Reserved. The golive cutover is a seminal moment in an implementation that can define success or failure. poor morale. Organizational Readiness Assessment and Risk Migration Plans There are varying levels of readiness for an ERP implementation within an organization.com © Copyright 2012 Eric Kimberling.Denver. A readiness assessment should be conducted to understand which areas would have the most trouble implementing an ERP system. training and organizational design.Suite 720 . Page 14 of 17 3773 Cherry Creek North Drive . role and responsibility definition. Best Practice: Employ an end-user validation process during the cutover to verify success with signoffs. or limited capabilities. Organizational Change Management (OCM) Organizational change management (OCM) focuses on employee transition to the new system. and communications. The project manager should verify all measures and adequate technical support should be available for any problems that may emerge. This should be conducted during non-working hours so that end-users can validate the system’s accuracy in a low-volume environment. Site order should be selected strategically for go-live based on the complexity and magnitude of the implementation. Best practice is a post go-live audit review or assessment with recommendations. A company should determine where there might be employee resistance and create risk migration plans that include customized training plans. The first go-live offers valuable insight into potential problems for the next sites scheduled to go-live. including the implementation of new processes. communication plans. Any bugs. According to research published by my company. The actions that successful OCM projects support include process development and change. Best Practice: Continue support after the go-live by collecting employee feedback and offering further assistance if needed. OCM is a key success factor for any ERP implementation because the software cannot be used if members of the organization cannot understand and apply it. Go-Live Cutover Lessons Learned A large multi-site implementation plan requires a phased approach with an initial site “going live” on the new system. processes are reviewed and sentiments from the end-user community are gathered and evaluated. CO 80209 720-515-1377 Panorama-Consulting. Benefits are never guaranteed. discrepancies and end-user training issues must be identified and resolved immediately. A full 54-percent of ERP projects run over schedule and 56-percent of projects run over budget. communication. and the new system is online. Lessons learned should be incorporated to mitigate risks and increase the success factors for future implementations. This precaution is necessary given that the system deals with live data after the cutover. Employee difficulty or resistance can occur when there is tenured staff. followed by rollouts to subsequent sites. Panorama Consulting Solutions. . poor technical and business resources. and organized resources to address the resistance.

Sufficient training is reflected by the readiness of an organization for a new ERP system.Communication and Training Plans In successful implementations.com © Copyright 2012 Eric Kimberling. CO 80209 720-515-1377 Panorama-Consulting. Best Practice: Identify and mitigate resistance through organizational assessments that segue into communication and training strategies prior to go-live. Page 15 of 17 3773 Cherry Creek North Drive .Suite 720 .Denver. All Rights Reserved. Communication and training plans are essential to forming positive attitudes and a cultural acceptance towards the acquisition of the new skills needed to succeed. are often concerned that they will lose much of their workplace prestige if a new system is implemented. It is rare to see an ERP implementation without a significant level of employee resistance at the start of the project. Experienced users. who gained power within the organization because of their understanding of the legacy system. end-users are adequately trained on the new ERP system. . Employees are typically concerned about being forced to depend on a new system without proper training.

Looking Forward Page 16 of 17 3773 Cherry Creek North Drive . CO 80209 720-515-1377 Panorama-Consulting. ERP Software and Vendor Selection Chapter 3.Suite 720 . ERP Implementation Challenges . These ERP best practices and critical success factors will be covered in more detail in forthcoming chapters of this book: Chapter 1. . Analysis of Specific Systems Chapter 4. . Strategies for Preparedness Chapter 2. Realizing Benefits and ROI Chapter 8. Achieving Implementation Chapter 6.Denver. ERP success requires careful and experienced management of all of the above implementation critical success factors. Clearly.Conclusion and Summary The above introduction provides a summary of the ways that organizations can and should leverage best practices to make their ERP implementations more successful and effective. . instead. there is no one component that will make a project. Organizational Change Management Chapter 7.com © Copyright 2012 Eric Kimberling. and Failures Chapter 9. All Rights Reserved. An oversight or shortfall in any one of the above areas can be the difference between success and failure and there is very little margin for error. Planning for Implementation Chapter 5.

Suite 720 . Coors. Eric began his career as an ERP organizational change management consultant and eventually broadened his background to include implementation project management and software selection. Page 17 of 17 3773 Cherry Creek North Drive . the world’s leading independent ERP consultant. and Six Sigma. CO 80209 720-515-1377 Panorama-Consulting. In addition to extensive ERP experience.About the Author After 15 years of ERP consulting at large firms including PricewaterhouseCoopers and SchlumbergerSema. Samsonite. He currently serves as the managing partner of Panorama Consulting Solutions. merger and acquisition integration. Throughout his career. including Kodak.Denver. and ERP implementation project management experience. Duke Energy. and Lucent Technologies to name a few. strategic planning. ERP organizational change. Eric has also helped clients with business process re-engineering.com © Copyright 2012 Eric Kimberling. Eric’s background includes extensive ERP software selection. Eric holds an MBA from Daniels College of Business at the University of Denver. All Rights Reserved. Eric has helped dozens of high-profile and global companies with their ERP initiatives. Eric Kimberling realized the need for an independent consulting firm that really understands both ERP and the business benefits it can enable. .