ERP life cycle

helps streamline business operations and reduce unnecessary expenses. The process of its
implementation to automate business processes is referred to as ERP implementation
life cycle.

8 stages of ERP implementation life cycle

Step 1: Selection of package

Every business is different and so are its needs. Thus, choosing the right ERP software for
your business is the first and the most important step. With numerous options available in the
market, it could be rather daunting to choose the right fit for your business operations. Thus,
in this step, ERP modules that do not fit your requirement are eliminated.

Step 2: Project planning

When kicking off any project, it needs to be planned out perfectly, so that there are no
surprises during the implementation. From choosing the right resources to allocating tasks to
respective team members, planning is key to achieve accurate ERP implementation.

Step 3: Analysis GAP

Another important step in the life cycle of ERP implementation step, GAP analysis is
performed to evaluate and compare the current system of the organisation and its future
position as needed. This way you can easily identify the key processes that need the most
attention with your ERP.

Step 4: Re-engineering
To make the process more efficient and worthy, re-engineering is implemented as the process
involves several changes and alterations based on the planning and gap analysis.

Step 5: Training
Since there is a new system in place, it will require for employees to get proper training so
they can start using the product, seamlessly.

Step 6: Testing
This is another crucial step in ERP implementation life cycle. It is basically carried out to
assess the errors and try to resolve them before the actual application process.

Step 7: Application
This is the stage where the actual implementation of the ERP system occurs. Once all the data
is collated, analysed and converted to be fed into the system, the new implementation is
applied, and the older system is discarded.

Step 8: Maintenance
The last and the final step, of the ERP life cycle is maintenance. Now that the new system is
in place, it is the responsibility of the employees working on it to stay updated with the latest
technology offerings. Employees also need to learn how to keep the system up and working
whenever the need arises.
ERP success factors

1) A clear understanding of strategic goals

The scope of your project is the foundation for the needs of the project and the resources that
would be required. Therefore, you need to analyse business objectives and ensure that your
ERP strategy wraps around those objectives. You should understand what your business is
trying to achieve with an ERP package to get a highly successful project with huge benefits.
Make sure that everything is documented and place clear expectations upfront and set your
overall goals.

2) Focus on planning to optimize business processes

After outlining your ERP objectives there comes the planning phase. ERP is a complicated
software product that needs time to integrate with your business. Provide adequate time for
every step, ensure that significant milestones receive priority, and manage schedules tightly. 

KPI validation is the most critical success factor of the planning phase. That is where you
evaluate the business advantages and key performance indicators (KPIs) established prior to
ERP selection. When analysing KPIs, you should ensure they are measurable and realistic.

3) Team involvement
Your ERP implementation core project team should incorporate the most skilled employees
from across your organization including a project manager. These internal resources should
have the capability to understand the overall requirements of the company and be committed
to important decision-making responsibility and authority. You also need to know a set of
resources from the different areas of the business to provide subject matter expertise. If a
consulting integrator is involved, then the project team to have a good working relationship
with the consultants as well.

4) Change management
ERP project implementations not only change the way people do their jobs but also process
and organizational changes. It’s essential to have adequate time to train people on new
processes and systems. Here, a change management team becomes necessary for the
organization to deal with the impact. You should encourage good communication between
the organization and the project team. Key users should be included with the project and its
development, for smoother acceptance of the changes.

5) Budget carefully
Implementation of your ERP system will bring some significant costs, which would include
software license charges, system support, training, and the help of an integrator. It’s essential
to keep an account of the cost. You can add these costs and budget accordingly so that a lack
of resources does not interrupt your ERP plan. You must also keep in mind the cost that you
will need for post-installation.

6) Project management tools

ERP implementation projects need the difficult coordination of people, technology, and
processes. If one part is overlooked or incorrect, the entire implementation can move off
track, ending up in significant problems and costs. Hence, we need to establish a system that
reduces risk and provides everyone a task-oriented, fact-based picture of the implementation,
in real-time. 
7) Ensure everyone is on board
It is important that all employees should understand the positive aspects of the new ERP
system. ERP implementation can cause challenging modifications to daily operations,
especially where ERP has never been employed before in an organization. The team needs to
adapt to this development, this becomes easy if they feel motivated and as a part of the
process. 

8) Choose the correct ERP partner

To help strengthen and guide your project’s progress, you should always work with a partner
who understands your business as well as understands the software. Pick an ERP provider
that is experienced in implementing ERP systems. For the best results, you should find a
provider with expertise in installing ERP systems for businesses same as yours. Your partner
must understand your business along with the verticals under which you operate and your
consumers.

9) Do not skip on training

No plan or approach can work throughout the organization without a proper training program.
A combination of techniques may be required to maintain employee proficiency. Training
enhances engagement and decreases staff frustration, frustration, thereby rapidly benefitting
productivity. So, it’s necessary to plan out this implementation with programmed training to
avoid ERP implementation failure.

10) Set the most realistic timeframe

You have many expectations when you finally choose to implement an ERP system, from
assuming that the ERP system will resolve all your organizational problems, to imagining an
immediate ROI and more. One cause for unrealistic expectations is that several companies
are essentially focused on only the technical aspects of implementation. You should break
every component of the implementation into steps, with a fixed timeframe for each. These
steps will also require allocating time for any possible and unexpected issues and extra time
required for fixing them.

11) Ongoing Refining and Maintenance

An essential success factor for the optimization phase is performance benchmarking. You
should always plan for post-implementation improvements that can additionally improve the
benefits that ERP delivers to your business. Periodic evaluation of the efficiency of your ERP
system will help pinpoint where your ERP project is running, and where can it improve.

Common Pitfalls When Implementing ERP Systems

1. Lack of Governance
A successful ERP implementation requires strong governance and oversight from the
beginning. A good framework for decision rights with accountability. Without a clear and
concise governance framework in place, it can be challenging to make the right decisions,
track progress, and manage expectations during ERP implementation.

Ways to have a Governance framework

 Define the objectives and benefits of the ERP system upfront.
  Assign a senior executive as the project sponsor with an adequate budget and
authority.
 Assemble a diverse yet cohesive team with representatives from all essential business
functions.
 Create a realistic project schedule with well-defined milestones.

2. Inadequate Change Management

Many ERP implementations fail because companies do not adequately prepare their
employees for the changes that will come with a new system. A lack of change management
can lead to resistance from employees, which can, in turn, lead to various hidden challenges.

Tips to Streamline Change Management

Communicate early and often with employees about the ERP project.
Define the business processes that will be impacted by the ERP implementation.
Train employees on the new system and how it will affect their daily tasks.
Support employees during the transition with regular communications and feedback loops.

3. Underestimating the Project Scope

Many ERP implementations fail because companies underestimate the scope of the project. A
common mistake is to focus only on the technical aspects of the implementation without
considering the organisational changes that will be required.

How not to Underestimate the Project Scope during ERP implementation

 Set realistic assessment of the project scope, including all business and technical
aspects.
 Engage all stakeholders in the planning process to get a complete picture of the
project.
 Create a detailed project plan with well-defined milestones.
 Plan for potential delays and setbacks.
 Make sure you have the resources you need in order to complete the project on time
and within budget.
 Continuously communicate with stakeholders throughout the implementation process.

4. Lack of Data Quality

Data quality is critical for any ERP implementation. Without clean and accurate data, it can
be challenging to migrate and make informed decisions, track progress, and measure success.

Tips to Collect Quality data for ERP Implementation or migration:

 Assess the current state of your data before starting the ERP implementation.
 Develop processes for cleansing and maintaining data during and after the
implementation.
 Engage a third-party data quality assurance provider to help with data cleansing and
validation.
 Implement a data governance framework to ensure data quality throughout the ERP
implementation.
 Perform regular data quality audits to ensure that the data is accurate and consistent
across all systems.

5. Lack of Training
Many ERP implementations fail because employees are not adequately trained on using the
new system. A lack of training can lead to resistance from employees, which can, in turn,
lead to data entry errors, missed deadlines, and other problems.

a. Plan Ahead
It is essential to begin training employees well before the actual implementation date. This
will give employees enough time to learn the new system and adjust to any changes that may
occur.

b. Create Training Materials

Make sure you have a comprehensive set of training materials that covers all aspects of the
new system. The materials should be easy to understand and user-friendly.

c. Train Employees In-Depth

Train employees in-depth on how to use the new system. This should include how to navigate
through the system, enter data, and access reports and other information.

d. Offer Support During the Transition Period

Employees will likely have questions and concerns during the transition period. Make sure
you have a support team in place to answer these questions and help employees with any
problems they may encounter.

6. Lack of Executive Buy-In

ERP implementations can be costly and time-consuming, so it is critical that senior
executives are on board with the project from the beginning. Without executive buy-in, it can
be difficult to secure the resources needed for a successful ERP implementation.

Ways to avoid conflict from top-level executives:

 Secure commitment from the C-suite early in the process.
 Develop a business case for the ERP project that outlines the benefits and ROI.
 Select an ERP system that will support the company’s long-term goals.

7. System Integration Issues

ERP implementations often involve integrating the new system with existing legacy systems.
This can be a challenge if there is not a clear understanding of how the systems need to
interact.

a. Define the Integration Requirements

It is essential to define the integration requirements in detail before starting the
implementation process. This will help ensure that the systems are properly aligned and that
there are no surprises during the integration process.

b. Use a Standardised Process

When integrating two or more systems, it is important to use a standardised process for data
exchange. This will help ensure that data is accurately transferred between the systems and
that there are no errors.

c. Establish Clear Communication Channels

Establish clear communication channels between all stakeholders involved in the integration
process. This will help ensure that everyone understands their role and how they need to
contribute to the overall success of the project.

d. Map Out Data Flows

Map out how data will flow between each of the systems involved in the integration process.
Doing this upfront will help avoid any misunderstandings or miscommunication later on in
the project.

e. Test Each Stage of Integration

Test each stage of integration thoroughly before moving on to the next stage. This will help
catch any errors and fix them immediately, thus preventing any delays in completing the
project timeline.

f. Use a Third-party Provider

If you are not familiar with the system integration process, it may be helpful to use a third-
party provider. These providers can help you define the integration requirements, establish
communication channels, and test the integration process.

8. Implementation Overruns
One of the most common problems with ERP implementations is that they often take longer
and cost more than expected. This can be due to a number of factors, including
underestimating the scope of the project, unrealistic schedules, and unanticipated changes.

How to avoid Implementation Overruns

 Create a realistic project schedule with well-defined milestones.
 Build contingency into the project budget for unexpected costs.
 Monitor progress against the project plan and adjust as needed.

9. Over-reliance on Technology
ERP implementations often fail because companies rely too heavily on technology and not
enough on people. The success of an ERP implementation depends on the people who will be
using the system, so it is important to invest in training and change management.

a. Define Roles and Responsibilities

It is important to define roles and responsibilities for all stakeholders involved in the ERP
implementation. This will help ensure that everyone knows their role and how they need to
contribute to the project’s success.

b. Train Employees on their New Roles

Train employees on their new roles and responsibilities. This should include using the new
system, navigating through the system, entering data, and accessing reports and other
information.

c. Use Appropriate Communication Tools

Use appropriate communication tools (such as email, chat, and collaboration tools) for
exchanging information between stakeholders. This will help ensure that everyone has access
to the latest news and that communication is clear and concise.

d. Establish Procedures for Handling Issues

Establish procedures for handling issues that may arise during the implementation process.
This will help ensure that any problems are resolved quickly and efficiently.

ERP Market – renowned vendors and the packages

1. SAP
SAP has long been a frontrunner for large enterprises. Although the implementation process
can be lengthy, it is often well-tailored to any business. SAP is fully featured and offers an
ERP solution for any size enterprise.

SAP’s standout ERP platform is the SAP S/4HANA Cloud which features built-in AI,
machine learning and analytics for intelligent automation. These tools enable
organizations to free up their IT resources and improve operational efficiency.

All SAP ERP platforms include key features such as asset management, supply chain
management, finance management, sales tools and more.

2. Oracle ERP Cloud

Just like SAP, Oracle has been a leader in ERP for quite some time. And in 2021, Oracle was
named a Gartner Magic Quadrant Leader for Cloud ERP for Product-Centric Enterprises for
the third year in a row.

Oracle’s Fusion Cloud ERP includes a full range of capabilities that make it a perfect
solution for organizations across industries. These capabilities include financial
management, project management, compliance, procurement, supply chain
management and robust analytics.

Oracle Fusion Cloud ERP delivers additional features for organizations looking to future-
proof their tech stack. These features include AI automation and automatic updates.

3. Microsoft
For businesses that are already using Microsoft’s technology, choosing Microsoft for ERP
could be a smart idea. Microsoft offers robust products for small and mid-sized
organizations and is becoming a growing force, looking toward larger organizations as well.

Microsoft Dynamics 365 is a complete suite of products organizations can choose from to fit
their specific needs. Some of the products include Dynamics 365 Finance, Dynamics 365
Business Central and Dynamics 365 Supply Chain Management.

The option to choose one product or all of them makes Dynamics 365 completely
customizable and scalable. From customer relationship management to financial
management, it’s all available through Microsoft’s ERP solutions.

4. Infor
Medium and large companies, both national and global, should consider Infor, which is an
emerging solution for the enterprise, offering a set of applications specific to particular
organizations.
For example, Infor M3 was designed specifically for enterprise manufacturers and
distributors, featuring capabilities such as global financial visibility, robust analytics and
supply chain management. For other businesses within the general service industry, Infor
provides a wide range of solutions for managing operations, including payroll,
workforce management, financial management and more.

5. IFS
IFS is dedicated to serving organizations within complex industries such as aerospace
and defence, construction and engineering, manufacturing and telecommunications.
The IFS ERP solution is built on the IFS Cloud, which provides a completely composable
environment. This means the solution is completely customizable to fit your workflow.

The IFS ERP solution provides many functionalities critical for all organizations, including
financial management, human capital management, CRM, supply chain management,
procurement, project management and commerce.

6. Workday
Workday is a full suite of enterprise-level apps that promises to help organizations “move
beyond ERP.” Workday combines finance and HR functions into one streamlined
platform, eliminating the need for disparate systems.

Inside Workday, organizations have access to a wide range of capabilities, including

everything from human capital management and talent management to adaptive
planning and reporting.

Workday’s core technology includes a flexible business process framework (BPF) that
enables organizations to configure Workday in a way that works best for them, without any
coding required. This includes the ability to connect to third-party apps and services
and integrate them into any workflow.

7. Epicor
Epicor provides ERP solutions to small and medium-sized enterprises within industries
such as manufacturing, automotive, retail and distribution. Epicor offers several
platforms, each with their own specific use, ensuring organizations select an ERP platform
that fits.

For example, Epicor Eagle was built for retailers and includes capabilities such as point-
of-sale (POS), payment processing, back-office management and omnichannel
management. Epicor Eclipse was developed for leading HVAC, electrical, plumbing and
PVF distributors and includes capabilities such as supply chain management, analytics,
warehousing and inventory management.

8. abas
abas offer an ERP platform designed specifically for mid-sized manufacturers within
industries such as metalworking, automotive, electrical engineering and plastic
technology. For these industries, abas is comprehensive and includes tools for scheduling,
accounting, sales, purchasing, reporting, order processing, invoicing and project
management.
Manufacturing organizations will benefit from several additional, niche-specific features
using the abas platform such as Internet of Things (IoT), plant data collection, service
assignment planning, quality management (QM) and warehousing.

Just like the other ERP platforms included here, abas also offers simple platform
customization, enabling manufacturers to tailor their ERP to fit their unique workflows. Plus,
customization is completed using low-code tools.

9. Deltek
For project-based businesses within industries such as accounting, IT and marketing,
Deltek’s ERP solutions are some of the best available on the market. Deltek provides unique,
niche-specific tools depending on each organization’s needs. Plus, these tools are available in
the cloud or on-premises.

For example, WorkBook is a management system designed for agencies and in-house
teams. It provides project management tools, resource management tools, finance
management tools and business intelligence in one solution.

ComputerEase is another product offered through Deltek for construction companies. This
solution provides features such as construction accounting, job costing, field mobility
and service management.

10. Sage
Sage delivers robust ERP apps and tools through the Sage Business Cloud. These apps are
perfect for small businesses looking for simple and cost-effective solutions for accounting,
procurement, customer service, production, sales and workforce management.

Sage also offers ERP solutions for medium-sized, established businesses that need a bit more
than the apps can give. Sage X3 delivers everything from production management to
financial management. Plus, Sage X3 is completely customizable and can be connected with
many other integrations and apps.