Feb 04, 2021

ERP lies at the heart of digital transformation

ERP
Paddy Smith
6 min
rep
Threading its way through every business’s digital transformation is successfully implemented ERP but the challenge is daunting...

Enterprise resource planning (ERP) software is the beating heart of a digital-first business. Necessarily sweeping, complex and notoriously difficult to implement, it is a double-headed beast, either creating visibility and ease or chaos and confusion. Now, with more businesses than ever trying to unify their technological assets under this digital umbrella, it is time to unlock the secrets of successful ERP implementation and bypass the pain of getting it all wrong.

ERP – Agile and responsive

The Covid-19 pandemic has highlighted challenges in industry processes and connectivity, and placed already pressured customer service and communication under increased strain,” says Andy Campbell, a global solution evangelist at FinancialForce. “Many businesses have been able to meet these challenges in an agile and responsive manner, introducing or extending channels to market, and coordinating internal and external communication as the workforce adapts to home-based working. Modern ERP systems deliver a platform that supports these extended requirements and can be a real enabler to implementing rapid change.”

Can be, but aren’t necessarily. There are mistakes that companies commonly frequently fall foul of. Andrew Davies, lead developer for OGL Software, explains: “When implementing a new ERP system, it is tempting to take existing business processes and try to replicate them. This approach can lead businesses to be more focused on software functionality when selecting a new ERP solution, but it is more effective to focus on people and processes rather than automating existing bad practices.

“Another area which is often underestimated is the importance of clean data. Most legacy systems’ data requires cleansing as it is full of old products, and out-of-date customer and supplier records.”

ERP – Bite-sized chunks

Lisa Bowden, head of business development for solutions at Retail Assist, thinks too many companies try to do too much at once. “The risk of undertaking multi-year project implementations are well reported,” she says, “expectations are high and retailers are often left disappointed with the length of time it takes to, in some cases, simply move from one system to another – delivering like for like, with little reduction of operating costs.”

Describing this approach as “trying to fit a square ERP peg into a round market”, she says it’s better to deliver your implementation in bite-sized chunks. “Long project tails can lose sight of the original objectives and change management is used to ‘shoehorn in’ unnecessary modifications. As much as possible, stick to core software functionality and amend your business processes accordingly. Instead, engage in deep reflection on the core values of what makes a business successful and focus more on both the customer and product experience. This will differentiate businesses both now and in the not-too-distant future.”

ERP – ERP to the cloud

It’s also important to embrace a cloud-based ERP, especially with the prospect of hybrid working becoming a permanent feature of business life. John Erik Ellingsen leads Accenture’s intelligent platform services team in the UK. He says, “In this new era of ERP, nimble and flexible cloud-centric ERP solutions based on intelligence will be key. Legacy and heavily customised on-premise solutions will not allow businesses to adapt effectively. In addition, poor data management will hold companies back. Data will flow in from a vast array of internal and external sources, even including areas such as social media. The introduction of 5G will mean this high volume of data will flow into the business at a relentless pace. The underlying quality of this data and the ability to harness it, augment it, find it, secure it and analyse it effectively will be what sets organisations apart.”

Neil Andrews, digital transformation specialist at Sigma Dynamics, says a successful ERP implementation is as much about people as software. “Introducing a new ERP system into an organisation is a complex undertaking, as it impacts most parts of the business, external customers and suppliers,” he says. “It is a major engagement that does not just consider the business process or technology, but also needs to understand the impact of human factors. The ability to analyse, lead, communicate and understand business processes, how to change an organisation and how to implement the technology plays a major role in a successful project, and engaging and bringing your teams along with this change is critical.

ERP – Choose vanilla

“In recent years, the willingness to adopt vanilla or standard ‘configured’ functionality in favour of development has increased, and can improve time to delivery, reduce risk and cost overall. This willingness to adapt business processes in line with industry and sector best practice avoids unnecessary development, and benefits all. Of course, introducing changes to the software should certainly be considered where it supports a company’s unique proposition or delivers real competitive edge.”

ERP software is increasingly in demand, across a wider range of sectors and business types. For Andy Campbell, “Covid has been a major wake-up call”, particularly for those still relying on legacy on-premise systems. “It has shown businesses that legacy software will no longer cut it and the weaknesses of relying on bolt-on systems and spreadsheets have been cruelly exposed.

“As a result of the pandemic, organisations have come to the realisation that the systems they use now must enable remote working, embrace mobile, and enable collaboration and sharing. Additionally, there must be a willingness to embrace change and adopt new ways of working, particularly with AI and advanced technology continuing to grow. If this is achieved, services will continue to develop, and the importance of a joined-up approach will become even greater.”

Six steps to ERP heaven

  1. Evaluation of systems and partner

It is important that a thorough evaluation of the different systems and business processes is carried out to clearly understand the scope and ensure all areas are covered with no missing components. Choosing the right partner is essential to success and in our experience, ensuring the culture aligns, technical capability is proven and that your partner has the right approach and scale to intertwine seamlessly with the operation and provide resource as needed is similarly critical

  1. Careful planning and communication

Ownership of the project from the very top of the business and regular communication across the business as to progress, next steps and early preparation contributes significantly to the project success.

  1. Effective resourcing

As a partner in such project delivery, our customers look for our A-Team. Resourcing within the customer team needs equivalent subject matter experts (SME) and if necessary, backfilling these roles whilst they commit to the project itself

  1. Prepare the ground

Start data cleansing and defining data strategies now or as early in the process as possible. It is very important that business process flows, data mapping and test scenarios are developed early in the implementation. These will constitute the basis for the requirements, influence the scope of the project and create the basis for acceptance tests.  If not planned early, they will affect the duration of the project and go-live plans

  1. Training of users

One of the most common reasons for business system projects to fail is the lack of proper training and support for the users. As above, the users need to be brought along in the journey, but poor training can lead to employees rejecting new systems because they simply do not understand them or how their role is impacted

  1. Test, test and then test again

Rigorous testing is more than just a hygiene factor. Developing a testing strategy is a critical success factor in ERP implementation. Testing is important to be done before the system is put into operation and serves as proof that the target image and requirements are met

Source: Neil Andrews, Sigma Dynamics

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