Enterprise Resource Planning, or ERP, solutions have been the largest and one of the longest-running business software solutions on the market. When implemented correctly they are the key to operating a complex business with efficiency, automation, and visibility. By the same token they can be the source of tremendous pain when their functions are not aligned with the organization that uses the software. We're not here to talk about how to pick the right solution today (though you can find more on that here), but rather when do you implement an ERP solution? There are many right answers here and it will always depend on your specific business. However, the industry best practices for ERP point to 3 main reasons to implement ERP for your business.
- When you're starting a business and expecting growth. Your processes, data, and organization will never be more ready to implement a new system than when they are relatively new as well. Most professionals in new companies bring years of experience in a related field and deep knowledge of best practices around processes and operations. Use this to implement before bad habits form and the old adage, "garbage in, garbage out*" applies.
- Your daily operations are manual, time intensive, and opaque. If you find yourself manually updating repetitive reports and reviewing data line by line - it's time to look for new software. Modern software should automate day to day repetitive tasks and provide you with the insight into your business to respond quickly and decisively. Anything that takes you away from strategic activity should be automated so you can make the best decisions for your business and provide sound strategy instead of keying data.
- You are planning an expansion/acquisition. If you are planning on growing rapidly you need to consider updating your current ERP. If you haven't made a change in the past 5 years, there is a good chance your current system will struggle with new processes, data, and operations from expansions and acquisitions. There will be more data, new operational considerations, and new staff members working in your system or even worse - their own system that you will need to import into yours. All of this opens your business up to risk and will require more time to smoothly operate. Implementing a new system capable of handling the growth and applying standard operations across the organization will allow you to operate nimbly and make the best use of your time.
I've decided to implement, now when exactly should I do this?
Congratulations, the "decision fatigue, extra meetings with vendors, and convincing your own team this is the best move" portion of the project is done. Now for the work of implementation. The burning question? When do I do all this?!
- Start with the end in mind. Pick a date, early on in your evaluation process, for when you want all of your operations on the new system. This will allow you and your vendor partner to correctly allocate time for a proper implementation including testing to hit the target date.
- Try and implement during a seasonally slower time of year for your business. You don't want to be in the middle of writing new processes and data transfer at the peak time for your business. Give your future self a break and plan this project when you may have a little extra bandwidth.
- Implement in Stages. Most ERP systems involve accounting, shipping, operations, and other parts of your business. Most systems will implement best in stages. Your teams will thank you and your implementation will go smoother if you plan accordingly.
- Go Live before you Go Live! Test the system with your data before you go live. This sounds simple but beyond standard testing, you and your team need to operate the system using your live data before you make the switch from your old system.
*This is a common phrase that serves as a warning for using bad data to inform a system. No matter how good the software, it is only going to be as good as the data feeding the decisions.