Over the past decade, businesses generated an unprecedented quantity of patents, products, and profit models. This trend of consistent expansion is accelerating—2015 being one of the most innovative years in history. In order to thrive in this age of explosive growth and competition, businesses must maximize resource efficiency. And, to do this, they must have tools that are in line with the pace of the 21st-century marketplace.
Arguably the most important of these tools is an Enterprise Resource Planning (ERP) software package. Industry leaders consider ERP software the cornerstone of their company’s organizational and operational efficiency. Yet, some business owners and executives consider ERP software cost-prohibitive due to the oftentimes shocking cost of adopting and implementing an ERP package. However, businesses can avoid many unnecessary costs, and significantly reduce their bottom line by following a series of steps.
We detailed these steps in a White Paper and broke it down into a series of articles. In the fifth article of this guide, we talk about a major pitfall that affects 75% of implementation projects: postponing the go-live date.
- Article 1 (Chapter 1): ERP Software Selection: Where Should I Start?
- Article 2 (Chapter 2): How to Create A Winning ERP Implementation Team
- Article 3 (Chapter 3-4): Do I Need to Customize my ERP?
- Article 4 (Chapter 5): How Can I Save Money on ERP Training?
- Article 5 (Chapter 6): How To Make Sure You Will Not Miss Your ERP Go-Live Date
- Article 6 (Chapter 7): What is the Executive’s Role in an ERP Implementation?
- Article 7 (Chapter 8): What is the Best Approach to ERP Implementation?
Chapter 6: How To Make Sure You Will Not Miss Your ERP Go-Live Date
Stick to the plan
Panorama Consulting – an independent ERP consulting service – revealed the average duration of an ERP implementation is 14.3 months. Likewise, the study revealed 75 percent of implementation projects exceeded their initial estimated timeline. No matter the vendor/package, there is almost always an inevitable correlation between the timeline and cost of an implementation. If the company has properly defined the goals around timing and longevity of the implementation and conveyed these figures to the firm, a final go-live date can be set to steer the entire project.
One measure that can be taken to ensure the project and its stakeholders remain on pace is a detailed, granular project plan. Although project mgmt. in general is sometimes notorious for being a waste of time and budget, if performed properly it can actually help drastically reduce costs to the overall implementation. An effective project plan will include not only detailed tasks/executions required to complete the implementation, but also supplemental dates, assignees, due dates, predecessors, completion percentages, and remarks sections. If every task required of the implementation has an owner, and a commitment date, it is much easier to promote accountability for all stakeholders. Psychologically, when a resource sees their name next to a commitment, they are much more likely to fulfill the responsibility, as opposed to seeing the task simply assigned to the project in general (without a particular member of the team being responsible). Commitment times and due dates will help to organize the schedules and workloads of both the implementation consultants/project managers and the internal resources involved in the implementation. Without due dates, resources (and even consultants) are more likely to delay or procrastinate in their project assignments until ‘crunch time’. This type of behavior usually results in an overall bottleneck in the project, an extension of the final go-live date and increased project costs.
Strike While The Iron Is Hot
As the timeline changes and grows during the implementation, the project becomes more susceptible to cost drivers and risks. In the software world (from a retention and education standpoint), it is best to take the ‘strike while the iron is hot’ approach. In an extended project, much of the training and knowledge transferred during the initial courses will be diluted and eventually forgotten, which will require additional hours and capital in the form of re-training and extra courses.
Another unforeseen effect of extending the timeline of a project is the implications of seasonal trends and how they correlate with resource availability, time restraints, cash flow, and other key factors that can smother the success of an implementation. Take for instance a project that is slated for an April go live. In the initial planning phases, research and collaborative discussions established that April was the month with the least operational volume. Thus, resources and stakeholders would be able to roll out the new ERP during months that were more forgiving in terms of chaos, time, and volume of business. During the implementation, various setbacks to the project plan and timeline dictated an August go-live (which happens to be the company’s peak month of volume). The risk of a problematic, both in cost and morale, go-live is much greater in this month than the original April target.
In the sixth article of this series, we will explain the role of management during an implementation. Leaders are the catalyst of an organization and their energy is decisive in the success (or failure) of an ERP implementation. The sixth article will cover how to leverage this facet of your company for the general benefit of the project. It will be out soon, but if you don’t want to wait, you can download the white paper “How to cut costs during your ERP implementation: a step-by-step guide to avoid unnecessary costs” now: Download.