Maybe you’ve decided to join the bandwagon and implement enterprise resource planning, or ERP, in your company or you’re upgrading from your current ERP system. The scary part can be making the change. Should you drop everything and launch the ERP all at once or can you implement it in phases?
Pros and Cons of One-Time ERP Implementation
In general, it’s riskier to make the system go live all at once than implementing it in phases. Because ERP software is designed to integrate multiple aspects of an enterprise, everything is hinging on something else. If one aspect breaks, it can set off a chain reaction. If you’ve implemented the tool all at once, it can be difficult to reverse and reestablish systems as they were before.
In addition, going live in multiple departments means you’ll need all hands on deck. The IT department as well as the software vendor must be available to mitigate problems. A large company may have the resources to abate that risk. However, a smaller business may not have enough support to prioritize all the complications that can occur with a complex system launching all at once.
In addition, consider the general workforce. Will routine activities need to be put on hold while launching the ERP and getting things going? Your company may not be able to experience a hiatus in operations like that. There is usually a performance dip as employees are getting used to the new software.
If multiple areas of the company are dependent on a primary department, it may help to launch all at once. For example, if multiple supply centers rely on one hub, it may be necessary to update the ERP among all of them at the same time.
Because executing a one-time ERP rollout can save time, it can also save money. You’ll use fewer resources because the changeover will typically be faster, and you won’t have to train employees on any temporary systems.
Pros and Cons of Phased ERP Implementation
Implementing ERP software in phases adds an element of control. If things go south with one function, you can examine what went wrong on a limited scale. Once you’ve figured it out, you can use that knowledge to ensure the same thing doesn’t happen when you launch the ERP throughout the rest of the company. Phased rollout is usually executed by module, location or business unit.
There is typically less of a performance dip, if it occurs at all, with a phased rollout because employees are able to learn as the modules are implemented. The technical team can devote focus to each segment as it’s being launched, preventing the company from overextending its resources.
However, phasing in the software can leave certain departments unable to work together, at least temporarily. During a phased implementation, you may need to create temporary interfaces to keep systems communicating with one another or create a manual system of interaction until the entire system goes live.
A phased rollout can be lengthy and require more money and manpower. You may have to endure several adjustments as the modules interact with each other, which can require more work on your part and on the part of the software vendor.
Best Practices for an ERP Launch
If you want the ERP implementation to go smoothly, whether you do it in phases or all at once, keep the following advice in mind.
- Mock it up – Before you go live with the new system, create a simulated launch with the primary employees who will be involved. Go over transactions, work flow and reporting. You’ll get to forecast potential snafus and sort them out before the real launch, and employees will have a sense of what’s coming. In short, you’ll preempt many of the first-day jitters and jinxes.
- Support yourself – Keep your IT staff and vendor support team closer than ever. As you go live, make sure everyone has access to personnel who can help troubleshoot issues.
- Have something to fall back on – Prepare some operational procedures to follow if the execution doesn’t go as planned.
The number of companies that use the one-time execution is comparable to the number of companies that choose to phase in the new system. Implementation really depends on your business size and type as well as factors like locations and goals. Some companies use a combination of one-time and phased rollout, implementing the primary modules at once and adding nonessential modules later. Regardless of your strategy, prevent problems during an ERP implementation with meticulous planning and organization.