Selecting the right approach for ERP system implementation (COMPREHENSIVE VERSION)
Undoubtedly, there are differences in management of small and large companies. Small companies tend to multitask more, be faster in reacting to change, are more flexible in their daily operations and engage in bureaucracy less. Meanwhile, large companies usually need more routines in order to manage their business efficiently, it takes more time to pass information from one management level to another.
The size and maturity of a company impacts the implementation of any enterprise resource planning (ERP) software system. Let’s go over the main points you should pay attention to during the implementation of your next ERP software or any other major system like the lease administration software.
Smaller organizations need to educate everyone involved when implementing an ERP system sufficiently, or hire a professional ERP supplier and trust their professionalism. And they need to do it fast.
In our experience, it does not matter how well read you are in ERP implementation, the result will still be different than you expect, unless you have very clear objectives in mind. Put an emphasis on said objectives when discussing with your software supplier and check whether your wishes have been taken into account. Keep a close eye on how things work for at least several months after the system has been implemented (because only then you will start getting the results you expected).
Even if this is not the first time a large company has implemented an ERP system, experienced employees must play a leading role; otherwise, everybody will need to learn from scratch. From that perspective, it is easier for larger companies to transition to a new system and remain competent in a new environment, using previous knowledge in knowing what works and what needs to be adjusted.
2. Management and coordination
In smaller companies, all decision makers are in one place and in most cases – highly interested in the success of the project. Therefore, it is easier to solve issues.
On the other hand, the need for a new ERP system is often brought up by one particular department, e.g. accounting, sales, logistics, etc in large companies. That can lead up to the fact that the project lead – even someone from the C-level management – may not have enough sway in other departments. This in turn could lead to a longer problem solving cycle due to increased communication time. To solve this it’s best to either give someone full authority to involve necessary people from all departments to a dedicated project manager or to involve top-level managers to coordinate the project at least on a weekly-basis.
We found that it tends to work best when there is at least one dedicated person or a team, working on the project full-time. This way there’s more focus on solving issues and implementing solutions faster since there is no need to alternate between the project and day-to-day actions.
3. Implementation methodology
Implementation projects usually follow some proven methodology. Microsoft Dynamics partners have Sure Step, SAP has ASAP, and so on. Each methodology usually looks very similar: it starts with diagnostics/analysis, moves through software development to deployment and operation with supporting actions in each phase.
In small projects, some phases are merged – e.g., diagnostics and analysis or others. Small project diagnostics can take only a week and can be done remotely. That is a very short time compared to months spent on analysis in large companies. There, business processes are more complex and there are more functional user groups to be interviewed in order to see fits and gaps in the software system according to the company’s business processes.
To simplify this, the era of cloud solutions, has birthed a new approach to software implementation: companies take and use the standard software solution as it is. This works best with start-ups or new companies that are still testing a lot of their processes to find the best fit.
Still, it’s a tricky topic. From our experience, companies get their competitive advantage from their unique way of doing business. Can ERP systems therefore be standardized to the “one-fits-all” model that is the essence of cloud solutions? That remains to be seen!
Documentation is an important part of each plan. During large ERP projects, a lot of time is invested in creating and reviewing the Functional Requirements Document, Solution Blueprint and others. Is the time spent on creating the documentation spent well? Especially when some functions turn out to be unnecessary in the end or the finished product differs greatly from the documented one. And will anyone even bother to compare the two? This can lead to never-ending discussions and development. But surely the main goal is to make it work, right?
And the less experienced the project team is, the more deviations from the original document version we have in real life. Of course, it would be nice if the requirements document were living, constantly improved and updated responding to the existing situation, but from our experience there are not many cases where this is the case.
The latest practice is to avoid complicated documentation in all projects. Instead of creating a hundred-page implementation guide, create a 15-page Project Charter document instead, setting out the listed standard functionality, scope of development,and the timelines and budget for the project.That, we believe, should simplify the process and help achieve the main goal – start working with the new system and start gaining it’s benefits
Another topic is user guides or manuals. They are necessary but instead of having a standard manual, you as a customer could adjust it to your own processes during the training period. Doing so helps the employees understand how to use the software instead of how it works. This is especially true with complex systems such as Soft4Leasing. The full manual could consist of 500 pages or more, as we could describe the ins and outs of lease management, accounting for leasing with the program, thus including hundreds of scenarios in the manual as well as other financial programs. Instead we’d recommend creating a short 1-2 page manual for each role with their daily tasks.
Time is always important. Not only in the way it’s spent during project implementation, but also in redundant tasks that use up that time inefficiently. Time that can otherwise be used to further your business goals.
Implementation time often depends on more than just the size of the company. In many cases we saw delays even in smaller projects when an inexperienced or understaffed team was leading. Sometimes it can take 2-user companies as long as 20-user companies to implement, merely because of their business complexity. Keep in mind that 12-18 months are pretty standard in the ERP world.
Typically, the length of the implementation is directly related to project costs, therefore suppliers nowadays aim to shorten the implementation period by as much as possible, standardizing implementation procedures and documentation. For this reason, even complex software systems such as Soft4Leasing can now be implemented in less than 3 months in smaller leasing companies*.
Budgets for ERP implementations have been shrinking for several years in most of the world. With cloud solutions becoming more available, the price level gives way to volume – more implementations at a lower price level are better valued by buyers and investors.
It is very useful if the software you choose can be sold “in pieces” – modules, per user, per lease unit you manage, per number of contracts you have, etc. In this way, you as a customer can control your budgets better. Cloud pricing offers extremely high flexibility from the customers’ end. For example with Business Central integration you can add or remove users and adjust pricing levels as a result.
From our experience, it is worthwhile going with the base-version software if the standard functionality meets at least 70–80 % of your company’s needs. After implementation of the standard version you might want to redefine the scope of development to meet the needs of the business at the time. Things that are just ‘nice to have’ might have to wait for now and in some cases could be cut off completely – saving a part of your budget.
This is especially important for large implementations that tend to slip into never-ending development tasks, which is why their system go-live is always delayed. It could be better to start off with only 80% (for example a genuine lease calculator) of the desired functionality now and implement the rest in time than having to wait for months until you get the whole 100%.
Summarizing, both small and large implementations can be successful. Large ones need more discipline and coordination, while for smaller companies’ success might be achieved by being flexible and improvising in some stages. We think that trusting your lease administration software provider, who has completed hundreds of implementations, could be another key to success. Just as every surgeon is interested in successful surgery, each software supplier should be interested in the success of your business and project. That’s true fo at least the SOFT4 team, because the best marketing tool in our industry is still word-of-mouth. We believe that our lease administration software is definitely something that your organization should consider upgrading to!
*The time depends on other systems used, amount and complexity of the tasks needed, and other factors, that are usually discussed in the beginning stages of the project.