ERP implementations usually consume more time and money than expected. The average total implementation time is 18.4 months. Tier I implementations should be targeted for completion in nine months to two years. Tier II or Tier III implementation should be targeted for completion within six to nine months. Those timeframes reflect the point when people within the business usually start to lose enthusiasm and energy. At the beginning of the project, everyone is focused and there is a real groundswell of energy that the project manager needs to harness.
There are many “critical success factors” which dictate how long a particular implementation will take. I’ve broken down some of the more important ones into three areas: the business, the software, and the people. As you read through them, you’ll be able to evaluate them in relation to your business. The estimation of each will move the implementation timeframe to one side of the implementation range or the other.
Is the company a manufacturer or a wholesale distributor
Manufacturing businesses are usually more time consuming to implement. Implementations for “process manufacturing” companies like food and pharmaceutical manufacturers are typically more time consuming than “discrete manufacturing” companies like toy or medical equipment manufacturers. Implementations for wholesale distributors are generally quicker, although they too have much to work through.
Companies still have unrealistic expectations
Software in the cloud, i.e. Software-as-a-Service (SaaS), implementation accelerators, pre-configured software, and out-of-the-box implementations may be hyped by software vendors as a panacea for an easy implementation, and they will speed things up somewhat, but businesses are still more likely to go over budget and take longer than expected.
Companies do not effectively manage the organizational changes that ERP system was purchased to create
Most implementing organizations are grappling with significant organizational changes in parallel with ERP initiatives, but have a poor ability to manage this change.
The “Tier” a business is in
This factor concerns the size of the company in question. Businesses considering ERP are almost always in the Tier 1 to Tier 3 range. For a more complete discussion of Tiers, please review the white paper at http://www.enterpriseresourceconsulting.com/ERC_-_What_Tier_are_you_in.pdf
Are there multiple business units
Business facilities at distant geographical locations take a great deal more time to implement compared to an organization of similar size which is limited to one particular region.
The complexity of the software
Some systems, especially Tier I systems, are notoriously complex. There are many examples of manufacturers forced to abandon implementations before they have been completed. The number of modules required also can increase implementation time. If modules like EDI, CRM, service billing, and the like are involved, extra time needs to be allocated.
Software-as-a-Service (SaaS) versus on-premises ERP implementation
Cloud software, which many traditional ERP vendors now offer, is less expensive and time consuming to implement but, on average, delivers fewer business benefits.
For a more complete discussion of SaaS, please review the white paper at http://www.enterpriseresourceconsulting.com/ERC_-_Software_As_A_Service_for_Enterprise_Resource_Planning.pdf
How much customization is involved
Users always seem to ask for changes to be made so that the new system more closely resembles the old system they’re used to. Upper management often thinks this is easy to contain, but great care must be exercised to resist all but the most necessary changes. This should be encompassed within the change management planning, which is necessary for successful implementations.
How detailed the system selection process was
If the selection process was not sufficiently detailed, many unanticipated requirements will surface soon after the implementation has begun. A well-considered, well thought out gap analysis will reveal any business needs that will require custom programming. This is a vital step for all concerned.
Number of users
An implementation for a business with 20 users will consume much less time than one with more than a hundred. Not only will the required training will be much greater, but there will a much greater need for change management.
How experienced and efficient the implementation team members are
The availability of an experienced “superuser” in each department is vital to a smooth-running implementation. If too many users are relatively new to the company, the training requirements will also include the need for instruction on how the business works. If you see many desks covered in paper and post-it notes, the implementation will take longer.
How local the vendor and project management consultant are
There will be many times during implementation when a quick trip to the company site by the vendor or consultant will be required to remove a roadblock. If flights and hotels need to be arranged, or if the attempt is made to do it over the phone, it will slow things down.
How experienced the vendor’s personnel and project management consultant are
The ERP vendor’s people that a business deals with before the sale is made are generally the most experienced and reassuring that the vendor has to offer. Others may perform the actual implementation. This situation needs to be assessed, and the implementation timeline must include this factor.
How well the change management within the business is handled and whether or not the company engages an outside project management consultant
Successful ERP implementation projects are less about technology and more about people and processes. The “human factor” is an often overlooked, but critical part of any successful technology initiative. The vendor’s staff will be working more on the technology side of the equation. You will also require an outside consultant to address the change management aspects.
The consultant will insure a smooth transition by working work hands-on with staff to ensure not only familiarity with the software, but with any changed roles, responsibilities, or processes as well. They will also identify obstacles and apply solutions.
Assessing all of the above will not only help determine the overall timeframe an implementation will consume, but will also reveal the accuracy of the vendor’s implementation cost estimate.
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