ERP implementations often consume more time and money than expected. The average total implementation time for the largest third of businesses should be targeted for completion in nine months to two years. Small to medium business implementations should be targeted for completion within three 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 business 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 there is still a risk to go over budget and take longer than expected.
Not effectively managing the organizational changes that ERP 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 here.
The existence multiple business units
Business facilities at distant geographical locations take 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 our white paper here
The amount of customization 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. ERC has the skills to contain this risk.
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. ERC will make sure that this step is done proplerly.
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 experienced the vendor’s personnel and your 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. Your ERC project management consultant has over 30 years of experience with businesses of all types, and the software that they employ.
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 a project management consultant to address the change management aspects.
ERC will insure a smooth transition by working with your 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.
ERC will assess all of the above and 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.