Tips To Set-up and Develop a Realistic ERP Project Plan

Imagine running a business with no management at all. No sales team to generate revenue, no accounting team to manage books, and no project management teams to manage projects. Wouldn’t it be like a disorganized local market?

An Enterprise resource planning system brings stability and consolidation to your business. It integrates your business processes, such as sales, financials, production, HR system, and inventory, to ensure higher productivity, lower costs, and increased profits.

The global ERP market is likely to reach by $97 billion by 2023, as more than 80% of organizations have already implemented ERP.

If you’re planning to adopt an ERP system for your organization, here’s an ERP system implementation project plan to follow.

What is an ERP Project Plan?

An ERP system allows you to manage day-to-day business activities, like procurement, project management, accounting, supply chain operations, and risk management & compliance.

With ERP playing such a pivotal role in the success of your business, it’s critical to have an effective process to select the right ERP for your business. This process of choosing the right ERP vendor for your business is referred to as an ERP project plan.

Importance of ERP Project Plan in Business

An ERP project plan, if implemented adequately, can provide complete visibility into your core business operations. It can help you optimize your systems and facilitate superior resource tracking and information management.

But a faulty ERP system implementation project plan can have the reverse impact. It could lead to ineffective project management, increase operational costs, and deplete organizational productivity. Therefore, it’s essential to set realistic expectations and develop an ERP project plan that aligns with your business objectives.

Pro Tips For Setting and Developing an ERP Project Plan

That said, let’s dive into the process of developing an ERP system implementation project plan.

1. Create a Project Team

First, it can be a hustle to plan an ERP project on your own. Assemble an expert, dedicated ERP implementation team to make your job much easier. An efficient ERP project team should consist of the following members:

• Project manager or leader (It could be you, or you can appoint someone else)
• Application developer (in charge of customizing the system)
• Application analyst (in charge of migrating and cleansing data)
• QA tester (responsible for testing system and performance)

Having the right team of people will make the ERP project plan process quicker and smoother. In some cases, however, you may also need to include the stakeholders.

2. Create an ERP System Implementation Project Plan

Now that you have the team ready, it’s time to get started with the plan. Here are a few steps to follow.

• Determine a budget by forecasting implementation costs
• Develop an ERP implementation schedule
• Migrate information to the new system
• Test your ERP before going live
• Train your ERP user base
• Implement the project and evaluate its success

Besides, you’ll also need to plan out ways to minimize the disruption during the implementation process. You can alleviate disruption by clearly communicating about the change in advance. This way, you can allow adequate time for user training.

3. Forecast Your Costs and Decide on a Budget

There’s no specific answer to how much does ERP implementation cost. It depends on several factors like the type of ERP, the degree of disruption, and the amount of training required.

However, most ERP implementations are over budget. Analysis indicated that 35% of ERP implementations are over budget by 0-25%, 15% implementations by 26-50%, and 6% implementations by more than 50%. This data suggests that more than half of the ERP project plans are over budget.

Apart from the apparent ERP subscription, here are a few hidden expenses that can influence your overall ERP implementation costs.

• Network/hardware upgrades (especially if you’re implementing an on-premise system)
• Vendor training/consultancy fees (if support and training is not inclusive of the initial price)
• Staff overtime pay
• Storage and data backups (mostly included with ERP subscription costs, but it’s wide to double-check)

Although your ERP costs depend on factors ranging from your company size to business requirements, a report found that companies spend $7,200 on average per user of an ERP system. Ideally, you should dedicate at least 1% of your annual gross revenue to the ERP system implementation project plan.

4. Migrate Your Data

Once you’ve planned everything and everyone is on board with the new change, you can commence the actual process of shifting your data to the new ERP. As discussed, you should have a dedicated application analyst to carry forward this process.

What follows is a typical ERP data migration process.

• Data verification and cleansing
• Database setup
• Mapping legacy data to new fields
• Data transfer to the new ERP system
• Test and verify legacy data and new data inputs

5. Train Your ERP User Base

User adoption is the key to the success of an ERP project plan. You can train your workforce in various ways, but the most common methods are ‘in-person’ and ‘e-learning.’ There’s no right or wrong way to prepare your ERP user base, and you pick a way that best suits you and your team.

Here’s what you’ll need to enhance the outcomes of your training program.

• Role-based training to keep time-poor employees on the side
• Clear communication channels with vendor support
• Technically proficient members of the team who can prepare the low-level users

6. Implement The Project and Assess The Results

The big day has finally come as your ERP system is ready to go live. After you’re done with system testing, staff scheduling, and data backup processes, enter the ‘go-live’ stage of your ERP system implementation project plan.

Once your project is live, evaluate its success based on the following metrics:

• Return on investment
• Increase in productivity levels
• Increase in client retention
• Reduction in operational costs
• Increase in overall revenue and profits

In the end, it’s important to understand that all companies are different. So, don’t follow a hard-and-fast implementation roadmap, and customize the plan as per your organization’s requirements.