5 Common ERP Implementation Methodologies – Find Your Fit
Integrating a new enterprise resource planning (ERP) system can be a long and complex process. By following the structured approach of an ERP implementation methodology, you can avoid delays, budget overruns, and scope creep.
Here are the 5 most common implementation processes, and which one you should choose, based on your available resources, timeline, and risk tolerance.
1. Big Bang Methodology
The big bang approach—one of the most popular implementation methodologies—involves implementing all ERP modules across the entire organization simultaneously in a single "go-live" event. The old systems are turned off and the new ERP system becomes fully operational at once.
This is the fastest, but riskiest, method. The entire company moves to the new system on a predetermined date after months of preparation—including data migration, process mapping, system configuration, testing, and training.
While it provides immediate benefits and avoids the costs of running two systems, the big bang approach is very disruptive. Any issues can impact the whole business, so users must adapt quickly to the new system.
Why It Works
This approach offers the fastest way to implement an ERP system end-to-end. Temporarily integrating legacy systems can come with its own costs and complexities, but the big bang methodology helps you go live quickly, with immediate ROI.
Who's Responsible
Given the intensive effort required from the ERP vendor under this approach, the big bang methodology can be seen as vendor-led. However, client teams also need to be involved throughout the process for gathering, design, testing, and training.
Pros
- Shortest implementation timeline
- Lower overall implementation costs
- No need for temporary integrations or processes
Cons
- Highest risk approach, issues can disrupt the entire business
- Immense change for end users to absorb all at once
- Challenging to thoroughly test prior to go-live date
2. Phased Rollout Methodology
The second most popular approach, the phased rollout implementation methodology, breaks ERP implementation down into a series of phases. Each phase focuses on deploying only a part of the functionality, modules, business units, and locations.
This approach reduces risk by:
- Incrementally introducing the new system
- Only impacting some of your business processes and workflows at a time
- Allowing issues to be identified and resolved before furthering the project
- Letting your employees adapt more gradually
- Informing later implementation phases with lessons learned from earlier ones
However, phased rollouts take longer overall, cost more, and require temporary integrations and processes between old and new systems during the transition. You also need extensive planning to manage cross-module dependencies.
Why It Works
The best thing about a phased rollout is that it allows the entire organization more time to adapt to the new ERP system. Adjustments can be made based on lessons learned between phases, making the transition process even smoother.
Who's Responsible
A phased rollout involves plenty of effort from both the vendor and the client's core project team, and is typically best suited to organizations that have engaged an implementation partner or ERP architect. This shared responsibility, along with the longer timeline, leads to a more collaborative partnership between stakeholders.
Pros
- Lower risk of business disruption than big bang
- Ability to realize benefits incrementally
- More time for users to adapt to the new system
Cons
- Longer overall timeline than big bang
- Higher total cost due to extended effort
- Requires temporary integrations between old and new systems
3. Parallel Adoption Methodology
With the parallel adoption ERP methodology, both legacy and new systems run simultaneously for a period of time. Users learn the new ERP system while still working in the old one until the transition is complete.
Parallel adoption provides a safety net, allowing the organization to fall back to the legacy system if the new one doesn’t meet business requirements. Users can train themselves at their own pace. This significantly reduces risk, but is the most expensive approach.
Running two types of ERP systems concurrently strains resources, plus it can lead to data inconsistencies. The timeline falls somewhere between the big bang and phased approaches.
Why It Works
A parallel adoption approach negates any potential risk to business continuity, providing a safety net and allowing users to learn at their own pace. Your organization can always fall back to the old ERP system if the new one doesn’t work out as planned.
Who's Responsible
During a parallel adoption, the client must manage the added complexity of running both systems simultaneously. A vendor plays more of a support role under this approach, with the client taking the lead.
Pros
- Least risky transition approach
- Users can learn gradually with fallback option
- Smoother pace than big bang but faster than phased
Cons
- Most expensive approach
- Users can refuse to learn the new system while the old is accessible
- Can lead to data inconsistencies between the environments
4. Pilot Implementation Methodology
A pilot implementation involves deploying the ERP system to a small group of early adopters to validate first, such as a single department or location. After the pilot initiative proves successful, the system is rolled out to the rest of the organization.
This approach allows the ERP to be tested in a controlled environment to identify issues before expanding. The pilot group helps shape the solution and can become ERP champions for the broader rollout.
However, the pilot extends timelines and limits initial benefits to the pilot group. Moreover, some scalability issues may come up, and process changes could be needed after the pilot. Similar to the parallel adoption approach, this is a balanced take on the implementation process but with less room for additional expenses and data inconsistencies.
Why It Works
A pilot implementation limits the scope of the rollout so that your company can detect issues early before expanding to the entire organization. It’s great for building credibility and employee buy-in for the new ERP software.
Who's Responsible
In a pilot implementation, ERP vendors provide focused support throughout the initial rollout. But the client project team and pilot users collaborate closely to incorporate learnings into the broader rollout.
Pros
- Reduces risk by limiting initial rollout scope
- Pilot group can serve as ERP champions
- Enables course-correction before expanding rollout
Cons
- Extends timeline and cost compared to big bang
- Limits initial benefits and ROI to the pilot group
- Requires process and integration changes after pilot
5. Hybrid Implementation Methodology
A hybrid approach combines elements of both the big bang and phased rollout methodologies. For example, a few core modules of the new system may be implemented using a big bang approach, while others are phased out more slowly.
The hybrid model leverages the benefits of both approaches, enabling a faster implementation of critical components with the flexibility to phase in others over time. This approach balances speed, risk, and resource consumption.
However, hybrid implementations are more complex to plan and execute. Careful coordination is required between the big bang and phased elements. Plus, the big bang portions still carry the usual amount of risk.
Why It Works
A hybrid approach balances speed and risk to create a tailored ERP implementation plan for your business. It enables teams to reap the ROI from the core modules early, while delaying the rollout of non-critical modules as needed.
Who's Responsible
A hybrid ERP implementation project can vary between vendor-led, client-led, or a joint venture depending on how responsibilities are divided between the big bang and phased elements.
Pros
- Blends benefits of big bang and phased approaches
- Can achieve faster ROI on core modules
- Flexibility to phase in less critical components
Cons
- More complex to plan and execute than a single approach
- Still carries risks of big bang for deployed modules
- Extends timeline—and budget—compared to a full big bang rollout
Choosing Your Ideal Methodology
ERP system implementation is a complex and expensive process that can take anywhere between 6 and 18 months to fully execute.
Unfortunately, there is no "perfect process" for all businesses. While there are a handful of implementation best practices that anyone can follow, choosing a methodology isn't one of them.
Using a Consultant
Given the impact that an ERP solution can have on your business operations—from data management to reporting to business automation—diving head first into implementation without proper support could trap you in like a bad marriage.
ERP consultants are like the wedding planners of the business world. They can help you drive the implementation plan from selection to integration, overseeing the process and training end business users.
If you’re unsure about the right ERP implementation methodology for your organization, consider working with a consultant to minimize your downstream risks.
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