Getting ERP Ready: Your Pre-Implementation Checklist
Congratulations on deciding to streamline your business operations with an enterprise resource planning system—that's a great first step. Now, it's time to make sure your company is ERP ready.
Here’s what you need to know to get ready for an ERP system implementation, complete with a checklist to validate your preparedness.
What is ERP Ready?
When you are “ERP ready,” it means you are fully prepared to install and use an ERP system in your organization. More specifically, being ERP ready means you have completed an ERP readiness assessment and determined that you’re primed for system implementation.
An ERP readiness assessment prods into the current state of your business, helping you identify the changes you need to make before you implement an ERP system. A readiness assessment looks at:
- The challenges your business is facing
- Whether an ERP system will help address these challenges
- Whether your business is ready to implement an ERP system; if not, what you need to change to get ready
ERP systems are great for becoming more efficient as an organization, but you need to ensure your company has the proper human, financial, and technological capacities to accommodate this new ERP system.
As the inventor of the telephone famously said, “Before anything else, preparation is the key to success”.
Why is ERP Readiness Important?
There are several benefits of performing an ERP readiness assessment. In fact, ERP readiness should be the first step in your ERP implementation strategy if you want to get through the process without wasting time, energy, and—perhaps most importantly—money.
When you prioritize an ERP readiness assessment, you eliminate challenges that 75% of unprepared companies face, by becoming clear on the following items:
- The challenges that you expect to solve with an ERP system
- Which systems will become outdated
- Whether you have adequate technological infrastructure
- Employee roles and responsibilities
- Total cost and expected ROI
- Potential causes of resistance
Most importantly, a readiness assessment helps you determine what you need to change in order to get ERP ready before you waste precious dollars floundering on implementation.
ERP Readiness Checklist
Time for the rubber to hit the road—go through this checklist to determine if you’re ready to implement, or if it’d be best to take a beat.
Here’s what the checklist looks like at a glance:
- Current business challenges
- Implementation goals and objectives
- Organizational resources
- Team readiness
- Data migration readiness
- Whether to involve an ERP consultant
1. Understand the Current Challenges Facing Your Company
First and foremost, you need to figure out if you’re trying to solve the right problems by implementing an ERP solution. Just as sports cars (usually) don’t solve midlife crises, ERP systems aren’t magic bullets.
Some of the most common issues ERP systems can help solve include:
- Poor financial management
- Lack of adequate data for decision-making
- Too much manual work
- Poor movement of supplies within your supply chain
- Poor coordination between various departments
- Inability to scale your business operations
- Poor functionality of existing systems
- Delayed real-time reporting
- Inconsistent customer relationship management
2. Define Your Goals and Objectives
If you want your ERP implementation strategy to succeed, you need to clearly define your business goals and objectives.
If you’ve taken the time to truly understand the challenges your business could solve with an ERP system—as step 1 wanted you to do—then your part is done already.
But the thing is: This step can’t be done in isolation. All relevant decision-makers need to take part in defining the goals and objectives of your ERP system, to minimize the amount of time spent arguing and changing things around further down the line.
To simplify things, get your relevant stakeholders to complete the following questionnaire:
| Consideration | Response |
| What are the major goals and objectives you intend to accomplish with an ERP system? | |
| What are the main results to be achieved by the ERP implementation? | |
| Are all stakeholders aware of the expectations of the ERP implementation strategy? | |
| Do all stakeholders understand and agree with the goals and expected results? | |
| How long will the strategy take? |
Once everyone has completed their homework, come back together and discuss the goals. When everyone’s aligned, you can determine the type of ERP system that would be best for you, then move to the next step.
3. Consider Your Budget and Resources
Consider whether you have suitable resources to support this ERP project.
For instance, if you only have 1 or 2 members on your implementation team, they might fail to hit your deadlines due to a lack of time, requiring you to assign more members to the team.
And, of course, you need to consider the financial resources required to make this work. If you aren’t sure you have—or if you don’t have the ability to commit—enough cash to see this through, your implementation would be dead in the water.
4. Understand Your Team’s Readiness
Leadership should already be bought in by this point, so your job is to ensure all other teams and prospective operators are ready for this new technology.
This doesn’t mean you need to individually ask each employee if they’re excited to get a new system (can you imagine if that was actually my advice?).
It means you need to consider the people and processes that would be affected by implementation and how to best adapt to these changes.
For example:
- If you use independent contractors for a lot of your processes, you should consider the training documents/videos you’ll need to make to get them up to speed, as well as who will make those resources.
- If you’ll have a lot of employees acting as end users of your ERP system, consider organizing a formal training workshop to get them up to speed.
5. Prepare for Data Migration
Before installing an ERP, be prepared to migrate data from various systems to the new one.
You should assign someone from your ERP implementation team to own the data migration role and get in touch with your current systems contacts… as it can be a doozy.
In order to avoid vendor-side delays, get the responsible party to make prior arrangements and get buy-in from vendors ahead of time.
To make the data migration process successful, understand the following:
- How you will migrate the data—more complicated than it sounds, this step requires careful consideration.
- The potential risks that your business might face due to data migration, as well as how you’ll minimize the likelihood of them occurring and respond in the event that they happen.
6. Determine Need for an ERP Consultant
If you can’t spare the manpower to see implementation through the right way, seek professional assistance from an ERP consultant.
An ERP consultant is a professional with extensive knowledge of ERP systems, and they’re well-equipped to handle most of these tedious processes on your behalf.
I’m a DIY-til-I-die kind of guy, but even I’d consider getting an expert to take this over, considering how much money (and potential for headache) is on the line here.
Problems To Solve Ahead of ERP Implementation
Some things seem universal—the fear of leaving the oven on, the joy of falling in love, and the fact that companies seem to really struggle with ERP system implementation.
These are 5 of the most common problems people face when implementing ERP which, lucky for you, dear reader, are pretty much all addressed by the checklist above.
1. Selecting the Right ERP Vendor
Before you proceed to implement an ERP system, you have to choose a reliable vendor. But, since the ERP field is very competitive, most business operators struggle with selecting the right vendor.
You can solve this challenge by working with an ERP consultant and getting their take, orrrr by finding a list of the best ERP systems on the market, mapping their benefits against your goals, and talking with a software advisor.
Handy, hey?
2. Inadequate Budgeting
According to ERP Focus, the average cost of implementing an ERP system is $7200. However, like with anything else, this amount can vary depending on the size of your organization.
Most companies fail to fully implement ERP systems after starting the implementation process. The most common reason? Poor budgeting.
- Go through the readiness checklist
- Get quotes from vendors
- Ensure you’ve thought through each step in the process, and
- Set aside a buffer for unforeseen expenses
3. Poor Project Management
When implementing an ERP, you have to do the project in several phases. These phases include:
- Discovery and planning
- Design
- Development
- Data migration
- Testing
- Post-launch updates
To successfully accomplish the activities required at each phase, you need a strong and competent implementation team—hopefully, with at least one good project manager in the midst.
4. Poor Employee Engagement in the Project
A core mistake that most business owners make is failing to update and involve employees during ERP implementation.
Specifically, update relevant employees about the features and benefits of the new ERP system during the pre-implementation process, then assist them in transitioning and adapting to the new system.
5. Thinking Implementation is One-and-Done
Did you think you’d set up the system and then be set for life? As much as I wish that were the case, life isn’t quite so simple.
As with any system, you’re going to want to maintain it. When it’s a system as big as this, you’ll need someone to really own the task.
Assign a product owner for your ERP system, then help them collaborate with your project team and plan for periodic audits to fix issues and integrate new modules as your business develops.
After all, if you fail to plan… you plan to fail.
Subscribe to Elevate Your Financial Leadership Skills
Ready to compound your abilities as a finance leader? Subscribe to our free newsletter for expert advice, guides, and insights from finance leaders shaping the tech industry.