How to Build a Winning ERP Strategy
Core Four Fundamentals of ERP Strategy: For a successful ERP strategy, you need to consider your vision and business needs, stakeholder involvement and training, integrated plans and data strategies, and your desired roadmap and timeline.
Best Time For Building a Plan: As soon as you decide to adopt an ERP solution, start planning. A good strategy is key to your implementation success, and should be done even before choosing a vendor.
Underestimation Leads to Failure: Poor integration planning, resource misallocation, and lack of training are the most common reasons for ERP failure. Address these early in your strategy to avoid mishaps.
A poorly executed ERP implementation doesn’t just waste budget; it undermines financial visibility, stalls scalability, and frustrates your teams.
As a digital software expert with years of experience guiding organizations through the maze of ERP solutions, I know how the right approach can drive efficiency and growth, and how the wrong one can set teams back months or even years.
Which is why I built this guide specifically with CFOs in mind. In it, you’ll learn how to mitigate risk, align cross-functional teams, and ensure your ERP investment delivers measurable ROI from day one. Ready to get started?
What is an ERP Strategy?
An ERP strategy outlines how your ERP system will align with business goals. It also shows how the ERP will streamline processes and lower operational costs.
Think of it as the backbone of your ERP implementation––because really, that’s what it is. Done right, an ERP strategy supports seamless workflow automation. Even more, it makes communication and collaboration between business units easier post-deployment.
Say you adopted a cloud ERP to simplify order fulfillment and payment reconciliation. A well-structured strategy will ensure a smooth ERP rollout and change management so:
- Warehouse staff get instant notifications to begin fulfilling orders once they are made. The result? Happy customers and returning buyers.
- Finance teams gain better transaction visibility and can reconcile payments in real time. This will ultimately prevent cross-team friction.
The Fundamentals of ERP Strategy
Successful ERP implementation starts with clarity and an airtight business case, not software. Ready to lay the groundwork before the digital transformation begins? Here are the four key ERP strategy fundamentals you should be aware of:
Let's take a closer look at each of these strategies and why they're important to helping you sync your goals, people, and systems.
- A Defined Vision and Clear Business Needs: A strong ERP strategy starts with a clear vision tied to clear business needs to stay focused and outcome-driven.
- An Integration Plan and Solid Data Strategy: Reviewing existing tools and ensuring seamless integration drives efficiency and long-term success. So does building a reliable data plan.
- Early Stakeholder Involvement and Training: Involving and training leaders, users, and IT specialists early builds internal expertise. It also limits resistance and drives adoption.
- A Detailed Roadmap and Deployment Timeline: A structured roadmap keeps the ERP project on track and aligned with your business strategy. It should include clear timelines, risk mitigation strategies, and major milestones.
How To Create an ERP Strategy
Now that we have covered the key components, it’s time to get into building an ERP strategy from scratch. With the right foundation (and the steps I'm about to cover), you can craft a flawless ERP strategy.
1. Assess Your Organizational Structure
Knowing your company’s current structure and day-to-day operations will help you implement your new ERP system in a way that works for all teams. So, examine each department, its key business functions, and how it makes decisions.
Ideally, you should be seeking to answer questions like:
- What tools are used within the different departments?
- Who reports to whom?
- How does information flow between teams?
- How are decisions made?
- What are the bottlenecks present in your current workflows?
- What are the KPIs of each department, and how do they connect to the business goals?
These answers are key to defining your business needs and mapping how ERP can help meet them.
Say you lead finance at a paper supply company with sales, customer service, and accounting teams. Each of these departments has different roles and work tools. Plus, they lack proper integration and operate in silos. This disjoint has now led to delayed stock updates, poor sales visibility, and redundant work.
The good news? Once you understand how each team works, creating an ERP strategy that connects them and improves business processes will be a breeze.
2. Define Business Needs
Clear reasons for ERP adoption help get stakeholder buy-in and boost ROI. Remember the bottlenecks you identified in step 1? Use them as a framework and build your ERP requirements on them.
Imagine your paper company has outdated inventory data and limited supply chain visibility. With these as a starting point, your business needs might include:
- Real-Time Inventory Visibility: A centralized dashboard that gives warehouse and sales teams instant access to current stock levels.
- Sales Pipeline Automation: Replacing manual spreadsheets with a unified, automated system for sales and marketing.
- Order Status Tracking: A feature that helps support reps monitor the status of each order, from confirmation to shipping.
Next, set a realistic timeline for testing, team training, and company-wide rollout.
In my experience, implementing an ERP solution typically takes 6 months to 2 years. But, your duration will depend on company size, and the modules and customization levels you want. Data migration needs and team preparation also impact implementation speed.
3. Review Existing Solutions
Evaluating each team's existing systems shows how they currently work and helps you define ERP requirements. Specifically, this evaluation will help you identify:
- If any teams use different tools for the same process, so you can remove those redundancies.
- Shortfalls within team workflows and opportunities to improve them.
- Problems that may arise from integrating work tools into an ERP (on-premise or cloud).
- ERP customizations to support processes, workflows, and tools you don’t plan to change.
4. Involve the Right People
Bringing the right stakeholders in early drives ERP system buy-in and reduces resistance. Consider company execs like investors and leadership. Core team members, from managers to individual contributors, are also not left out.
Take the paper company case study. When you start to build your strategy, you'll likely involve the customer service team early, since they're more involved with the product. From there, you'll contact IT to find out scope and integrations.
5. Build a Data Plan
A data plan connects your entire organization. It also aids decision-making and prevents duplicate records and redundant features. In contrast, incomplete, inaccurate, or siloed data limits information flow and undermines the ERP system’s value.
To build a clear data strategy:
- Outline how to prepare and migrate company data during ERP implementation.
- Identify the team responsible for each data set.
- Set standards to maintain data integrity.
- Uncover potential consolidation risks.
For example, during ERP rollout, you may find duplicate and inconsistent financial records in Excel and accounting apps. First, you need to fix your books by auditing, cleaning, and consolidating them for accuracy. Then, migrate them in phases to find and resolve any other issues on time.
6. Create a Roadmap
An ERP roadmap outlines timelines and stakeholders, so you can split goals into small steps and keep everyone accountable. It shows the how, when, and who of your ERP strategy.
A good ERP roadmap includes:
- A Communication Plan: Specifies when and how to share updates with stakeholders.
- Estimated Timelines: Outlines the go-live schedule with key completion dates.
- Project Team and Deliverables: Lists important tasks, reports, features, or modules, and the teams or individuals responsible for them.
- Key Dependencies: Highlights critical tasks that must happen for others to proceed.
- Project Phases and Key Milestones: Breaks the project into stages with key milestones to monitor progress.
For example, your paper supply company can map out the ERP deployment like this:
| Phases | Timeline | Deliverables | Who’s In Charge |
Planning | 1 month | Decide on ERP requirements and key stakeholders. | IT team and Leadership |
| Review your existing infrastructure | IT team and ERP project manager | ||
| 2 months | Select a vendor | IT team, ERP project manager, and Finance team | |
| Clean up company data. | IT team | ||
| Design and Development | 3 months | Set up the ERP system | IT team and ERP project manager |
| Testing | Test it and fix any issues | QA team, IT team, and ERP project manager | |
| Deployment | 4 to 6 months | Organize staff training | IT team, ERP project manager, and Communications team |
| Roll the ERP out across departments | IT team, ERP project manager, and team leads | ||
| Support | 7 to 12 months | Analyze system usage and track adoption rates (and fix them) | IT team and ERP project manager |
| Perform regular audits and collect feedback to improve the ERP | IT team, Communications team, and ERP project manager |
The Best Time to Build an ERP Strategy
The best time to build an ERP strategy is when you decide to adopt an enterprise resource planning solution. The reason for this timing? Your strategy is the key success factor for your implementation, and you must create it even before choosing an ERP vendor.
Seriously. Every part of your strategy takes you closer to team alignment and farther from costly implementation delays. And it's goal, is to ensure that the ERP works as planned.
As a quick guide, here are some indicators that show it’s time to start building an ERP strategy:
- Your organization has evolved past your current systems or tools
- You’re expanding into new markets or product lines
- Your team is spending a lot of time managing manual processes
- There are operational inefficiencies or poor data visibility across departments
Once you’re ready to create your ERP implementation strategy, use my ERP strategy checklist to help make sure you have everything you need:
Top Mistakes to Avoid With ERP Strategies
Even with the best intentions, an ERP strategy can miss the mark if you don’t pay enough attention. Avoid these common ERP strategy mistakes to foolproof your implementation.
1. Resource Misallocation
Misallocating resources can lead to delays, operational inefficiencies, and poor execution.
Imagine you budget too much for initial staff training and little to nothing for ongoing IT support. You may end up with old employees who are well-versed in the system while new team members struggle to adapt because there’s no one to walk them through.
Avoid this and other unsavory scenarios with these best practices:
- Assign resources to ERP features and modules that align most with your business requirements.
- Compare ERP alternatives thoroughly to pick the option that best matches your requirements.
- Give realistic timelines for staff training, ERP testing, and data migration.
2. Not Knowing Business Needs
ERP systems are expensive and hard to adopt or ditch, so committing to one without clearly defining your business needs is a big mistake.
First, it can lead to lower adoption and wasted resources. And second, operations will suffer if the tool meant to simplify things complicates them or lacks key features.
For example, a poor needs assessment can lead to wasting time on unnecessary features. It could also make teams drag their feet with moving from legacy systems to the new ERP.
What should you do instead?
- Identify the pain points that slow down work within departments and determine the features needed to solve them.
- Prioritize these challenges based on how they affect your business goals and ROI.
3. Poor Integration Planning
An unclear integration plan affects synergy and operational efficiency. In real life, this might show up as neglecting existing tools and data for a completely fresh start. It could also mean departments being unable to access critical information.
Prevent this by adding the following simple but critical steps to your ERP strategy creation:
- Check for possible compatibility issues of critical business tools with the ERP.
- Identify which ERP modules to add and whether they support integrations with legacy systems.
- Test the ERP implementation to make sure it syncs well, and troubleshoot for any issues.
4. Underestimating Training Timeline
Underestimating ERP training time can delay rollout if users aren't up to speed yet. And if there’s no room to extend the training timeline? Your team will likely resist the change, feeling forced to master the tool too quickly.
My point? You’ve probably spent so much time tinkering with the ERP that you now have it (mostly) figured out. But that doesn’t mean your team will instantly feel the same way. The tool is new to them, and you should give enough time for training and beta testing initiatives.
Here are my top recommendations:
- Personalize training sessions by department to encourage adoption.
- Create async learning resources like video demos and support guides that they can always revisit.
- Provide ongoing IT support to help troubleshoot issues and guide new employees.
- Combine beta testing with live training sessions to avoid overemphasizing “what to do” and ignoring “how to do it.”
5. Misinformed Business Growth Model
An ERP strategy that doesn’t account for future growth plans will discourage buy-in. It can also cause implementation failure, even if it gets approved.
For example, your business might undergo a merger or expand into new locations in a few months. In this case, building your ERP strategy only around current processes and needs will make it obsolete before it even takes off properly. It’ll then cost you more to upgrade or replace your ERP.
Do these to align your ERP strategy with business objectives and projections:
- Sync with stakeholders on your company’s future goals and forecasting so you can accommodate their requirements.
- Choose a flexible ERP system that can handle more users, many currencies, and multi-warehouse inventory. (Even if you don’t need these yet, this investment in scalability is worth it if it’s within your budget and will come in handy soon.)
A Clear ERP Strategy is Not an Option, it’s a Necessity
An ERP software enhances cross-team synergy, but your implementation plan can make or mar its success. So once you decide to get one, create a winning ERP strategy and boost ROI like the boss you are!
Remember: consider your company’s current state, involve stakeholders early, build a data plan, and of course, create a roadmap to lead the way.
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