ERP System Implementation
Importing a Phased Plan, Exporting Complexity
Transitioning to updated, automated systems that support growth and infrastructure is crucial to the long-term success of an organization. As part of this transition, the value of an Enterprise Resource Planning (ERP) system cannot be underestimated. Despite some challenges due to the complexity of automating several functions at once, implementation increases both productivity and efficiency. Through the integration of various functions, including financial reporting, human resources, and sales, the organization inevitably performs at a higher level.
While the entire process may seem complex, as with most transitions, proper planning has a direct correlation to its successful conclusion. We often recommend to start not at the beginning, but at the end. In other words, what is the desired outcome? Knowing where you are going sets the tone for how you are going to get there. Examining what processes can be automated, the investment of resources (including time) needed for implementation, assignment of roles, including who can assume the project manager role, and the restraint on resources in the day-to-day demands being met simultaneously with implementation demands are just a few of the initial considerations.
Once buy-in and support of company executives are achieved, the more complex process of implementation and execution can begin. A phased plan that clearly defines the requirements, objectives, and steps is crucial for a company’s successful navigation of an ERP system implementation. Best practices mandate that the plan be divided into two primary phases: Initial Planning and Implementation.
Initial Planning Steps
- Review the current data structure and system to identify gaps. Rank the gaps in order of importance so you can determine what you need in the new system.
- Make a list of all the functions that are in the current system that are critical to the operation’s success. Make sure those functions will be in the new system.
- Gather information about the organization, the day-to-day management of financial reporting, and any limitations of the existing reporting structure.
- Prepare a list of all reporting needs to ensure the proposed structure meets the requirements.
- Provide all information to make a decision and assist the organization with compliance. This review and analysis should cover the general ledger, development, and day-to-day operations.
- Review the process necessary to retrieve the data from day-to-day operations to make certain there is minimal (or no) double entry of data.
- Determine how all historical data will be kept and maintained once the current systems contracts are terminated.
- Determine the amount of time the products will remain live during the integration process.
- Determine the extent of historical information (timeframe and detail) to bring into the new software.
- Present the structure, outputs/reports, and plans for implementation to Executive Management to receive approval prior to moving forward with implementation.
- Map all current general ledger accounts to the proposed structure, making sure each detail transaction has a location in the new set-up. This mapping is tedious and critical for the success of the new system. It should be carefully prepared and reviewed.
- Document all newly created processes for the new system, carefully reviewing each to ensure proper controls are maintained and no essential functions are excluded from the new system set-up.
- Export data from the current systems to preserve detail historical data that may be required for research after conversion.
- Export data from the current system and, using the mapping created, move it into the new system.
- Do this month-to-month, and run basic reports to review against the current system information. This review will result in some changes to the set-up. Make these changes in coordination with Executive Review and approval.
- Ensure consistent and clear communication has been provided throughout the organization, and that key stakeholders will be able to obtain the information they need to do their jobs.
- Perform extensive testing in compliance with professional standards.
- Train staff who will be working with the new system.
- Make sure data is reconciled between all systems. For example, sales agrees with the sales and customer systems, contributions in a non-profit agree with the development data, and accounts payable agrees with the subledger.
Following these phases and steps will help to ensure not only a smooth transition, but a successful process overall. Barker Associates has extensive experience with ERP system implementation plans, assisting organizations achieve increased productivity and efficiency. Use this link to my calendar to choose the best time for your free 30-minute audit consultation.