20 ERP implementation tips

An enterprise resource planning (ERP) software project can be daunting for first-timers or veterans handling a migration. Get started on the right foot with the top 20 ERP implementation tips from Linux users, consultants and vendors.

Get your return on investment and then expand. Otherwise, you'll have a never-ending and unsuccessful project.

Planning

1. Know your goals for your ERP implementation. Choose the product that promises to meet those goals and put measurement tools and processes in place to gauge your success, advises Lance Williamson, engineer, Engenio Information Technologies, Inc., Wichita, Kan. In particular, he said, set goals for performance, response time and downtime.

2. Don't do any project without a plan, particularly an ERP project which touches almost every part of your organization, said Bernard Golden, CEO, Navica Inc., a consulting firm in San Carlos, Calif. Create process with regular milestones and participation from affected organizations. And be sure to test, test, test, all the way through. "All of these things seem like 'nice-to-haves' rather than critical elements in a project, but can make the overall project much more successful," Golden explained.

3. Involve users in your ERP project planning phase, said Andy Klee, president of Klee Associates, Inc., a consulting firm in Cedaredge, Colo. "The software is not going to do you much good if you don't have employee buy-in," he added.

4. Don't do the planning and implementation alone if you don't have the in-house skills to make it happen, said Jorg Janke, president of open source ERP vendor Compiere Inc. in Portland, Ore. "Determining which options and features to use requires experience," he said. If the in-house team doesn't have that experience, Janke advises, find a local ERP expert who is trustworthy and who collaborates well with your team.

5. Be realistic in your cost projections. Double the consulting firm's estimate, Klee said. "I hardly ever hear of these projects coming in under the estimate," he explained. Also, be realistic about training costs. "Even at the largest level, companies underestimate the training costs," he said.

6. Don't keep adding to your project. In the planning and evaluation stage, people see the capabilities of products and want to use each new one they discover. "Commit to what you want to do initially," said Jon Reed, a Klee Associates consultant. "Get your return on investment and then expand. Otherwise, you'll have a never-ending and unsuccessful project."

To host or not to host?

7. If you'd prefer the hosting model for your ERP, then scrutinize your application service provider (ASP) well, says Janke. First of all, you must be able to trust this ASP with your data. "Find out if that hosting company provides cookie cutter solutions or can customize the ERP suite to fit your needs," he advises. "Many outsourcers don't know enough about ERP to customize it. Then again, if a cookie cutter solution is okay for you, then fine, use an outsourcer and you don't have to take care of your ERP."

8. Follow the money. "Hosting should take out a lot of internal costs of labour," says Frank Prestipino, vice president of Oracle's global enterprise applications strategy... "It should save you money…by spreading payments over a period of time. You should be paying less over a period of time for hosting than you would do it yourself." The hoster should provide this analysis. If you're not paying less, don't use an ASP, he said.

Evaluation

9. Choose an ERP package that is industry-standards based. "You don't want to find yourself out on a limb with customers who can't interact with your proprietary, out-of-standard implementation," says Oracle's Prestipino.

10. Look closely at maintenance costs. "You can pay a great purchase price and find that it costs a fortune to maintain," Prestipino said.

11. Evaluate your processes and decide if changing them to fit a particular ERP suite would be beneficial, Klee suggested. "Either you're looking for customization or going for out-of-the-box," he says. "With the latter, people have to change how they do things in order to conform to the package. That may work for a company that needs to make changes anyway. Often, however, it's better to choose a suite that can conform to your needs."

12. Discuss a vendor's stability with the vendor reps and outside experts. Find out if the company is losing market share, which might make it a candidate for a takeover or failure, Pestipino said.

13. "Whenever a company and its ERP package are acquired, it's not usually good news for the customer," Klee said. "Often, the vendor is buying the client base and is not that interested in the software itself. Instead, they'll try to get clients to move to their own platform." In this situation, customers may have to migrate without good business reasons.

14. Get the numbers. "Get empirical evidence of return on investment from the vendor and/or a consultant," Prestipino said. Also, simulate the ERP suite in your company and make your own calculations.

15. Get vendors to come clean about their upgrade cycles. "Once they get you as a customer, their goal is to sell you new features and upgrades," Klee said. "You want a company that upgrades and adds necessary features and doesn't lock you into an expensive upgrade cycle."

16. Find out how much customization assistance the vendor will offer, Reed said. "If you customize the ERP package to fit your business scenarios without vendor support, you can limit your support options from that vendor down the road."

17. Be efficient in contract negotiations. "Don't spend too much time analyzing details to the Nth degree," Klee said. "If vendor can answer 25 critical questions and give most of what you want, you're going to be in good shape. Focus more on critical items to get through negotiations more quickly."

18. You can't get everything you want. "Do accept that there is always going to be a functionality gap," Reed said. "Usually, you have to let 10% go. If the gap is more than 10%, keep shopping."

After the implementation

19. Pay attention to the quality of your data and the daily workflow, Golden said. This is especially important during the transition time after implementation and during periods when your business is changing or growing. Watch for seasonal variations, too. For example, Christmas can cause big jumps in data volume for a retail company.

20. Don't sign up for long training sessions. Instead, do some initial, condensed training on your own site, and then set up a regular class schedule that gives users time to learn before they move on. "Vendors want to sell customers, say, 40 days of training over six weeks," Klee said. "By the time the class is over, the trainees have forgotten the first half of the lessons."