ERP stands for Enterprise Resource Planning, and an ERP project refers to the implementation of an ERP system in an organization; a project that starts in procurement and, in a growing and thriving business, one that will likely continue to evolve over a long period of time. An ERP project is a combination of complexly interleaved elements:
- Software
- Implementation services
- Development/Modification
- Infrastructure/Hosting
- Support
- Integrations
We will address each of these in turn, but as with everything – the devil is in the detail.
Software
ERP software tends to spring to mind when ERP is mentioned. Whether you are considering Tier 1 software or Tiers 2 & 3, the first thing to consider is the functionality (and the brand). Questions you may ask yourself include:
- What does it do?
- Who else is using it?
- Who is the software author?
- Is it new or legacy?
- Is it market-centric or generic?
- What is the cost per user?
- What is the licence structure?
- Is it on a subscription or traditional licencing model?
- Is it SaaS or not? etc.
These things are all relevant but are only part of the story. Many of the mid market solutions are functionally very capable, and very similar, so selecting between them tends to come down to factors beyond the mere scope of features.
Implementation services
Enterprise software is rarely an off-the-shelf affair, it will always require configuration of the settings and parameters to provide value to the end customer. Likewise, enterprise software is not commonly delivered by the OEM/vendor.
In most cases it is delivered through a value-added reseller, or ‘partner’. This is actually the optimal method of delivery as the vendor can specialise on software development and the partner can specialise in project roll out and business analysis.
Implementation services range from consultancy to installation or project management to training – each are specialised forms of professional services and should be balanced in a well-run project. This ensures a smooth and professional delivery, expert knowledge and skills, and the partner is able to absorb much of the heavy lifting for the customer.
Development/Modification
Each business is unique. Whether you’re a casino or hospital, manufacturer or insurer your organisation will have to keep financial records and manage operational processes. However, despite core accountancy standards, each business will have its own management spin on the numbers and the way that these are analysed and treated. Similarly, with operational processes these will vary on a case by case basis. This is why few ERP projects are able to be delivered out-the-box and usually require a small degree of modification to really excel.
Infrastructure/Hosting
In the 1990s and early 2000s the decision of where to host your ERP would not have been an issue – it wouldn’t have even been a conversation. Large servers and miles of cabling ensured that an office, warehouse and factory were suitably provisioned with access to the ERP system. Rolling the clock forward, we now have Wi-Fi and high-speed internet, cloud servers and remote workers; the days of office-based ERP access are gone – so why would the ERP live on-premises if much of its use is not? Private hosting and cloud provision both offer competitive alternatives to traditional on-premises hosting and provide extensive business benefits such as guaranteed up time & RTOs, outsourced IT staff costs, upgrade management and disaster recovery redundancy options.
Support
ERP is a business-critical system, therefore the support for this must be treated with comparable priority. Furthermore, the nature of ERP is that it is complex and addresses the processes of the entire operation from finance to customer experience to manufacturing. It therefore requires a distinct set of skills both internally and externally to ensure the smooth operation and consistent delivery of support to the business.
Support is not the place to skimp on a contract and should be a primary driver in the selection of a business partner for an ERP project. This is due to the fact the relationship with your partner will continue for years after implementation. On average, an ERP system lasts in situ between 7 and 12 years.
Integrations
Much like John Donne’s poetic proclamation that “no man is an island”, we can take this as true for ERP. No ERP system is an island – it is part of a wider web of line-of-business and secondary systems. To drive process efficiency, automation and data integrity there are a set of decisions that need to be made, including which systems to integrate and how these integrations will take place. This is a driving force for the potential scope (and cost) creep of a project.
Summary
An ERP project is a complex project which requires planning, and commitment. It is a project with multiple parties involved and multiple internal and external stakeholders. It is a project which will impact on the full breadth of business operations. As such, a strong project team will be of the utmost importance; with project executives on both sides (customer and supplier), project managers in both organisations and a unified delivery team of consultants, developers and key users.
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