Over the past eight years, Millpond has partnered with numerous organizations across New Zealand and Australia to replace or upgrade their ERP systems. As we prepare to embark upon another go-live with one of our clients, we wanted to share some key lessons to be learned from these rather significant and complex initiatives.
So whether you are the Project or Programme Manager, operate the PMO, have a role on the Governance group, or are acting as a SME from the Finance department, we hope this provides something to spark a few more conversations within your ERP Project.
Key Message: It will be Bigger and Bolder than you think.
The overarching theme we’ve consistently observed is this: ERP projects will be bigger, more complex, and demand more resources, time, and money than you initially anticipate. It’s crucial to approach these undertakings with a realistic mindset and proper planning.
We once advised a client, who was at the beginning of their initiation, to double whatever their budget, timelines, and resource forecasts were – as that can be the reality of ERP upgrades if early figures carry a good level of optimism. Everybody in the meeting laughed but we had to reiterate that in this instance, we weren’t joking.
Please Avoid Parallel Major Projects
Executives and Portfolio Managers – clear your schedule! One of the most significant pitfalls we’ve encountered is when organisations attempt to run multiple major projects simultaneously, or at least with significant overlap. This going to cause unnecessary headaches from the get-go with core or essential staff being split in two directions and you’ll be trying to manage the business process change from one project while fundamentally changing the organisation with another. This approach often leads to burnout among staff, a drop in productivity and, ultimately, key personnel (knowledge and IP) leaving the organisation because it is just too much. Instead, focus on one major initiative at a time to ensure best chances for success – this ensures minimum impact to your organisation and your people.
Resource Up the Business: The Importance of SMEs
Engaging Subject Matter Experts (SMEs) is essential for the success of an ERP project. However, it’s vital to ensure these experts are not overburdened. We seen some great organisations secure backfill resources before their ERP project kicks off, or in the early months, so that SMEs can fully dedicate themselves to the project without compromising their regular responsibilities. This needs to happen early as it can take ~4+ months for backfill resources to operate independently in their new role – 4 weeks of advertising, 2 weeks of interviews, 4 week notice period, 8 weeks of on-boarding and ramp-up. Trying to do this while the project is fully in flight is not only distracting and stressful, it is also slow.
Dress Rehearsals Build Clarity, and Confidence
A dress rehearsal is a full-scale simulation of the go-live process, allowing teams to identify and resolve issues before the actual deployment. It ensures that data migration, system integrations, and business processes function as expected, reducing the risk of real downtime or operational disruptions during and after the actual go-live. By simulating real-world scenarios, teams can refine their cut-over plans, validate system performance, and confirm that users are prepared for the transition.
It is fairly common for projects to hold 3+ dress rehearsals prior to a go-live. We guarantee learnings are to be had from the first few, resulting in a lot more success and a lot less stress during often lengthy go-live windows. It will also shorten the length of the ‘hyper-care’ window post-go live, more on that later…
Addressing Common Overruns and Issues
Integrations
Integrations are often complex and require really careful planning – so please consider the following:
- Toolset Familiarity: If you plan on using a new toolset to manage your integrations, research the market first – don’t just absorb the details from the glossy brochure or vendor’s sales pitch.
- Who else is using this technology in the local market?
- Has someone spoken to them to gather their real-world insights?
- Is there a good amount of (local) talent familiar with the technology? (so if you need to resource up, there are people who have the skills you need).
- Requirements and Design: Truly understand your current integrations, develop clear requirements and designs before starting the development process, and decide whether your data is to be transformed before, during, or after the integration (or all three!).
We’ve unfortunately seen a world of pain and delays with some clients when there wasn’t much in the way of existing documentation or knowledge on how their existing integrations worked before migrating onto their new integration platform. Unfortunately, a lot of assumptions were made and once developers got started, integrations were labelled as complete when they weren’t, integrations couldn’t be migrated to new environments, and the bug/issue registers grew – ultimately leading to a constant low state of confidence in the reliability of the timelines presented. If a Developer doesn’t know what they need to replicate, then how can we expect it to work first, second, or third time? - Cost Management: Be aware of potential costs and licensing complexities associated with running multiple integrations across multiple Dev, Test and Prod environments. You may end up with 6 or more environments due to having multiple entities your organisation is servicing. Costs can stack up significantly when considering both the current needs of the project(s) and the ongoing needs of the operations.
Data Migration
Data migration is a daunting task – and don’t let anyone tell you otherwise. Key questions to address include:
- What Data is Necessary?: Before starting the migration process, it’s crucial to conduct thorough analysis of your existing data landscape and identify which data sets are necessary for the new ERP system (This includes transactional data, historical records, and master data). Understanding what needs to be migrated helps streamline the process and avoid unnecessary complexity.
- Data Quality: Unfortunately, a lot of existing ERP data can be very, very messy. Some staff don’t understand the value of clean data, or just don’t enter data completely or correctly due to on-the-job time pressures. Ask yourself;
- Is the data complete?
- Are there duplicates or inconsistencies?
- What data needs to be cleaned or validated?
- How can we clean and/or validate the data?
Sometimes there is substantial effort required for cleaning, so this time needs to be allowed for during your project timelines, costs, and resourcing. Some external agencies offer a cleanings service which may be worth exploring. We’ve seen clients ask their staff to manually edit data such as updating supplier records, correcting skus, fixing colour or size codes etc etc.
Beyond the above, and looking ahead, we suggest you work with your functional consultants and vendor to advise how the new ERP system can be configured in such a way to encourage correct & accurate capture of data and limit the ability for variation going forward. - Migration Timing: Data migration should be approached in phases to mitigate risks. Break down your go-live planning to factor in what data can be migrated prior to go-live, during the go-live, and post-go live. Some business processes will need to be temporarily frozen in order to accommodate this need, sometimes for hours, days, or even weeks!
Significant data loads will take significant time to migrate, so speak with your environment manager to see if a higher tier environment is available to speed up this process. Environments are usually able to be dialed up and down, but this will come a a price – and in our experience, this price is well worth the investment.
BI Reporting
Effective BI reporting is crucial for maximizing the value of an ERP system. Here are some key learnings from us:
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Understand Reporting Needs: Clearly identify what data is essential for your business operations. Engage stakeholders to determine who consumes the reports and how often they need them. Please lock these needs/expectations down and ask your governance group to confirm this is indeed everything that matters.
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Establish Data Validation Processes: Work with your SMEs and BI team to determine how the new reports can be validated. Comparing a OLD report in an old system with one data-set to a NEW report in a new system with another data-set, isn’t going to provide a good benchmark to validate the data. You may have to ask SMEs to compare BI Report outputs to key metrics with the back-end to confirm that the report is presenting the right figures.
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Prioritize Training: Ensure that users are well-trained on the new BI tools and reporting capabilities. This will empower them to leverage the ERP system effectively for informed decision-making. Better yet, they can then generate their own reports based on their own needs, and not be reliant on the BI team to produce more than the platform itself.
Testing and Environments
We’re sorry to say, but your testing windows will be exhausted – If you set 8 weeks for a round of System Testing, it will take 12 weeks.
People will have access issues, environments will take longer to setup, data won’t always be ready or in a state your need it in, and you’ll be challenged about whether to execute your original tests or spend time retesting bug fixes.
We’d advise seeking Independent Testing Leadership – someone who has experience in designing extensive test strategies and can work with your QA staff and SMEs to streamline testing as much as possible.
Refreshing test environments is very time-consuming, especially when integrations are involved. Sometimes this can consume weeks of effort before you can execute your first test case.
Governance
Strong governance is crucial for the success of an ERP project. Questions to ponder include:
- Budget Realism: Was the initial budget realistic, or simply an agreeable figure knowing overruns would occur?
- Project Governance: Ensure proper governance structures are in place to monitor progress and make adjustments as necessary.
- Optimism Bias: Fact check the forecasts. Look at the past forecasts and actual performance – are we kidding ourselves when we carry a conscious or unconscious optimism in what we can achieve in the coming weeks?
- Go-Live Readiness: Are you going live because you are genuinely ready, or is it based on external promises?
Insights from Employee Experiences
In addition to our experiences above, it’s worth noting the findings from Andy Lawton-Thesing’s paper, “Employee Experiences Save with an ERP Implementation.” His research emphasises the critical role that effective communication and change management play in shaping employee experiences during ERP projects. Engaging employees early and consistently throughout the process can lead to smoother transitions and greater overall satisfaction.
There is a saying that we hear a bit around the houses – “People either survive ERP projects or they don’t”. It is a harsh summary of how busy and stressful projects can be. It isn’t unusual to be working with a team at the end of the project and realise that the number of people who were there at the beginning are few and far between.
So please think about the people side of Change Management;
- Gather Feedback: Regularly solicit excitement and concern from team members.
- Process Mapping: Clearly map out processes to aid understanding and adoption.
- Communication: Utilize newsletters, meetings, and Q&A sessions to keep stakeholders informed. Touch-points to gauge concern and capture questions.
- Training: Provide thorough training to ensure all users are prepared.
- Post-Go-Live Support: Allow for a substantial buffer after go-live to account for resource consumption and any unforeseen challenges.
Final Thoughts: Bringing It All Together
Embarking on an ERP project is a significant endeavor that requires careful planning, resource allocation, and strong governance. By learning from past experiences and implementing these best practices, organizations can navigate the complexities of ERP implementations more effectively, ultimately leading to successful outcomes. Remember, while the journey may be challenging, the rewards of a well-executed ERP system are invaluable.
If you’d like some leadership or support with your ERP implementation, please get in touch.
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