In our previous blog, we looked into key indicators to assist you with making a decision on when is the right time to change your Enterprise Resource Planning (ERP) system. We know without a doubt that changing an ERP system can be a significant undertaking for any business, and it can pose several organisational challenges. Addressing these challenges requires careful planning and effective strategies. Here are a few approaches to overcoming the most common challenges organizations face when changing their ERP system:
- Resistance to change:
Clearly communicate the benefits of the new ERP system to employees and address any concerns or misconceptions. For example, you can provide concrete examples of how the system will improve employees’ daily tasks, such as reducing manual data entry or automating workflows. Involve employees in the decision-making and implementation process to gain their buy-in and make them feel valued. Offer comprehensive training programs and ongoing support to help employees adapt to the new system smoothly.
- Data migration and integration:
Assessing the existing data to identify what needs to be migrated, cleaned, or archived is a crucial step in the process. Prioritise critical data and develop a migration plan accordingly. For instance, determine upfront which customer records, product inventory data, or financial transactions should be transferred to the new system. Utilise specialised data migration tools or services, such as automated scripts or data mapping software, to facilitate the transfer of data from the old system to the new ERP, ensuring accuracy and integrity. Perform thorough testing and validation of the migrated data by cross-checking it against the original source to identify and rectify any discrepancies or errors.
- Employee training:
Create a comprehensive training plan encompassing different learning styles and provide hands-on experience with the new ERP system. Tailor the content and delivery methods to accommodate different learning preferences. Conduct interactive training sessions, workshops, and webinars to ensure employees understand the new system’s features and functionalities. For example, you can offer online tutorials, video demonstrations, or simulated scenarios to provide practical experience. Establish a support system where employees can seek assistance and clarify their doubts during and after the training period.
- System customisation:
Prioritise customisation needs based on your business’s specific requirements that cannot be met by the standard ERP solution. For instance, if you have unique reporting requirements or complex approval workflows, customisation may be necessary. Assess the feasibility and impact of customisations, considering factors such as cost, complexity, and long-term maintenance. Collaborate with the ERP vendor to explore possible customisation options that align with the system’s upgrade path and do not compromise future system upgrades.
- Vendor selection:
Clearly define your business’s ERP requirements and evaluate potential vendors based on how well they meet those needs. Request and review proposals from multiple vendors, conduct demos, review customer references, and evaluate the vendors’ track record. Additionally, assess the vendor’s implementation approach, project management capabilities, and post-implementation support to ensure it will have the desired outcome of a successful ERP implementation aligned with your business.
- Implementation timeline:
Develop a comprehensive project plan that includes milestones, tasks, and timelines to keep the implementation on track. Break down the implementation into smaller phases or modules to allow for incremental go-live and minimise disruptions to day-to-day operations. Assign a project team with clearly defined roles and responsibilities to manage the implementation process effectively. Regularly track progress and conduct milestone reviews to ensure timely completion and provide opportunities for adjustments as needed.
Evaluate the potential benefits and savings that the new ERP system will bring in terms of increased efficiency, productivity, and reduced operational costs. Look beyond the initial implementation costs and assess the long-term return on investment. Consider factors such as scalability, reduced maintenance requirements, and improved business processes. For immediate financial burden alleviation, investigate financing options like vendor financing, leasing, or phased payments.
In addition to these challenges, modern-day ERP system transitions may introduce additional complexities:
- Cloud migration: If you are transitioning from an on-premises ERP system to a cloud-based solution, you will need to plan for data migration to the cloud, ensure data security during the transfer, and adapt your infrastructure to support cloud-based operations.
- Data security: With the increasing volume and importance of data, organisations must prioritise data security during the ERP system transition. This includes implementing robust security measures, such as encryption, access controls, and data backup strategies.
- Integration with emerging technologies: Modern ERP systems often require integration with emerging technologies like AI, machine learning, or IoT. Consider the integration requirements and potential benefits of incorporating these technologies into your ERP system.
- Mobile and remote work capabilities: As more businesses embrace mobile and remote work environments, it is essential to evaluate how the new ERP system supports these requirements. Ensure that the system allows for remote access, collaboration, and mobile-friendly interfaces.
In conclusion, changing an ERP system can be a complex undertaking with several organisational challenges. However, by considering these factors and developing an effective strategy, businesses can navigate the ERP system change process with confidence and achieve the desired outcomes.
Ian heads up the SME Business Unit at G3G Africa. He is a key driver in assisting businesses to understand how to leverage technology during the entire business lifecycle. In his 15-year tenure in the ERP industry, he has experience from being an implementation consultant to business process mapping, key account management as well as operations management. Ian is an advocate of digital business transformation and believes that a solid ERP system should be the core of every SME business.