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What ERP implementation steps should you follow if you don’t want to end up among the organizations for which ERP adoption became a prickly chore? A proper strategy for a new system’s implementation can help you minimize the risks of ERP deployment and make it to the success cluster. The workflow we suggest is relevant for any system as, for example, SAP ERP implementation steps are generally the same as they are for Odoo, Oracle, etc. 

In this article, our Senior Business Analyst has unveiled the secrets on how to create the shortest and smoothest path to business processes visibility and management while avoiding painful mistakes on the way.

ERP Implementation Steps

ERP implementation methods: big bang, phased, and parallel approach

Identifying how to implement an ERP system step by step is the backbone of the successful adoption of the system. However, will the process be the same for a startup and for an organization that has been running on several on-premise legacy systems for 30 years?

Surprisingly, yes! The steps for effective ERP implementation are similar regardless of your organization’s scale or task complexity. What makes an ERP implementation journey specific, though, is the deployment method you follow. There are a number of approaches to choose from, including the big bang, phased rollout, and parallel. 

  • Big bang method. It’s the fastest way to implement an ERP but also the toughest one, as you need to handle employee training, going live, and dealing with bugs – all at the same time. Therefore, this approach works well for organizations seeking only 1-2 modules in their new system. 
  • Phased approach. This method is less risky than the big bang as you deploy new modules or business units one by one. It takes more time to complete all the steps of ERP implementation, but it’s easier for you to control the process and deal with issues as they appear. Such an approach is appropriate if you have a medium-sized company and expect to use a lot of modules in the new ERP. 
  • Parallel rollout. It’s the least precarious method. All the critical functions stay protected as you don’t abandon your legacy systems immediately but run the new ERP in parallel with them to protect functions that must operate continually. Parallel adoption is the most time-consuming method, so you’ll be moving slowly… but surely. 

I advocate for an approach where we, first of all, implement functions that the customer is already familiar with from their legacy systems. And then add functions and modules they haven’t used before but expect to have. 

— Volha Homza, Business Analyst, *instinctools

Want to identify the approach that works best for your organization?

Mandatory steps you should follow for smooth and efficient ERP adoption

Only 27% of organizations take advantage of digital strategy guidance when implementing an ERP. However, strategic planning is the backbone of any result-oriented software deployment. As a company that combines both ERP development and consulting services, we reviewed the steps of successful ERP implementation in detail.

1. Establish requirements

One of the most important steps of ERP implementation is the competent determination of the initial requirements, which shape what you will end up with. However, revealing business needs and limitations might be quite challenging, if not discouraging. Hence, this activity is better to be entrusted to professional business analysts, who can minimize the gap between your expectations and the project outcome. 

The most common example of a customer need is the ability to see all their business processes in one place. Dealing with disparate systems – one for accounting purposes, another for sales monitoring, a third for inventory operations, etc. – hamper this much-coveted visibility.

Processing lots of documents is another common requirement. The amount of data you need to handle on a daily basis, among other things, will determine which ERP to opt for.  

As for limitations, they can include, for instance, using only on-premise solutions and staying compliant with local regulations.

— Volha Homza, Business Analyst, *instinctools

Customer requirements also commonly refer to the configuration and customization of the out-of-the-box solution. With this in mind, it’s critical to stipulate your expectations for the new ERP features, connectivity, and performance, as this also influences the choice of one system over another.

2. Assemble a team to work on the ERP implementation project

Do not underestimate the importance of building a strong and well-coordinated team. Who will you need by your side to take all the steps in the ERP implementation life cycle? As for any software development project, you are likely to require certain core team members, such as a project manager, business analyst, UX/UI designer, developers, and QA. 

There are also preferable experts whose participation in the project will help make it even more secure and robust. As an ERP is one of the mission-critical systems for any business, its downtime can nullify most of the benefits you’ve gained from its implementation. Therefore, you can strengthen your core team with DevOps engineers who will take care of the agility and stability of the system. When code deployments happen regularly, you can spot and remediate defects early in the SDLC and have the ability to implement business changes faster.

Another preferable member of the project team is a regulatory consultant. This person guarantees that your ERP system complies with the legal requirements of the country where your organization is located.

ERP compliance can also be handled by a business analyst. We always take into account not only clients’ requirements and restrictions but also the laws of the country where they run their business.

— Volha Homza, Business Analyst, *instinctools

In addition to this, ensure C-level engagement to communicate the importance of the new system adoption to rank-and-file employees, weakening their resistance to change and ensuring a successful rollout. 

3. Identify the ERP that fits in with your business needs and constraints

The next ERP software implementation step is analyzing available solutions and determining which one covers your needs as it is or can be customized to meet your demands. You should decide on the number of users, their roles in the system, and your document flow to understand the volume of operations per day and select an ERP with appropriate performance.

Up to this point, you’ve already thought over your limitations and know which ERP won’t work for you. For example, if data privacy requirements dictate the need for on-premise software, the question about cloud or on-premise ERP doesn’t even arise. 

A similar example refers to the level of customization that different systems allow. If your business processes don’t fit into the standard ones, you’ll need an ERP that is flexible in terms of customization. No one wants to follow in Lidl’s footsteps, an organization that spent seven years customizing SAP to its specific pricing. Still, the project failed in the end, and the company wasted €500 million

Besides the limitations, the choice of ERP is determined by what a customer needs. In our practice, there was an organization that had several legal entities. And it was imperative to find an ERP that would allow customers to see all their companies in one system and switch seamlessly between them without having to re-login. We compared several ERPs and suggested Odoo as it has a multi-company feature that allows the implementation of the functionality the customer requested.  

— Volha Homza, Business Analyst, *instinctools

There are a bunch of ERP players in the market, from giants with almost 50 years of history, such as SAP, to innovative newcomers, such as Odoo or Salesforce. We’ve already discussed the differences between Odoo and SAP ERP in detail with our business analyst and ERP team lead developer. And we definitely think it’s worth a read

Want to compare other ERPs? Don’t waste your time puzzling over a plethora of systems

4. Configure or customize your ERP system

Only 3.6% of businesses can be totally satisfied with a ready-made solution. The other 96.4% require customization or, at least, system configuration to fit their processes. 

ERP implementation

We first configure an out-of-the-box ERP to adjust to the customer’s needs and requirements as much as possible. And if it’s not enough and the required functionality is not available in a ready-made solution, we offer customization.

For example, you need a report on stock balances on a certain date. Or, in addition to the default columns, such as contacts and sales, you want the one with an invoice status. These are the things that require customization.

— Volha Homza, Business Analyst, *instinctools

During this step of ERP implementation, you should also take care of integrations with the services you’ll need. These may include payment and delivery services, such as PayPal and DHL, and Business Intelligence services, such as Power BI and Tableau.

We also integrate ERP with any systems you have. For instance, you use an accounting system where tax reports, debit and credit are generated, etc. Or you already run a CRM with set-up sales funnels that fully cover your needs. Then it makes more sense to integrate with these systems than to replace them with a new one that should be adjusted from scratch.

— Volha Homza, Business Analyst, *instinctools

5. Migrate your data

Oracle states that data migration can take up 10 to 25% of the entire project cost, making it the most critical step in ERP implementation.

Migrating all the historical data isn’t an option. In the days of big data, organizations are drowning in a sea of unorganized, unstructured, and incomplete data. Therefore, taking care of data quality should be your main priority at this stage. Determine meaningful data and check it for duplicates and errors before starting the migration. 

During one of our projects, data migration was so extensive that we had to allocate a dedicated team to deal with it. After the data had been updated, we mapped it – matched entities from the old systems to the corresponding entities in the new ERP. 

For example, in the old system, the entity is called “client” and has a specific value in the code. But in the new system, it’s called “contact” and has a different value in the code. Therefore, our purpose is to describe accurately how to match them up. It’s always the manual part of the task, but data migration itself can be automated. 

— Volha Homza, Business Analyst, *instinctools

After cleaning and mapping the data, you need to test the system before the release. For instance, you should check whether its performance will change when dealing with the real volume of data. 

The amount of real data in the production might be way bigger than the test data on the test bench. Therefore, the output data (e.g., reports) or simple database queries may run slower in a real-life environment than on the test server. We take this aspect into account while checking the load on the system.

— Volha Homza, Business Analyst, *instinctools

Need an expert ally to handle data migration and data mapping?

6. Run tests

Performance testing is a mandatory step in implementing any software. Unless you want to uncover severe defects after the release and pay six or seven times more for handling them. 

ERP implementation

The earlier you discover issues in SDLC, the lower the cost of fixing them. Therefore, here are the Top 3 performance tests you should run to ensure building a robust ERP system.

  • Regression testing. When you work at the code level and make changes to it, it’s critical to check that they haven’t affected the existing features in a negative way. 
  • Sanity testing. This type aims to verify the system’s rationality. There’s no point in moving forward to other tests if, technically speaking, the system states that 2+2=5.
  • Smoke testing. It’s conducted to check if the software is stable and helps detect major severity defects and showstoppers. 

All types of tests can be automated to simplify and speed up the task. 

7. Train your end users

According to a McKinsey survey, 70% of software implementation projects fail because of employee resistance to accepting new systems. Such a discouraging situation could be avoided by providing staff with proper training. This is why training for different user groups can’t be ignored in your ERP implementation roadmap. It can be held in two formats, and we suggest both to minimize the employees’ resistance to change.

  • Providing end users with user guides. Your ERP implementation partner prepares detailed user manuals for employees from different departments. Business analysts spell out step by step what, how, where, and when to do. With this approach, end users will feel comfortable working in the new system from day one of its rollouts.
  • Conducting in-person or e-learning training. Embracing new technology is always stressful for employees who stick to the ‘it’s-always-been-like-that’ approach. In the case of strong resistance to switching to the new system, executive involvement is key to a paradigm shift in the staff’s thinking. Especially if ERP implementation is one of your technology-enabled business transformation stages. 

The main goal of the training is to provide 100% knowledge of how to use the new system and turn employees from opponents to supporters of the present-day software.

Why should this ERP project implementation step be done before going live with the new system? 

If the training is held after the implementation, there’s a high risk that a wave of dissatisfied employees who don’t understand how to work in the new system will sweep over you. Training staff when you have to solve urgent post-release is a task I wouldn’t wish anyone to handle. 

— Volha Homza, Business Analyst, *instinctools

8. Plan and initiate go-live activities

At this step of ERP implementation, the entire team is keeping a close eye on the system’s performance, resolving bugs, and fine-tuning.

The date of the system’s deployment is always approved by the customer, as ERP rollout implies a new period for the accounting department. It’s impossible to start everything from scratch on January 1. For reliability, our customers run their new and old systems in parallel for the first month or two.

— Volha Homza, Business Analyst, *instinctools

We also suggest doing a post-live follow-up to ensure full end-user adoption of the new system. 

9. Evaluate the success according to your established requirements

It’s time to go back to the goals you set at the beginning of the project and review whether you achieved them. If you wanted to increase sales and the new ERP system was supposed to handle more sales per day, can it actually do that?

A real-life example: one of our customers set a goal to reduce request processing time from 20 minutes to at least 15. Therefore, the conformance of the new system to this KPI was one of the criteria for evaluating the project’s success. We built a system that managed to do a report in 5 minutes, which was an evident success. Going beyond expectations – that’s what drives us to move forward.

— Volha Homza, Business Analyst, *instinctools

Following a smart implementation strategy makes your ERP worth every dollar

Implementing ERP is one of the investments you should make to keep your data clean and organized in one place and simplify your growth. However, how do you reach this goal without emptying your pockets? In 2022, 41.4% of ERP implementation projects have exceeded their budgets. The key problems with budget overruns were related to organizational, data, and technical issues. Ambition requires careful strategic planning. Organizations are often so jazzed up about the agility of their future ERP and the benefits they’ll reap thanks to it that they overlook following all the steps involved in ERP implementation properly. As an experienced enterprise software development and consulting partner, *instinctools can navigate your organization all the way through ERP deployment, saving you tons of time and money and helping to avoid unfortunate mistakes.

Want to ramp up your business with an efficient ERP solution?

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Anna Vasilevskaya
Anna Vasilevskaya Account Executive

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