5 Key Components for Successful ERP Implementation
There are many reasons for a manufacturing company to install enterprise resource planning software. A reduction in equipment requirements after installation of ERP results in a higher profit margin. Repeat business and happy clients are the consequence of production schedules met and improved manufacturing performance primarily due to the addition of ERP software. The software is the mechanism for progress. The real solution lies in the implementation process. There are five key components for successful ERP implementation.
- Budget: Management should set a realistic budget for implementing the ERP program. Budget planning must include the price of the software, necessary equipment purchases, additional employees and training cost. For a company to realize an adequate return on investment, company leaders must manage the budget.
- Communication: Properly communicating vital information to employees is the most important component of a successful ERP implementation. The implementation process is doomed to fail if employees do not understand his/her role. Management should communicate business and IT strategies to appropriate personnel via meetings, e-mails and/or memos. A company implementation team consisting of management, lower level supervisors, IT personnel and a few hands-on employees is imperative for relating information. Good communication prepares employees to process change and apply proper technique.
- Implementation Commitment: Management should be continually involved with the project. Employees need to see a commitment to implementation of the ERP software by the company’s leaders before the new software is installed. This commitment to enterprise resource planning success must be a continual process by all company leadership. Negative comments or actions by key leaders may hamper implementation efforts.
- Modification: Program modifications may be necessary to best meet the needs of a specific company. How will the company maintain modifications when the vendor updates the software program? In addition to program modifications, data management, social media efforts and other company specific areas may not be met by an enterprise resource planning software system. Management should document the requirements and strategize how to meet the needs. Instruct employees on selected methods for managing areas not met by ERP software.
- Review Process: The implementation team or management should review the process after a trial period and intermittently for the first year to assure that the system is working according to plans. Maintaining good system support is a fundamental strategy to tackle problems that arise. Management should address problems quickly and maintain a good working relationship with consultants from the ERP Company.
*Photo courtesy of ERP Software Solutions by Sujeet Kumar at Flickr’s Creative Commons.