Companies that run on outdated ERP software applications or excel spreadsheets find themselves at a competitive disadvantage due to technological inefficiencies. Because many of today’s ERP vendors deliver their applications on-premise, the daunting responsibility of keeping the software updated ends up on the shoulders of the customer. Few companies are equipped with the resources, or want to allocate the resources they do have, to managing legacy ERP updates on their own. This is where the cloud comes in – in addition to benefits realized around total cost of ownership, cloud ERP also comes with hassle-free upgrades, guaranteed uptime, and simple configurability.
While a cloud ERP solution has clear business benefits, the idea of transitioning software of any kind can be overwhelming – but it doesn’t have to be. Once you decide to purchase a cloud ERP solution, there are important things to do before, during, and after the actual software installation that will ensure a successful, smooth implementation. Here’s a transition checklist to help your company get the most out of your new ERP solution.
Transition Planning
1. Secure Executive Sponsorship
As with any major project, it’s important to ensure that your CEO and CFO agree that an ERP investment will bring value to your organization and are able to tangibly see the return on their ERP investment. Examples of value include uncovering new revenue opportunities, elimination of spreadsheets and duplicative effort, improved visibility across the organization, and better compliance
2. Streamline Current Business Processes
In preparation for a new ERP application, take time to evaluate your existing business processes to ensure that you implement best practices with the new system. Some companies build inefficient processes around the inflexibilities of their legacy software systems – and a new ERP system is the perfect opportunity to streamline. An example of this is numbering your GL Chart of Accounts with dashes (4000-1) or dots (4000.1) to signify location. Those dashes or dots limit the flexibility for reporting and should be eliminated in the new implementation in favor of a location field.
3. Cleanse Existing Data
There’s no need to import unnecessary or duplicative information into your new ERP instance. Many companies take time to scrub their existing data before loading it into a new ERP application. Examples include deleting duplicative leads or eliminating GL Chart of Account entries that are no longer used. Data cleansing can also occur on the customer and vendor records.
4. Customize to your Needs
In certain cases, your ERP vendor may need to customize the product or change the code to fix a problem or add depth to functionality. Make sure to discuss the timeline for any customizations with your vendor up-front, since many vendors will need a dedicated development resource to make customizations that stray from product roadmap.
Software Installation
5. Configure the New System
The configuration phase of the implementation is the actual building of a software system to meet your specific business needs. This may include activities to make the order to cash, purchase to pay, and inventory workflows match your business processes. The configuration phase should take no longer than two weeks.
6. Import Master Data
There are two types of data you can import into your ERP system: master data and transactional data. Master data is static and does not change often – for example, customer names, addresses, GL account codes, etc. Transactional data is data that moves – for example, purchase orders that transform into receiving reports that then transform into payables. Best practices include uploading master data but entering beginning balances for transactional data like bank account balances, inventory balances etc.
7. Integrate Third Party Vendors
Most ERP platforms offer integrations to third party applications your business may use, like barcode scanners, point-of-sale systems, and ecommerce sites. Since building out an integration may take time, make sure to notify your third party vendors of your ERP platform change well in advance of go-live to avoid an interruption in integration.
8. Custom Views and Reporting
Custom views and reporting give you flexibility in the way you access your data once your ERP is in use. Views are the ability to search for data while reporting is presented in a certain format. When building views, you should think about how different stakeholders in your company search for information, like when a customer calls seeking a copy of an invoice, or a vendor asks for a duplicate purchase order. Canned reports should include financial statements, like the income statement and balance sheet, as well as aging reports and vendor payable reports.
Post-Install Optimization
9. Train your Team
Most ERP vendors include training as a component of their software implementation. When educating your team on the new software platform, to maximize effectiveness, you should engage in a “train-the-trainer” approach. A highly regarded team member would be responsible for learning the application and teaching end users.
10. Leverage Support Services
Some vendors do not provide post-sale support, or charge additional fees for post go-live support – which can leave you in a tough place when show-stopping issues arise. Make sure to ask about on-going support and account management options once your company goes live on the new system.
