If you are thinking about implementing ERP or switching to a new ERP system, you may be wondering, what are the different ERP implementation strategies? Which is best for my company?
Unfortunately, there is not one answer, each company has different goals in mind, requirements, time frames, etc.
The two most popular ERP implementation strategies are “the big bang” ERP implementation strategy and the “phased- roll out” ERP implementation strategy. Below are some of the pros and cons of each method to help you as you make your decision.
The Big Bang: this is like ripping off the band-aid; it may hurt, but only for second! ERP implementation happens in one big action. All users move to the new system on a given date.
· No one has to operate their business in two different computer systems
· Everyone in the company moves forward on the same day.
· Cuts out the ability for people to say, “oh we’ll fix that issue until we convert fully”
· Shorter implementation time
· Pain and frustrations are condensed into one time period, not drawn out
· Lower costs
· Training needed only on the new system, not a changeover
· High risk
· A number of things can go wrong
· More pronounced problems
· Small details or issues can be overlooked in the rush
· Sink or swim for employees when it comes to learning the new system
· Testing can be tough prior to the implementation
· Failures in one part of the system can cause problems and failures in others
· Fall back plans do not always work out
· Performance can temporarily decline after the initial implementation as a result of employees adjusting to the new system
Side note: Pre ERP implementation steps must be taken to ensure success and always have a fall back plan, but that’s a different blog
Phased Rollout: In this method, small changes are made over an extended period of time; there is a predetermined plan of steps which help transition from old to new. There are different ways to do this such as by module, by business unit, or by geography (if you have multiple locations for your company) etc.
· Less risk
· Employees learn as they go, there is no dip in performance after
· More time for users to adapt to the new system
· Not a sink or swim environment
· Small details and issues can be fixed as you go
· Skills and experience are gained with each step/phase which can help smooth the process as you get further along
· Takes longer to be fully converted
· Not as focused as the big bang
· A state of continuous change can sometimes be disruptive
· Can have missing information because each module relies on info from others, so in a transitional period there may be some gaps
· Temporary bridges need to be made from old to new
But wait, there’s more!
Let’s not forget about another option for ERP implementation, parallel adoption. This is less popular but it may be the answer you are looking for. in this method, the old system and new system run at the same time, users learn the new system while still working on the old and when requirements for the new system is met, the switch is made. There are other pros and cons for parallel adoption, but here are the big ones:
· Least risky
· Users learn the new system while working on the old
· Slower pace than the big bang but faster than a phased roll-out
· Most expensive
· Employees have to enter data in both systems- this can be inefficient and breed data-entry problems
So what now? How do you choose?
Many companies don’t choose, they use a combination of the above ERP implementation strategies; this is another viable method. It is important to choose the strategy that will provide a low cost, low risk situation, but as I mentioned before, this is different for each company. Conditions such as number of plants/offices, number of support employees, number of divisions, if you are international, complexity of your requirements, etc. all play a role in which strategy will be best for you.