The Importance of Planning and Change Management for ERP Software Implementations
Planning and change management are crucial elements of any ERP implementation. However, too many companies skimp on these important phases, as shown by the 2016 ERP Report released earlier this year by Panorama Consulting Services. Based on more than 200 implementations, this report highlights customer and market trends in ERP software as well as lessons learned from companies that have recently completed the process.
This report is a great resource for ERP customers and resellers alike, as it provides important information about the aspects of an implementation that work and those that can be improved upon. This year, the main takeaway is that while it may be tempting to cut corners with the planning phase and change management to save on costs, they are essential to help you make the most of your system and increase your return on investment.
The main trend highlighted by the survey is the increase in the number of cloud-based ERP solutions that are being implemented. More and more organizations are electing this option in order not to have to worry about networks and databases. This is also fueled by the increase in offerings as providers have been making significant investments to meet this demand. One such example is Microsoft, which operates a cloud platform and infrastructure named Microsoft Azure, and has recently announced the evolution of its Microsoft Dynamics CRM Online towards a new cloud-based platform called Dynamics 365.
While more than half of respondents did choose an on-premise solution, showing that this type of installation is still in demand, 27% have gone for a cloud solution. Of those cloud-based implementations, 56% reported implementation cost savings of at least 20%. The main reason cited for opting for an on-premise installation was the perceived risk of security breach of a cloud solution, but as Panorama mentions, this is a misconception, since cloud providers have made great strides in enhancing their security For instance, Microsoft abides by 4 “trusted cloud principles” to ensure that data stored on Azure is secure: security, privacy & control, compliance, and transparency. By making cloud security a top priority, they can meet all necessary requirements to provide their customers with a safe cloud option.
The survey also highlighted the most common situation faced by companies implementing new ERP software: exceeding the initial budget. This demonstrates the importance of including a budget contingency of 20% in case of cost overruns. The typical causes mentioned in the survey for these overruns were an expansion of the initial project scope, unanticipated technical or organizational issues, and insufficient project staffing. Moreover, more than half of respondents mentioned that they exceeded their initial estimated timeline, with an average implementation duration of 21 months.
In both cases, this stresses the importance of the analysis phase and planning prior to the implementation to more accurately assess the duration and needs of the project. Proper analysis and planning, business process management, and organization change management help manage costs and curb extra investments due to unforeseen circumstances and budget or timeline overruns.
Having successfully carried out over 300 implementations ourselves, we know first-hand the value of planning and analysis prior to any implementation. Clients are more satisfied with the overall implementation since it removes a significant number of surprises and cost overruns. As a value-added reseller, we offer consulting services and perform an analysis of your needs and current situation to ensure that the implementation is carried out within your budget and timeframe. For more information, read our article to learn more about the importance of the analysis phase in any ERP implementation project and have a look at our infographic to know what are the key factors in a successful Microsoft Dynamics GP solution implementation.