Three ERP Implementation Methodologies to Consider
Did you know that half of all ERP implementations fail on the first try? Failed implementation can lead to squandered software budgets and harm business profitability.
Choosing an implementation strategy that works with your current IT infrastructure is critical with such heavy investment. Identifying the appropriate ERP implementation methodology will help you avoid unrealistic expectations, reduce implementation errors, and stay within budget.
We’ve looked at the three main ERP implementation strategies in this blog and provided a tool to help you decide which is best for your company.
Key ERP Implementation Methodologies
The Big Bang Approach
The big bang approach involves deploying ERP software across the entire organization. It will deploy the system across all business functions on the go-live date—manufacturing, operations, sales, finance, marketing, etc.
The big bang approach requires planning because software is typically implemented on a set date. Furthermore, there is a lot of pressure to get things done correctly because any mistake could harm the entire business.
- It takes less time to deploy because all changes are made simultaneously.
- The overall deployment cost is low.
- There is only a one-time training requirement.
- Since changes are permanent, the implementation team is under a lot of pressure to get things right the first time.
- As changes are implemented across business functions, deployment risk is high.
- Planning the implementation will take more time.
The Phased Approach
In this approach, the ERP system is implemented in stages, with each phase focusing on one or more business processes. These phases can be organized by the business department, location, manufacturing facility, and other factors.
The phased approach takes longer to implement than the extensive bang method, but it offers a higher level of security because any errors will not affect all business operations. It also relieves the implementation team of stress by reducing the number of things to worry about during each phase.
- Reduce the likelihood of failure during implementation.
- You can correct errors more quickly.
- Experience gained in one phase can aid implementation in later stages.
- A more extended period of implementation.
- Errors in data synchronization between the new ERP system and legacy systems.
- Because changes are made more frequently, it can be taxing for end users.
The Parallel Approach
A new ERP system is implemented in parallel with legacy systems in the parallel approach. This reduces implementation risks by allowing you to fall back on legacy systems if the new system fails.
Running two systems at the same time, on the other hand, introduces technical challenges such as data synchronization issues. In addition, because you’ll be relying on implementation and IT experts throughout the process, it raises the cost of implementation.
- Because implementation risk is low, it’s ideal for critical processes.
- The phased approach is slower than the big bang, but it is faster than the phased approach.
- End users can learn new features while using the old system for daily tasks.
- Running both systems in parallel has several technical challenges.
- It is costly to implement.
- Since you have to record data in both the old and new systems, data entry problems are expected.
The next step is to choose an ERP tool once you’ve decided on an implementation strategy. Each implementation type has its own set of training requirements, so you’ll need to decide ahead of time if you’ll be able to handle the workload.