Creating an ERP Implementation Project Plan
Alex Chan | Content Strategist | July 8, 2024
Oftentimes, the biggest undertakings yield the highest rewards. Implementing a new enterprise resource planning (ERP) system is one of those potential high-reward undertakings. Today, shifting to a new ERP often means moving from long-running on-premises software to a cloud-based system. ERP sits at the heart of a company’s finance and operations, so successfully making this shift to a new ERP requires focused preparation and attention to detail. Throughout every part of the process—whether it’s assembling a team to launch the system or anticipating hidden costs—having an ERP implementation project plan is an essential part of starting this major software initiative.
What Is an ERP Implementation Project Plan?
An ERP implementation project plan involves planning, configuring, and deploying your ERP system to support all the operations that depend on it across your business. ERP implementation is a process that includes bringing together a project team, mapping your processes, migrating financial and transactional data, integrating with third-party systems, and training employees on how to use the software.
ERP systems are integrated platforms that run either in an on-premises data center or in the cloud, with cloud by far the fastest-growing approach. Cloud-based applications can involve a much different implementation effort—typically shorter and simpler than traditional on-premises ERPs. That’s because most on-premises projects involve business and operating units providing their requirements to IT teams who heavily customize the software to fit the existing business processes. On the other hand, cloud application implementations tend to be driven by business leaders and the outcomes that they need, using out-of-the-box processes without extensive customizations.
The best way to start an ERP project is to establish the business goals you wish to achieve with your new ERP and a timeline for implementation of the system. This will involve planning out steps and specific dates for the tasks you want to complete leading up to your go-live date. To determine these steps and tasks, you must first ask what particular processes you want to improve, what features you need, what system will address those needs, and what implementation strategy will work best for your project.
Key Takeaways:
- An ERP implementation project plan is an in-depth guide you build to launch an ERP system across your business, including the goals, timeline, steps, and resources you need to be successful.
- Communication and change management are critical elements of an ERP implementation plan to set expectations and align goals with business leaders and prepare the workforce for the changes coming with a new ERP system.
- ERP implementation is a months-long process that includes installing software, migrating data, revamping business processes, and training your workforce to learn new processes.
- An ERP implementation team will be responsible for successfully deploying your new system and will ideally have members from different departments and seniority levels within your business.
ERP Implementation Project Plans Explained
ERP implementation project plans give companies the framework and guidance they need to move to a new system: a clear vision and measurable goals, a robust governance model, a map for redesigned business processes, plans for data migration and integration, a strategy for preparing users for the change, and much more.
For companies moving to cloud ERP, there’s an added planning dimension. Much like your smartphone gets regular software updates, so will your ERP cloud solution. So in addition to preparing for “go live,” the plan should include addressing the multiple-times-a-year software updates.
Before an ERP implementation, the team responsible must consult with key stakeholders on this process to ensure that the company as a whole is prepared for this change and that expectations are clear around timing and scope. An ERP implementation plan involves assessing systems, defining project scope and goals, creating a timeline, building an implementation team, cleansing and migrating your current data into a new system, testing the system, training employees, and providing ongoing maintenance and updates.
Phase 1: Create an ERP Implementation Team
Who you select from your business for your implementation team can determine whether you have a successful ERP launch or a project that fails to get off the ground. To have the best odds of success, make sure you choose people with the right skills, such as project management, budgeting and resource allocation, executive communications, data migration and system integration, and employee communication and change management. This means selecting your A-team from across different departments and seniority levels, having continued involvement from executive leadership, and choosing a highly committed team leader, preferably with experience in both the business and operations side of your business. For example, if you’re implementing a new accounting system as part of your ERP initiative, make sure you have a respected member of the finance team as a key implementation team member—and ideally as the leader of it.
Together, with your implementation delivery partner, your ERP implementation team will be in charge of following implementation best practices to make sure the new system gets launched and operates as planned. They will map out the requirements for the ERP system, establish key milestones, figure out how the system will support specific business processes, and test the software before it is live. Implementation experts recommend having your team members’ continued commitment for a several months after going live. They will help boost adoption through training and evangelizing the new system, which is another reason to make sure a domain expert who will use the new system is a key player on your implementation team.
“Business outcome-led projects are more likely to drive favorable results than IT requirements-driven projects,” advises John Hallin, vice president of delivery excellence for Oracle Consulting, which creates and executes ERP implementation project plans for companies. “Get talented people involved, including people in different departments across the organization.”
The key implementation leadership roles also can’t be treated as a side hustle to a person’s existing full-time duties. Assign key people on a full-time basis, where leaders participate in creating the project’s vision, own their functional areas for design and execution, and help prepare for what comes after, Hallin says.
Phase 2: How To Implement Your ERP System
Knowing your organization’s needs, project budget, and implementation timeline will help you choose the right implementation strategy. The two most common implementation strategies are the phased approach and the all-at-once, “big bang” approach. A phased approach means the ERP system is implemented in multiple waves, such as starting with one business unit or business function, and expanding the rollout from there. This allows for more user feedback and with lower stakes if unexpected issues arise. The all-at-once approach involves going live at one time with your entire ERP system. While it sounds risky, companies do embrace this approach because they then don’t have to integrate the new ERP to old systems and modules that will soon be retired, and because they can get to ROI faster if they succeed.
Beyond technology strategy, your implementation success plan must also consider the right strategy for communication and coordination with your project’s stakeholders. This means coordinating and collaborating with members of different departments and the executive leadership, understanding what their concerns are, and holding meetings to discuss solutions. It also involves extensive, transparent communication with employees who will use the system, so they understand the benefits that will come from this big change, and so they can get trained on how to use it to do their jobs. By doing so, people all across your organization will have a unified understanding of the new system’s expected benefits to each of their roles, productivity, and the business overall.
In general, your ERP implementation plan will include the following tasks:
1. Define your desired outcomes
Clearly defining the business results you hope to achieve through your project will make creating your implementation plan a much simpler process. You can start by having your team detail the business outcomes and process changes the key stakeholders want at the end of the implementation and connect that to the capabilities you need from your new system to deliver those benefits. Get agreement among stakeholders on the timing of when various capabilities are expected to go live. This effort will help clearly define and get agreement on the goals you want to reach at the end of your project. Make the goals as specific as you can. They could relate to improving operational efficiency, reducing costs, enhancing customer satisfaction, or improving data accuracy.
“You need clear articulation on the front end of the vision and goals, the overall governing charter, and stack hands to make sure everyone understands what the program is looking to achieve,” says Keith Williams, vice president for ERP solutions delivery at Oracle Consulting. An “implementation success plan” will serve as a kind of North Star to help you hit your targets, head off scope creep, and avoid the cost of a lengthy, uncertain implementation, Williams says.
For example, when adopting a new cloud ERP system, a leading American building supply company set this as its guiding principle: “Build a future, don’t reinvent the past. Deliver an enhanced user experience and engage stakeholders throughout to ensure adoption.
2. Standardize your business processes: Leverage an out-of-the-box approach
Customizations are expensive to maintain. The best practice in SaaS is to leverage out-of-the box functionality that supports the targeted processes in scope. Then we ask the question, Why won’t this work for you? It’s important to keep in mind that customizations can also complicate the upgrade process and impede the ability to adopt new features. The golden rule is to only customize processes where it is a key differentiator for your business.
3. Determine the sequencing of your project, based on your program goals
The sequencing of the implementation often depends on your priorities. You could start with your biggest pain point or focus on the functions that will drive the biggest return. Or you could identify one of the simpler, lowest-risk elements to give the team a quick win and build confidence in the system. By planning your implementation based on your priorities, you’ll be able to identify the most crucial steps to complete at the beginning, middle, and end of your project.
For instance, a major United States credit card company previously ran seven highly customized on-premises ERP systems. The company determined that simplifying its accounting processes and systems through one cloud ERP platform was its top priority. By addressing this first and foremost during their project, the company was able to implement a system that offers faster access to financial information and more accurate planning projections and cost analysis.
4. Map progress: Keep your implementation accountable
Track the progress of your implementation by regularly evaluating where you are against the timeline and the budget. Other indicators to track can include IT-related milestones or percentage of migrated data.
To keep yourself on track, your team should schedule project update meetings with key stakeholders to share project status and address any key issues. The implementation team can provide these updates using dashboards that track the timeline and deliverables for the project. Have a feedback mechanism to gather and respond to user questions as the new system gets rolled out.
After deployment, you should plan on monitoring and supporting your ERP implementation to keep users satisfied and ensure your business is achieving the desired outcomes. This will involve listening for user feedback, continuing to train new staff (and partners and vendors) on the system, adjusting your system accordingly, and doing any additional development and configuration necessary as new features are added to the system. A cloud-based ERP system will have software updates multiple times per year that you can choose (or not choose) to turn on.
5. Proactively prevent mistakes
Don’t get caught behind the eight ball because your plan was undeveloped.
Many implementation projects falter because their plan wasn’t clear or the timeline developed was unrealistic. Implementations can also fail due to lack of contingency planning, including preparing your organization to respond efficiently to a delay or issue. Your implementation team should contemplate what stumbling blocks are likely to occur and anticipate ways to address them. This could mean identifying any current weaknesses in your company’s business model that should be corrected before ERP implementation.
The right ERP delivery partner, executive support, and leading practices drawn from other businesses in your industry can lead to a successful implementation for your company.
6. Communicate early and often
Communication is an essential aspect of all phases of your ERP implementation. Your implementation team should remember to communicate the objective of the ERP implementation, the desired outcomes and benefits, and expectations of each phase to your larger organization on a regular basis. Additionally, your team should also prioritize listening to user issues both before and after deployment.
When the Taylor Corporation—a diversified global company that operates printing, data, and marketing businesses—implemented an ERP solution to modernize its back office, CEO Charlie Whitaker rallied the company’s 10,000 employees to believe in how the project would lead to the company’s growth. Whitaker accomplished this by leading steering committee meetings and working sessions with project team members. As a result of communication and employee buy-in, the Taylor Corporation was able to move its financial, supply chain, and manufacturing applications to the cloud and drive strong returns.
7. Compare goals to actuals
An important part of the implementation process is measuring and analyzing the performance of your newly implemented system against the initial goals that your organization set before and during the implementation phase.
Capturing the performance of your system involves collecting data and KPIs. Some of these will be related to application performance, such as uptime, speed, and security. Some will be around usage, such as number of employees using the system and how much they’re using it. And finally, some will be operational metrics, related to employee efficiency or financial outcomes, such as revenue, cash flow, and expenses. You should pick metrics that can be directly compared to the goals you set at the beginning of the project. When you compare goals to actuals, you can identify areas where your new system is either meeting, exceeding, or falling short of these goals.
Comparing goals to actuals will help you see whether your project is remaining in line with your business objectives and identify areas for improvement for your system’s performance and your business processes.
Phase 3: Create an ERP Change Management Plan
An essential part of any ERP implementation is an effective change management plan that will prepare your organization to plan and carry out the project and then operate using your new ERP system. An ERP change management plan will help your organization align the system with your business processes, enhance communication and collaboration between team members, increase user adoption, and reduce the risk of project delays or failures.
There are many things to consider in creating an effective change management plan that will help your organization embrace change. There are several key cultural drivers that lead to successful change management during an ERP implementation, says Oracle’s Vice President of Transformation and Strategic Services Betsie Reynolds. Those drivers include encouraging collaboration across your organization, inspiring your people to embrace new ways of working, and driving change from day one.
“It’s not just a technology project, it’s a change to the processes that people will use to do their daily work,” Reynolds says, “We all know change is not easy, but it is inevitable. When people know what’s coming they are less apt to be fearful and instead can experience business transformation as inspiring and motivating.”
To keep up the excitement around this move to a new ERP, your organization should also see the implementation as an opportunity to transform and simplify business processes, instead of just replicating what’s been done in the past. “You want a team that will avoid what’s called ‘paving the cow path’—meaning they walk where they have always walked,” Hallin said. “What you need are people in your team who are open to creating a new path based on leading practices.”
Bringing in a new ERP system can mean that the company asks people to do their jobs differently in order to embrace the industry best practices built into cloud-based ERP applications. That’s a departure from implementation plans of the old on-premises software world when consulting companies would do extensive customizations to make the software accommodate a company’s unique way to bill customers, pay suppliers, reconcile bank statements, or any number of common business activities. With today’s cloud ERP systems, implementation experts advise that companies adhere to out-of-the-box leading practices and avoid unnecessary customizations. The City of Tampa, for example, was able to go live in 10 months on ERP, human capital management (HCM), and supply chain management (SCM) cloud by doing an out-of-the-box implementation, getting rid of 8,500 customizations that its previous ERP system had. Their advice: Get to the cloud quickly and iterate.
Phase 4: Migrate Data and Manage Integrations
Migrating your data from its previous sources to your new ERP platform is an important process that involves moving data from various systems and formats into a single system. Depending on your line of business, this data can be product, customer, partner, inventory, supplier, and financial data. A successful data migration relies on inspecting, extracting, cleansing, and transforming data before moving it into the new system. This process is crucial to ensuring that the migrated data is accurate and complete, which will help people across your departments who depend on this historical data. A data migration that is well planned will keep your implementation project on track with its timeline which, as a result, will keep your project within budget.
Implementing a new ERP system is also an opportunity to comb through your organization’s data and decide what is worth moving to the new system. Some organizations will migrate all historical data, but transferring every piece of data will make the implementation longer. Some of the information in your old system may also be irrelevant, such as suppliers you no longer use, customers that haven’t ordered in years, or products that are out of date. You may even find data inaccuracies you need to cleanse. When deciding what data to keep, think about what data you need for decision-making across your business and include each department. Typically, companies migrate two years of historical data, unless there are compliance rules for more historical data. This simplifies your implementation effort and enables you to focus on the future while keeping your data clean and manageable.
For your data migration, you will first have to assemble a data migration group, which can consist of members who are already a part of your overall implementation team. This group will examine the data in each of the source systems and discard the data redundancies and inconsistencies mentioned earlier. They must also map the data to the ERP database structure before importing it. This process, known as data mapping, bridges the difference between your old system and the new one to ensure that the data being moved from its original source is accurate and usable in the system it is moving into.
Once data mapping is done, this group will extract data from the old system, transform it into a format suitable for the new ERP, and load it into your latest system. Afterwards, they will have to verify that the data is complete, accurate, and correctly migrated by comparing the data that’s been moved with the source data and searching for any inconsistencies or errors between the two. Lastly, the group will conduct tests to confirm that the migrated data is integrated with the new ERP and performs correctly with the system’s modules. Be sure to test all aspects of the system, such as security, performance, and functional aspects.
Another critical consideration for any ERP implementation is managing integrations to other software systems. For example, you may want to integrate legacy boundary applications that sit on a different platform. Integrations can cause unexpected delays and bust project timelines if they prove more complicated than expected. Ideally, your new ERP systems has prebuilt adapters that ease integrations. A huge benefit of a new ERP system should come from having trusted data that the organization can use to make their operating decisions. Sharing that data will likely involve integrations, so they need to be part of the implementation plan, with your new system acting as the enterprise hub from which to manage all of the data and integrations.
Phase 5: Launch the ERP and Prepare for What Comes Next
Completing the launch of your new ERP system will include a lot of processes that you must carefully plan out, such as design, project plan development testing, deployment, and evaluation of results. To ensure the success of these steps, you must identify the tasks and deliverables for each one and assign the roles and duties for these to your launch team members.
It would also be beneficial for your team to set expectations for the budget and timeline for your launch process and to monitor those two aspects along the way and have contingency plans for any changes or issues that may cross your path. To achieve a successful ERP solution in the long term, it would also be beneficial to develop a plan to continue to review and optimize your business processes after your ERP goes live. This could involve gradually adding new features and functionalities along the way.
“Don’t view the launch as an end, but view it more as a beginning,” Williams said. “Similar to moving into a new home, you need to plan well so that you can take time to adjust to living in your new home.”
Extra credit: Avoiding Hidden ERP Implementation Costs
Once your ERP implementation team has researched, met with vendors, and made their final software selection, your ERP implementation partner can provide not only an ERP implementation success plan but also an estimate of the cost to implement your new system. However, there are almost always unforeseen costs along the way during your ERP implementation journey. To help avoid this headache, here are hidden costs you should try to anticipate:
- Personnel cost overruns: A crucial part of your ERP implementation is ensuring you have enough people and the right skills to execute the project. Personnel will account for a lot of your project cost, since you need to pay your project team and potentially hire temporary staff to fulfill the jobs your team members leave unattended as they prioritize implementation. Plus, you may need outside project management or IT consultants to provide expertise and extra hands during this process.
- Delays: Time is money, and the longer your implementation is stalled due to delays, the more costs you will inevitably incur, including the benefits you’re not reaping from the new system. Delays are often caused by unrealistic expectations for the scope and timeline at the start of the project, heavy workloads for team members juggling the implementation and their everyday jobs, your implementation team and company leadership not being aligned on project objectives, slow decision-making, and lack of interest from the company’s leadership. You can mitigate these delays and the costs they create by carefully planning and knowing what to expect of each phase of implementation, sharing information with your implementation team as well as your leadership and the broader organization, and making the necessary arrangements for your implementation team members to focus on the project.
- Training costs: Another vital piece of your implementation to consider is preparing your employees to learn new processes. For instance, an employee at your company may know how to create a purchase order, but with the new system the steps to make the same purchase order may vary. Your workforce will also have to learn new processes that they haven’t done before. For example, let’s say your employees previously copied data to a spreadsheet as part of their financial planning and reporting. But now, your new ERP will let them build dashboards and reports within the system, and they will have to be trained to learn this new process. Consider timing your training so that people can start using the new system in their daily lives as soon as training finishes. Keep in mind that training takes time, and people learn in different ways, so offer ongoing training and multiple ways to learn, such as in-person classes, online, videos, and within the application using a digital adoption tool, like Oracle Guided Learning.
- Time lost: Major software updates almost always require an adjustment period for organizations to learn and navigate the new system. This could mean a slowdown of operations or some loss of productivity after the ERP system goes live and your workforce makes this transition. Your implementation might also call for some planned downtime for your old systems. Both of these instances can cause your business operations to lag, creating a potential for revenue loss and dissatisfied customers.
Move to Cloud ERP with Oracle
While creating an ERP implementation success plan can be an extensive and detailed process, the payoff for your business could be considerable. What you have to gain from selecting a new system, migrating existing data, and launching your platform is a single system that can unlock numerous benefits for your business. This includes giving your company one source of connected, real-time financial and operating data, which can help improve decision-making. A cloud ERP system can have both the scalability and agility to support your business growth and address shifting priorities.
Oracle Fusion Cloud ERP is a complete cloud platform that can automate and run hundreds of processes needed to run your operations and report on the results. Oracle Cloud ERP includes embedded AI to automate the manual processes that slow your operations down and analytics for you to quickly respond to market shifts. As an industry-leading ERP cloud solution, Oracle Cloud ERP is part of a suite of Oracle Fusion Applications that provide unified data, connected teams, and valuable insights that can allow your company to run more efficiently and help your leaders make better business decisions.
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