ERP software is a critical component of any organization’s business strategy. It can help you streamline your operations and save you time and money while improving your organizational efficiency. But while ERP software can provide tangible benefits to your business and your employees, it can also present some unique challenges. When implemented incorrectly, it can slow you down or even thwart your business goals. To ensure your ERP implementation is a success, take these essential steps.

Identify your long-term goals

The first step to a successful ERP implementation is defining your organization’s long-term goals. Are you trying to increase revenue, decrease costs, or improve efficiency? These goals are helpful, but one will resonate with you and your business the most.

If you’re not sure where to start, start with the why. Why do you want an ERP system? Where does an ERP system fit your organization’s overall strategy and business plan?

What will success look like? What are you trying to accomplish with it? Once you can clearly articulate your goals, you’ll be able to evaluate the software options available to you better.

Identify your short-term goals

Once you’ve determined your long-term goals, the next step is to break them down into smaller, more immediate objectives. These short-term objectives will help keep your business moving forward while also providing a way for you to measure how well your ERP software is working for you.

For example, if one of your long-term goals is to increase revenue by 25 percent within three years, one of your short-term objectives might be to increase revenue by 10 percent within the first year. These short-term goals give both you and the vendor with whom you’re working something tangible against which to measure success. And when it comes time for a review or renewal of the contract, this objective can serve as a starting point in negotiations.

Get the ERP implementation terms and ideas right

If you’re not careful, you could be setting yourself up for an expensive implementation failure. Before you even start building the system, it’s essential to make sure you know what you’re getting yourself into. The first step toward a successful ERP implementation is understanding the terminology associated with ERPs. Not all ERPs are created equal, and there are a few key terms you should know before you start your implementation.

For example, if you’re looking to outsource your ERP implementation, you should know that there are two basic types of ERP systems: hosted and on-premises. Hosted ERPs are offered as a cloud-based service. This means the vendor hosts the software on their servers and provides you with access to it over the Internet. The upside is that it’s more affordable than an on-premises system as you don’t need to purchase and maintain costly servers, but the downside is that you lose some control over how the ERP system is implemented.

On-premises systems are those that reside entirely on your servers. They typically require a more considerable initial investment than hosted systems, but they offer more control over their setup and maintenance.

If your organization is complex, you may also consider developing your ERP system over an off-the-shelf platform. This is known as an in-house ERP implementation. In-house ERP development is usually reserved for organizations with a high level of expertise in software development and system integration. Still, it also has the potential to be the most cost-effective option over the lifetime of the implementation project.

Assuming you’ve chosen a cloud-based hosted ERP solution, four critical components to implementing it are data migration, business process mapping, system configuration, and testing.

Data migration is moving your existing data from your legacy systems into your new cloud-based system. The good news about data migration is that it’s relatively quick and painless compared to other parts of the implementation process. The bad news is that how quickly and painlessly it goes depends on how well you prepare for it.

If you’re migrating from a paper-based system, you’ll need to scan all of your documents before uploading them into the new system. If you’re migrating from an electronic system, you’ll need to extract your data from it and load it into the new system.

Regardless of what you’re migrating, you’ll need to ensure that the data is in a compatible format with your new ERP system. This could include transforming it from one database structure to another or replacing special characters with their plain text equivalents.

Business process mapping is an activity that management can do at any time during the implementation project, but it’s usually performed after data migration has been completed. Business process mapping aims to identify workflows within your organization and map them out to make them accessible for users to follow.

For example, if you’re migrating from a paper-based system to an electronic one, you’ll need to map out each step in your workflow. If you’re migrating from an electronic system to another electronic system, you’ll need to map out the steps that exist in both systems.

Business process mapping helps users understand their new system by showing them how their old and new systems are alike and how they differ. It also helps identify areas where the new system needs improvement.

System configuration is the process of taking your new system and configuring it to match your organization’s needs. This includes everything from changing the way records are displayed to how data is stored.

System configuration can be done at any time during or after the implementation project, but it’s usually performed during production testing and user acceptance testing. Once your system is fully configured and ready for users, you’ll need to perform a series of tests to ensure that users can perform all their assigned tasks.

You’ll likely be performing multiple types of tests, including user acceptance testing, data validation testing, and performance testing.

User acceptance testing ensures that users can complete all the tasks they need to perform using the new system. This is usually done in conjunction with training users on the new system.

Data validation testing ensures that data imported or exported into your new system matches your old system. You may also want to validate data during user acceptance testing, but it’s not always possible to do so without disrupting business processes.

Performance testing ensures that your new system performs at an acceptable level. This can be particularly important if you’re replacing an older system, as users will compare it against the older system rather than other systems in its class.

Analyze your current business processes

The first step toward a successful ERP implementation is to analyze your organization’s current business processes thoroughly. Once you’ve identified your organization’s long-term goals, it’s time to identify the techniques that will make achieving those goals possible.

The second step is to break down each process into discrete steps.

For example, if you sell furniture, there are many stages between designing a new piece of furniture and delivering it to the customer. Break down each process into discrete steps and identify what data is needed to complete that step.

Once you’ve identified your business processes, it’s time to create a flow chart. A flow chart is a visual representation of your operations. Flow charts are helpful because they allow you to see how each process interacts with the rest of the organization. Consider using the industry-standard BPMN 2.0 diagramming notation for your ERP implementation.

These diagrams are where you document how users will transfer data from one process to another. The goal is to identify all of the data that passes through your business and how it’s ultimately used.

Each box in the flow chart represents a step within your business process, and each arrow represents the movement of data from one stage to another. The arrows will change depending on which actions are performed by different departments or members of your organization.

For example, if you own an ice cream shop, one process might be creating a new flavor of ice cream while another process might be packaging it for sale in pints, quarts, and gallons. Another process could include taking orders over the phone or online and sending them to the production department.

The flow chart will look different for each organization, but it should be easy to follow and clearly illustrate how data is transferred between each step in the process.

Creating a flow chart may seem like a tedious task, but this is really where you begin to see how valuable your data really is. Once you’ve created your flow chart, it’s time to determine which data elements are collected at each step and what type of information they contain.

Build your ERP project plan

An ERP implementation is like building a house: You need to start small and work your way up. The first step in building your ERP project plan is identifying the specific elements and resources required to build the ERP system.

The elements include hardware, software, and, most importantly, people. Some of the resources you’ll need for the hardware and software elements include hardware and software engineers, technicians, programmers, and information systems experts. Other team members include project managers, business analysts, and user experience designers.

You’ll also need some non-technical resources to make your ERP project a success. These resources include communication experts, business continuity and disaster recovery experts, and change managers. All of these resources will play different roles in your ERP implementation.

Several ERP consultants, such as Hartmann Industries, can help you create an ERP project plan that’s customized for your business.

Create a pilot test program

A pilot test program can help you avoid a common deployment mistake — building your ERP system before thoroughly testing it. Pilot test programs involve creating a limited-time test environment to simulate the entire operation of your ERP system.

If your project is already underway, you can use your pilot test to test the performance of the ERP system. You can also use the pilot test to collect feedback and make improvements.

Your pilot test can simulate aspects of your full-scale implementation, like the performance and functionality of core business processes. It can also simulate how your users will interact with your system.

Make sure everyone is on board

One of the most common mistakes businesses make when implementing an ERP system is rushing the implementation without enough planning or preparation. With so much riding on a successful ERP implementation, it’s easy to fall into the trap of pushing ahead without the full support of your organization.

One of the best ways to avoid this mistake is to get buy-in from all levels of your organization — from the president and CEO to the front-line employees. This can help you avoid any potential pushback. It’s essential to show the benefits of your ERP system to all stakeholders and be prepared to answer questions.

Implement an ERP system

If you followed all the steps in the previous sections, the only thing left to do is implement the system. But don’t underestimate the importance of this step. Implementing your ERP system can be challenging, especially if there are no templates or best practices to guide you. It’s easy to make mistakes that slow you down or even derail your business.

Implementing your ERP system doesn’t have to be complicated or expensive. There are plenty of affordable consultants available to help you implement an ERP system. They can help you avoid the most common implementation mistakes and ensure a smooth transition to your new system.

Don’t forget to track your implementation costs

Implementing an ERP system may be one of the most significant projects your business will ever undertake. It’s essential to track all of your implementation costs to ensure you have a good return on investment (ROI).

It’s also important to factor in any missed or delayed opportunities due to the ERP implementation. If you think it might be helpful, consult with an accountant or other professional who can help you calculate the ROI for your ERP system.

How low-code platforms fit into modern ERP implementation

Finally, we come to the most crucial part: how an ERP system can help your organization. The best way to find out is to answer the question, “What’s in it for me?”

ERP systems are complex systems, and it’s important to remember that every company is different. You need to address how your ERP system can help you specifically and make sure that your organization has a net gain.

ERP software can help you increase revenue, reduce costs, and improve efficiency. It’s a great tool to help optimize your business.

One of the most modern innovations in the ERP industry is the arrival of low-code/no-code app building platforms. These platforms reduce initial development complexities, decrease development costs, and accelerate the time-to-market. With a low-code platform, you can create an ERP solution tailored to your needs and get it up and running in no time.

A low-code platform such as TrackVia is an excellent fit for any organization looking to create or modernize its ERP software. You can build your custom solution in a few days and get it up and running in a matter of weeks, perfect for any business that needs to get up and running quickly.

Companies of all sizes have used TrackVia to build everything from simple inventory systems to complex ERP solutions. No matter what you need, TrackVia’s low-code/no-code platform makes it easy and affordable to create the right apps for your needs.

Conclusion

An ERP system is a critical component of any organization’s business strategy. Before starting an ERP implementation, you need to remember that you are committing to your business and your employees.

If you are thinking about implementing an ERP solution, you need to ensure that the system you choose will work for your enterprise. You should carefully consider both the short- and long-term costs of the ERP solution and its impact on your organization’s people and culture.

The right ERP system can help your organization operate more efficiently and effectively, leading to better financial results. The wrong ERP system could lead to frustration for everyone involved.