3 things businesses need to know when undergoing a major ERP change

Companies need to review their business processes, ready their staff and manage data migration when changing their ERP.

Kate Cribb, Senior Manager Application Delivery, Canon

Enterprise resource planning (ERP) software allows companies to integrate all facets of their operation – including product planning, development, manufacturing and sales – into one application. But when undergoing a major ERP change, companies should ensure the switch is a success with some key planning.

Kate Cribb, Senior Manager of Applications Delivery, IT & Communications at Canon, talks to Fast Business about what companies need to know when changing their ERP.

Managing business processes

Before switching to new ERP software, companies should identify which of their processes are business differentiators and which are not, explains Cribb.

“The worst thing you can do is to break something that actually gives you market share or profitability. So, you really need to know where you’re doing something that’s unique or where you have high dependency,” she says.

For business processes that are not differentiators, Cribb advises companies should look to change them to the processes built into the new ERP.

“Ensure all your processes align with the new ERP tool sets. Otherwise, you will end up customising yourself into a place where it’s difficult to operate or upgrade.”

Companies should also design their ERP so it allows them to let go of their legacy system – or risk being caught halfway, with the cost of their old system and the cost of their new one.

Leading organisational change

Cribb says organisational change must be activated from the inception of the ERP project all the way through to six months after its implementation. This means readying staff for the change by identifying employees who can manage particular parts of the ERP project.

“It’s the executives and people in business units who are going to use the system that need to drive implementation locally, so you need to be working out how the new processes will impact their business practices,” Cribb says.

Once executives work out how the ERP project will affect individuals within teams, new roles, processes or operating procedures will need to be developed.

“It’s important to identify where there will be issues [in the post go live environment], so you can develop job roles, processes and reports that ensure you have quality inputs and outputs to the system and that it’s actively managed,” she says.

Companies should also be aware of the fact that employees working on the ERP change will not be available to do their normal job to full capacity so should prepare for this, Cribb says.

“Management should consider if they need to pay for additional resources to backfill operations, or can handle the reduction in productivity to be able to release their subject matter experts into the ERP project,” she says. “They should make sure all the staff working on ERP are truly available to the project and are actively reporting into the project.”

Handling data migration

It’s important to understand your company’s data in terms of how it’s used and where it comes from when implementing an ERP change, says Cribb.

“Changing your ERP actually means changing your data model, so you need to work out which data has to migrate and which data just has to be available. Then that allows you to work out the start of migration.”

Data migration is complex and expensive. When it comes to historical data, companies need to find a way to draw it forward so it connects with the data in the new ERP.

“For example, if you have a client relationship which has gone on for five years and you want to have access to the full client history, it may not be cost effective to migrate all of your client history. Instead, you might look at migrating only the past year of that client’s data, and make the earlier historical available another way,” says Cribb.

Other takeaways

Offer staff incentives. Why not reward staff – which can range from taking staff out to lunch to giving them gift cards as a thank you for exceptional efforts – for their contribution to the company’s ERP project?

Be business ready. Starting an ERP change means being ready across three areas: processes, people and data. “If any of these things aren’t ready, don’t go ahead [with an ERP change] – business ownership is key,” Cribb says.