It’s virtually impossible to compete in the market without implementing ERP software. It automates trivial functions, speeds up operations, breaks information silos, allows different departments to work as a cohesive force, and enables interacting with customers in a better way. ERP implementation is a step-by-step procedure that can, at times, become a complicated process. Each company follows a different implementation strategy because it depends on budget constraints, business goals, time sensitivity, etc. This article sheds light on some of the widely used ERP implementation strategies and talks about their benefits and drawbacks.
ERP implementation strategies
1. The Big Bang Implementation Strategy
In this strategy, all the ERP modules and enterprise-wide functionalities are implemented on a single day. The employees have to migrate to the new ERP system on the same day. The implementation can happen at different geographic levels — city, state, country, or many countries together. This strategy’s most significant disadvantage is that companies cannot migrate back to the previous system once the implementation has been done. It also has various benefits like the implementation takes less time than other strategies, and resource wastage is also minimum.
2. Mini Big Bang Implementation Strategy
The mini big bang implementation strategy follows the phased rollout approach for implementing ERP systems. What this means is that different ERP modules are implemented separately. For example, the finance module is implemented in the first stage, the marketing in the second, the human resources in the third, etc. Thus, it’s easier to tackle the rollout challenges of every unit separately after their implementation. Another advantage is that the employees get a hands-on-experience before the project begins to roll out. One of the drawbacks of this strategy is that some companies experience performance deterioration after the implementation process has been done.
3. Phased rollout implementation strategy
In the phased rollout implementation strategy, the implementation happens in different phases over a long period. The core management team gets enough time to think about how the implementation is done, which allows them to brainstorm a perfect strategy. The strategy often includes elements such as:
a. Implementation blueprint
c. System testing
A significant advantage of this strategy is that teams learn from the failures of the initial implementation stages. The drawbacks include employee fatigue because it takes too long to implement all the ERP modules.
4. Phased rollout by geographical location
This strategy is gaining momentum in the current scenario because many companies are opening branches in multiple locations. And by adopting a phased rollout by geographical area, they can adapt according to a particular region’s diverse needs. This strategy’s significant advantage is that companies can gain a 360-degree perspective of a specific region’s social, economic, political, cultural, and organizational aspects. The drawbacks include implementing various change management processes simultaneously.
5. Phased rollout by business unit
Big businesses have multiple departments that function autonomously. In this strategy, the ERP modules are implemented one by one across each department. It’s a profitable strategy as employees learn from past implementations’ mistakes and avoid repeating the same in the future. This strategy’s advantages are that it has a higher employee acceptance rate and is less risky. On the contrary, the drawbacks include a longer implementation time.
6. Parallel rollout implementation strategy
This strategy requires the use of both systems — legacy systems and the new ERP system. Employees can learn to work on the new system while operating the old one. The plus point of this strategy is that there are no system migration and data integrity issues. The only drawback is that every transaction is recorded twice, in the legacy system, and then in the new ERP system. Moreover, ERP implementation cost may skyrocket in the final stages.
ERP implementation is a rigorous process and consumes a lot of time. There are various strategies, with their advantages and drawbacks, that companies can adopt to install the ERP system successfully. Once the ERP is installed, you will feel the difference in the way you do business. The ERP software will automate all business-critical functions, and employees will have more time to focus on work that needs human ingenuity. Moreover, various departments will work in tandem with each other. You will serve your customers efficiently and give a tough fight to the big sharks in the industry.