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Managing an ERP Project During an Economic Slowdown

An economic slowdown can certainly dampen the speed of any ERP project. Uncertainty and potential lack of availability of resources may present new hurdles to overcome. However, it may not be necessary to suspend or terminate an ERP project altogether.

Instead, there are several valuable options to refocus efforts on. This covers some of the areas which may be hidden gems of opportunity. An economic slowdown can certainly dampen the speed of any ERP project. As expected, many businesses that were evaluating an ERP selection prior to COVID-19 have placed their projects on hold. Concerns over cash flow and supply chain have become priority, as well as implementing emergency procedures for protecting daily operations. However, it may not be necessary to suspend or terminate an ERP/CRM project altogether. Instead, we suggest to reallocate time, when operations are slow, into the following areas- and wrapping up the open project once business picks back up. We see other businesses using this logic and benefitting from the extra attention invested in planning.

After the immediate needs of staying in business have been addressed, refocusing (and investing) some of the extra time available in an ERP project may result in significant positive ROI once the project is live. There are many areas to focus on regarding an ERP project which can benefit from the extra time available. Here are a few areas which may be hidden gems of opportunity.

Successful ERP implementations all have some common traits, most of those are based on time. Time is needed to do an in-depth evaluation and analysis of current business process currently, and a road map for future state operations. Time is also needed to implement, train, and perform testing. It is exactly these areas, which when overlooked or not invested in sufficiently, that lead to ERP mistakes and failures.

In most projects I’ve worked on, clients are in a hurry to complete a project as quickly as possible so as to avoid a disruption in daily operations, to keep key stakeholders focused on productivity, and because there is seldom time to do deep testing. They see any time taken from an employee doing their normal daily job as “lost time” in productivity and lost revenue. When, in fact, this lack of attention, and investment in thought leadership and expertise is cause for most ERP failures.

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Now that businesses are slowing down, or stopping altogether, time is suddenly in abundance. Those businesses who are evaluating an ERP play can invest this time to dive deeper into areas that otherwise get glossed over. Here is a summary of ways to gain ERP ROI during a slowdown.

Need help with your current ERP project? Reach out to our experts.

Pre-Project Phase aka Alignment

Evaluating Options: Before implementing an ERP, businesses spend considerable time looking at options. This includes evaluating which software might be a best fit or can include a re-direction in business strategy to achieve 1/5/10 year goals. Invest time in seeing more demos, more detailed conversations with vendors and understanding the vendor’s process better.

Identifying Requirements: All ERP projects must have a list of requirements to be included in the SOW (Scope of Work). It is a list of deliverables to which both the buyer and the implementation partner commit. Invest time in setting detailed expectations for SOW, order of events and accurate project requirements.

Identifying & Including Key Stakeholders: Successful Fit-Gap Analysis requires interviews with key stakeholders to understand daily activities, requirements and requests for the eventual ERP implementation. Invest time in detailed interviews with stakeholders, identifying the right end-users and understanding business processes.

Determining Timeline: An ideal delivery timeline based on kick-off date and “go live” date needs to be discussed. Questions that an implementation partner may ask include, “How quickly do you want this completed,” “What is your ideal ‘Go Live’ date?” These critical questions help the implementation partner determine how many resources (people) are needed and in which configuration in order to deliver on the desired dates. Invest time in developing a realistic delivery calendar and understanding how much time is actually needed from the end-user(s).

Determining Budget: Naturally, the question of the budget must be discussed. How much does the buyer have available for implementing the ERP? This critical question is the foundation for selecting the appropriate software (license cost) as well as the speed of implementation (phased vs “as quickly as possible”). Several conversations with the C-Suite may be required, and if funding is being requested, it may take time for a lender to approve the buyer. Invest time in detailing costs involved in the project, making sure an adequate budget is available.

Software Licenses: Finally, once the correct software and software architecture has been determined, one must purchase licensing from the software vendor. This may include a sandbox for development, server space for configuration, and any connectors, or supplemental software required to begin the implementation process. This step can sometimes take up to 2 weeks depending on negotiations and provisioning timelines. Invest time in negotiating license costs with vendors, planning enough time to set up the environment and testing.

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Implementation Phase

Setting Up the Environment: Getting the correct environment set up takes time. Constant communication with the buyer’s IT department is necessary. Internal IT along with the implementation partner will develop the correct infrastructure setup and security environment to deploy the ERP. This step will also include setting up initial users and passwords, setting up the sandbox and testing to make sure it works correctly. This step can sometimes take up to 3 weeks depending on the speed of all parties involved and the requirements for the environment. Invest time in understanding the cross-implications of changes in the environment, setting up security features, infrastructure efficiencies and testing.

Sprint Definitions: The Project Manager (on the implementation partner’s side) will translate Fit/Gap Analysis documents and architecture documents into an action plan segmented into Sprints. Each sprint has a measurable outcome/deliverable which needs to be tested. Creating the calendar and making sure that both the partner and the buyer can commit to the schedule is imperative. Invest time in matching time, resources and deliverables into Sprint plans.

Team Allocation: Once the project scope and sprints are defined, the correct team resources will be pulled into the project. If highly specialized resources are currently committed to other projects, there may be a delay. Invest time in ensuring the correct resources are available at the right time. Plan for unexpected delays such as sick leave, holidays and business interruptions.

Configuration: Now we’re rolling up the sleeves and doing the work. Each project is unique and configuration times are variable based on many factors. Spending enough time in this step to code the system correctly is as important as laying out the plan. Invest time in making sure the instance is performing as expected, stand up meetings to discuss any areas of concern and communicate with the buyer of any issues.

User Acceptance Training (UAT): User Acceptance Training is the step required to test a sprint along with the end-user. At this point, a key stakeholder is in the production environment testing a particular feature to ensure it meets the standards defined during the alignment and architecture steps. Depending on user availability, this step can be quick or experience delays. Invest time in ensuring the UAT is understood and measured correctly, that the end-user is capable of repeating the function.

Train the Trainer: After a sprint has gone through UAT, it is recommended that the implementation partner spend enough time training the key stakeholders, or those who will be responsible for training the workers, on the new system. This very critical and time-consuming step is often treated as “less important than…” other steps. Invest time in making sure the key stakeholders understand how to use the new system and that end-users can correctly perform their job without additional assistance.

Post-Project Phase

Go Live: It’s the day to unveil the new ERP to the world! Everyone looks forward to this day, and to make it successful an “all hands on deck” mentality helps. Yes, it’s time-consuming and nerve-racking, but exciting at the same time. Invest time in assigning all the correct people to verify the deployment, ensure there are extra resources available for any critical response required.

Support: The implementation partner and buyer work together to fix any bugs which may pop up. Additional training is offered, and any unforeseen requirements are addressed. Invest time in making sure the IT team is available for any issues and key stakeholders have time to discuss any issues that arise.

New Requirements: More often than not, new opportunities and requirements are added to a project along the way. The buyer usually sees opportunities in the new system which can become requests for additional development. Invest time in developing next steps for your new ERP!

Economic slowdowns and downturns happen for a variety of reasons, and at different times for businesses. It may be because of business seasonality, unexpected disruptions to the niche market, or, in extreme cases, a global slowdown due to disease. However, it is not necessarily imperative to stop all dialogue regarding an ERP selection and eventual implementation. Use this new-found time to dig deep into the many areas listed above to improve communication, improve efficiency and double-triple check features and requirements. This investment in time will certainly pay-off by ensuring a higher success rate in deployment. You’ll be glad you invested the time.

Author: Christina Barea | cbarea@withum.com

Digital and Technology Transformation

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