ERP implementation life cycle is the process of deploying enterprise resource planning software—from planning through go-live and beyond. The typical implementation cycle is six to 12 months. But don’t think it’s all about software. Make sure you’re prepared for these eight stages of ERP implementation.
One question that always comes up very early in the process when considering an ERP implementation is “How long will it take?” While there is no general answer to that question – ERP implementations proceed at their own pace – the process can be outlined by way of a timeline or life cycle. Just for perspective, an ERP implementation can take anywhere from a few months to several years, with the majority ranging from six-to-12 months from kick-off (project planned and funded, team organized and ready to go, ERP technology and ERP system software delivered – if appropriate – and installed) to a live system in full operation.
However long ERP implementations take, the result is the use of cloud-based ERP technology that makes end users’ jobs easier, efficient, and effective. And advanced understanding of the life cycle phases gives you a head start on experiencing a successful ERP implementation.
The 8 of the ERP implementation life cycle
Planning and organization – In this commentary, we’re not counting this phase as part of the time it takes to implement the system as it all occurs before the start of spending money or real physical activity. Nevertheless, a team can be assembled and a decent plan developed in a matter of a few weeks, for a motivated company. More typically, the planning stage might last up to six months or more.
System selection and installation – Selecting the ERP system software and ERP technology can be a challenging endeavor, given its importance to the project and the vast array of choices. From requirements definition and early market surveys through determining the “short list”, gathering proposals, holding demonstrations, final selection and negotiation, this phase typically consumes anywhere from 3-to-6 months.
Installation – Sometimes there is a lead time for delivery of hardware and software, installation of infrastructure components like networking facilities and data collection / display devices, and installation of software that could be anywhere from several days to several weeks or more. Cloud-based ERP may have little or no installation lead time and no software installation requirements.
Data conversion and loading – Once the ERP technology and ERP system software is ready, data must be entered and/or moved into the system’s database. This includes “basic records” like customer, vendor and item master files, bills of material, production facilities and routings, general ledger chart of accounts, and the like. Just before going live, active transactional data is converted or transactional activity is transitioned into the new ERP system software. Some of this activity can be completed in parallel with other tasks like training and validation. IT resources and consultants/contractors can primarily accomplish some of this activity, as well. While a significant amount of time and effort is required, this requirement will not add significantly to the implementation timeline.
User training and procedure development – This is arguably the most important part of ERP implementations; procedure development (and documentation) and user training should take up the majority of the timeline. These requirements consume considerable time and effort from operational employees (actual future users of the system) who are also expected to do their existing jobs at the same time. The duration of this phase depends on the size and complexity of the ERP system software being implemented (number of modules or functional areas involved, number of users, how different the new procedures will be from existing procedures), and how much time users can dedicate to the implementation each day or week. Some companies bring in temporary help but these outside resources should be devoted to maintaining old procedures rather than working on the implementation per se.
Testing and validation – IT resources will be heavily involved in this task, working with the users to compare and examine both basic records and transactional data to verify that the data is exactly as it should be (and at least as accurate as in the incumbent system) and that the new ERP system software is producing the expected results. Testing and validation occurs over an extended period as each functional area loads data and starts processing (test) transactions by the users during training and procedure development. This is not necessarily parallel operation; in most cases, it is more of a “pilot” testing situation. Testing and validation do not add much to the timeline explicitly but must be considered in planning the duration of the training and procedure development process.
Cut-over and “go live” – This can be instantaneous (sometimes called a ‘big bang’ approach), phased in piece-by-piece, or parallel operation where users are expected to keep the old system and the new system in operation simultaneously for a specified period of time (typically one or two accounting periods).
Follow-through and project completion – Implementation is not complete once the new system is ‘live’ and the old system is turned off. Users and technical support resources must continue to validate and verify proper operation; user training should continue to enable a more extensive use of what the ERP system software has to offer and expand the benefits of the system.
ERP technology represents a continuing opportunity to improve performance.
ERP implementations pave the way to continued success
As your company grows and changes, as markets evolve, as people come and go and work their way up through the company structure, as technology continues to offer new challenges and opportunities, your ERP system will change and so will your use of the system. Be sure to keep the user community involved and informed so that your new ERP system will continue to provide the data management support you need for continued success.
ERP implementation is a necessary first step but is only just that – a first step. Contact our team as you begin to move forward and let us collaborate with your team through every step – or phase – of the way.