THE DEBUNKING HANDBOOK: Top 8 Myths About ERP Implementation

The Debunking Handbook: Top 8 Myths About ERP Implementation 2

Implementing an Enterprise Resource Planning (ERP) software is an essential process that companies often decide to undergo without understanding what it entails.Many businesses that choose to integrate operations under one enterprise resource management software believe that buying the license is the hardest decision.Not even close.

This lack of knowledge takes a toll on the process before it even begins. ERP vendors frequently need to clarify false assumptions as they streamline deployment, affecting performance and use of resources. And it is taxing on the client as well.

That’s why we’ve decided to set up this handbook to clarify common misinformation and fallacies about ERP implementation. Having this information at hand is crucial for your decision-making process. It will help facilitate your ERP vendor selection, especially if this is your first time going through an implementation process.

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The 8 Myths exposed!

Myth 1: It’s All About The Price

Myth 2: ERP Implementation Is

Expensive

Myth 3: Better To Do It With The Original Manufacturer

Myth 4: It’s Impossible To Know How Much

Deployment Will Cost

Myth 5: Anyone In IT Can Do It

Myth 6: Any ERP Consultant Will Do It

Myth 7: Any Failure Is The Vendor’s Fault

Myth 8: Customization Is Just A Feature

8 Key Takeaways From This Guide

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False. Price does not determine a successful implementation. There’s no standard pricing plan as each deployment should be custom tailored for your specific business requirements. Several factors influence the entire experience from beginning to end. Some are dispensable, while others are essential.

It depends. The implementation process is influenced by several variables that differ significantly from one company to another, costing time and money.Here are four best practices you can adopt when planning an ERP implementation process from start to end.

1. Plan as much as possible. The ERP implementation service provider and the buyer sit down to map the road ahead, including potentially unexpected costs. This exercise helps the first understand its client’s needs and requirements, technical capabilities, and the second to comprehend the situation’s scale.

2. 3. Our partners at Oracle NetSuite always recommend budgeting for at least one percent of the

organization’s operating budget.4. 5. Using your people to staff the ERP implementation project team is cost-effective if they have

the necessary knowledge and skills. If not, you’ll have to consider training costs. 6. 7. Logistics for on-premises implementations require infrastructure and maintenance costs. Cloud

deployment skips some of these ordinary expenses, typically as the solution provider manages the infrastructure.

Myth 1: It’s All About The Price

Myth 2: ERP Implementation Is Expensive

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Not necessarily. When a company decides to invest in ERP software, vendors can help in the implementation process. There are different types of vendors. The best will be the one that meets your specific business needs and creates a customized strategy to maximize your investment value. Your business resource planning and management needs will determine which type of service provider is adequate. There are critical differences between them.

An ERP developer is the original equipment manufacturer (OEM). It is also known as a platform provider, software developer, or maker, whether the software is installed on-premise or cloud-based. Some providers offer implementation directly as an added-value service, while others outsource it to a third party through a business partnership.

An implementation partner, consultant, or implementer is a third-party integrator or facilitator known as an ERP implementation consultant. Some sell ERP software, as resellers or merchants, and implementation services, while others only provide the second service. Their role is often to facilitate the integration with the ERP, generally, in alliance with the developer. It reduces customer acquisition costs, gaining quick wins in market share, and developing reliable and repeatable deployment processes, our partner Oracle NetSuite says.

Myth 3: Better To Do It With The Original Manufacturer

What Is An Original ERP Developer?

What Is An ERP Implementation Partner?

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Myth 4: It’s Impossible To Know How Much Deployment Will CostFalse. Granted, it’s impossible to list every single expense because the process should be customized. However, it is possible to break down the key factors that will influence costs and help you get a rough estimate. These factors are indispensable and will affect deployment, no matter what. Here’s a list of crucial fixed costs and variables. You can also download it as a spreadsheet to use as a road map to structure your budget.

Initial costs are lower for cloud ERP systems because they comprise software requirements and connectivity to the system. Meanwhile, the ERP provider hosts and maintains the organization’s IT infrastructure, minimizing demands on time and resources.

On-premises solutions require large upfront and ongoing costs for purchasing and managing the perpetual license fee. Also, there are added costs related to maintaining the necessary hardware, servers, and facilities, and additional personnel.

LICENSING

CLOUD-BASED

ON-PREMISE

fIXeD CoSTS

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GENERAL

VaRIaBLe CoSTS

The industry your company belongs in, as some sectors are heavy ERP users compared with others.

Wholesale distribution, retail, and manufacturing industries have the highest percentage of employees using an ERP system, Software Path’s 2019 report.

Size of your business and the number of employees that will use an ERP.

Company goals and strategy for which you’re installing an ERP, whether it’s to optimize operations or increase production.

The integration with legacy systems, especially if these are outdated or on-premise.

In case of the first -time implementing an ERP or replacing an existing system with an upgrade or a different program altogether.

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This plan should include: These highly-technical factors typically comprehend:

The initial cost of configurationCosts of standard modulesCosts of customized functionalitiesData migrationConfigurationInstallationCoding and testingGoing liveNumber of usersCoding and testing

PrototypingSoftware add-insExtra applicationsAdditional configurationsUpgrades (on-premise or legacy ERP)Going live deploymentPost-implementation evaluation and technical supportGuidance and counseling

False. To plan and implement, you need a dedicated team. It could be expert managers from your ERP vendor or implementation consultant, your IT employees, people from other departments, a mix. Everyone should have a specific role in every part of the process. In this regard, change management is crucial. No matter who makes your ERP implementation team, they need to handle rejection and other issues that arise when the system changes.If the budget allows it, include someone on your team who is solely dedicated to managing change.

Myth 5: Anyone In IT Can Do It

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SPECIFIC

Planning

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Myth 6: Any ERP Consultant Will Do ItFalse. It is true that many ERP system integrators in the US have the necessary expertise. But, not all of them have the right fit for your business. There are plenty of renowned independent NetSuite vendors, system integrators, advisory firms, and technology consulting providers in the United States. They draw on their deep expertise to help businesses integrate successfully with this cloud-based ERP system across multiple business processes and functions. We reviewed NetSuite’s Alliance Partner Program of consultants with a global or country reach. From this list we selected our top four implementers in the US of this software.

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It is the most significant, widely held false belief. The main reason behind any rollout process gone wrong is the lack of planning. And it’s a shared responsibility.A lousy plan (or no plan at all) is the main reason why ERP implementation fails in any business. Regardless if you’ve hired the best vendor in the industry, be that the original manufacturer or a consultant.

Any right ERP implementation process needs to prepare for foreseen and unexpected stages and costs. However, it’s not always the case. Why? In my years of experience, I’ve seen it all. Here are my Top 4 Reasons:

Myth 7: Any Failure Is The Vendor’s Fault

The ERP vendor does not audit critical management issues nor provides a clear project management plan.

The client ignores/does not communicate ongoing resource

management issues or bad practices.

The client does not understand the full scope and extent of the

endeavor.

There are different expectations across stakeholders and business

areas that prevent from structuring a complete plan.

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Big no, no! The success of your ERP implementation process depends on what processes and operations your business needs the ERP to integrate. Furthermore, some ERP developers or implementers could offer to modify the original software programming to accommodate your business needs at no charge or an additional cost.

Myth 8: Customization Is Just A Feature

When a plan is missing, what comes next is a series of unfortunate mistakes and failures. I’ve listed the most common here from general to specific and not in order of importance, as they will emerge with different levels of severity depending on your needs for ERP deployment.

You Automate A Process That’s Bad From The BeginningYou Choose a Bad Time And Rush ThingsYou Spend MoreYour Staff Resists ChangeYour ERP Team Underperforms

You Lose Valuable DataNot Enough Testing and Compatibility IssuesYour Connectivity CollapsesIT Infrastructure FailsNo One Takes Ownership For Mistakes Or Omissions

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These are common myths and misconceptions that prevent businesses from making the right decision in ERP implementation.

The vendor’s experience and expertise in implementing an ERP solution in a particular industry is a key differentiator.

Some ERP developers and implementers will offer assistance to deploy the software in a business as part of the licensing fee. Meanwhile, others will charge extra.

Good ERP implementation planning includes essential and expendable factors and costs, depending on the company size and requirements.

Poor planning boycotts any chance of a successful ERP implementation process.

A faulted or failed deployment leads to financial losses and loss of credibility among company leaders and workers.

A fair ERP implementation process requires the right consultant or partner. This is decision that as much planning as budgeting the software deployment itself.

Your ERP implementation provider should deliver an end-to-end implementation plan as part of its contract.

8 Key takeaways from this guide

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