We have spoken about this several times before but implementing an Enterprise Resource Planning (ERP) system is a significant undertaking that can transform a business’s operations. However, the complexity involved often leads to challenges that can derail the project. That is one of the reasons this undertaking should not be taken lightly and why we always recommend evaluating your existing system before embarking on a new ERP implementation.
If you decide to implement a new ERP solution, having experienced implementation consulting is invaluable. In this blog, we explain why.
Thinking about changing your ERP? We have a free System Selection Guide
What is ERP Implementation Consulting?
ERP implementation consulting involves engaging experts to guide a company through the process of deploying an ERP system. These consultants bring specialized knowledge to ensure the system aligns with the company’s processes and strategic goals.
The Importance of ERP Implementation Consulting
ERP implementations are notorious for their high failure rates. Studies reveal that only 30% of ERP projects are completed on time and within budget. According to ERP Focus, one of our favorite blogs, 54% of ERP systems exceed projected budget targets.
These are just a few examples because study after study shows the same data. ERP implementations are expensive, time-consuming, and disrupt businesses. These statistics underscore the critical need for expert guidance to navigate the complexities of ERP deployment.
“Selecting the consultants (and an implementation methodology) is as important as selecting the (ERP) package.” – Alexis Leon, ERP Demystified.
Who Provides ERP Implementation Consulting?
In most cases, the software vendor provides the ERP implementation consultants. They guide the business through their standard, “cookie-cutter” implementation process and “encourage” the business to adapt its process to the software.
However, more astute businesses also use independent implementation consultants. They typically have extensive experience with various ERP systems and possess deep insights into industry-specific challenges. Their role is to tailor the ERP solution to the business’s unique needs, ensuring a smooth transition. The main benefits of using independent consultants are:
| Aspect | Independent Consultants | Supplier Consultants |
| Objective Expertise | Provide unbiased recommendations tailored to your business needs, prioritizing your success. | Focus on promoting their product, which may lead to overlooking gaps or limitations. |
| Broader Industry Knowledge | Experienced across multiple ERP platforms and industries, offering innovative and well-rounded solutions. | Expertise limited to their specific ERP system, potentially restricting solutions. |
| Tailored Solution Alignment | Ensure the ERP system is configured to align with your unique business processes. | May prioritize standard configurations or pre-defined workflows that force adaptation to the software. |
| Comprehensive Project Oversight | Assist with the entire implementation lifecycle, including project management, risk assessment, change management, and post-go-live optimization. | Focus primarily on technical implementation, often overlooking broader project needs like change management or user adoption strategies. |
| Focus on Long-Term Success | Engagement extends to optimizing the system post-implementation and addressing evolving challenges. | Role often ends after go-live, leaving businesses to handle ongoing optimization independently. |
| Conflict of Interest Mitigation | Unbiased and not incentivized to upsell additional modules or customizations, ensuring cost-effective solutions. | Potentially incentivized to sell additional features or services, leading to unnecessary expenses. |
| Enhanced Negotiation Power | Provide insights to help you secure better terms and pricing during vendor negotiations. | Part of the vendor ecosystem, which may prevent advocacy for cost reductions or better terms. |
You cannot avoid having supplier consultants as they need to configure the software, but they don’t work for you. That’s why you need an independent consultant. By incorporating independent ERP implementation consultants, businesses can ensure a more holistic, tailored, and objective approach to their ERP projects, increasing the likelihood of long-term success and maximizing return on investment.
Main Steps in an ERP Implementation
Those of you who follow us will know there are two parts to implementing a new ERP. These are:
System Selection
These are all the steps involved in the ERP software selection process. This is where independent ERP implementation consulting is key. This resource will guide your business through the system selection process, increasing the likelihood that the business will select the right tool. As a reminder, we have a document that guides you through this process. Download it here.
In the meantime, these are the high-level steps:
Needs Assessment
Identifying business requirements and determining how the ERP system can meet them.
System Selection
Choosing an ERP solution that aligns with the company’s objectives and processes.
System Implementation
Initiation/Planning:
Developing a detailed implementation roadmap, including timelines and resource allocation.
Design
Configuration and Customization: Setting up the system to match business processes, which may involve custom development.
Testing
Conducting thorough tests to identify and resolve issues before full deployment.
Prepare Organization
Communication: The New System is coming soon.
Download our: “Change Communication Plan Template” for a comprehensive ERP communication plan.
Training: Educating employees on how to use the new system effectively.
Data Migration: Transferring existing data into the new ERP system, ensuring accuracy and integrity.
Go-Live/ Deployment
Rolling out the ERP system across the organization.
Post-Implementation Support:
Providing ongoing assistance to address any issues and optimize system performance.
This is nicely summarized in this video
Potential Pitfalls in ERP Implementation
Without proper management, several issues can arise during ERP implementation:
- Scope Creep: Expanding project scope without proper control can lead to delays and budget overruns.
- Inadequate Testing: Insufficient testing can result in system failures post-deployment.
- Poor Change Management: Failing to manage organizational change can lead to user resistance and low adoption rates.
- Data Issues: Inaccurate or incomplete data migration can compromise system integrity.
The Value of Bringing in Experts
As we explained above, engaging ERP implementation consultants mitigates these risks. Their expertise ensures that best practices are followed, potential issues are anticipated, and the system is configured to deliver maximum value. For instance, a 2023 survey found that:
Businesses that hired a software consultant for ERP implementation achieved a success rate of 85%
Case Study: A tale of 2 professional services firms
We worked with a firm that brought us in to assist as independent consultants to assist with their ERP implementation. We guided them through the process and helped them to identify the main obstacles and key risk areas. This helped the firm implement the ERP as part of a larger IT transformation program. There were challenges, but the entire program was delivered to the firm’s aggressive deadlines.
We also worked with another professional services business in the same industry, representing the ERP software supplier (as project managers). They chose not to bring in external ERP Implementation consulting and chose to rely on the supplier. The result was the project had several delays and cost double the original budget. The firm was also very reliant on the software consultant and continued to pay for her services many years after deploying the software. Conclusion
ERP implementation is a complex process fraught with potential pitfalls. Engaging experienced consultants can significantly enhance the likelihood of success, ensuring the system is delivered on time, within budget, and fully aligned with business objectives.
Engaging experts in ERP implementation consulting is a strategic move to ensure your project succeeds and delivers the desired business value.
FAQs
They guide the deployment of an ERP system, ensuring it aligns with business processes and goals.
Complexity, scope creep, data migration issues, and user resistance are common challenges.
They bring expertise, best practices, and objective perspectives to navigate challenges effectively.
Lack of proper planning, insufficient testing, and inadequate change management are typical causes.
Timelines vary but generally range from several months to a few years, depending on project scope.
