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Planning for ERP implementation

    If you’re planning for ERP implementation project, then there are two questions you need to answer before you start:

    • First, why are you undertaking this project?
    • Second, what are you hoping to achieve with the project?

    To answer these two important questions, and before you start your ERP project you have to have a plan, we will discuss in this article how to prepare and planning for ERP implementation project plan as follows.

    Planning for ERP implementation and transformation project steps:

    • Plans for diversification
    • Plans for organisational change
    • Plan for risk mitigation
    • Prepare a list of expected output and benefits

    What you need before planning for ERP implementation project

    Any systems investment should support your business strategy, so what you need to define on this phase is:

    • Where the business is going (Future expectations)?
    • Analysing the business growth profile over the next three to five years.
    • Define your business type of growth. Will it be organic growth at a similar rate to the current year, or is the rate likely to change due to external factors?
    • In the coming three to five years, Will the nature of products and services stay the same or change?
    • Are there any new acquisitions in progress, and how this will impact business scalability?
    • Is your business expanding into new locations?
    • Define your business ability to scale and support employees and customers in new locations.

    So, failing to answer the above questions and think ahead can lead to an inability to meet the business expansion needs, such as wrong applications selection and infrastructure, and increased IT running costs, also thinking ahead will help you to keep your investment by choosing the right ERP application for your business current and future requirements.

    Plans for diversification

    Product diversification is a strategy employed by a company to increase profitability and achieve higher sales volume from new products. Diversification can occur at the business level or at the corporate level.

    There are three types of diversification techniques:

    1. Concentric diversification

    Concentric diversification involves adding similar products or services to the existing business. For example, when a computer company that primarily produces desktop computers starts manufacturing laptops, it is pursuing a concentric diversification strategy.

    2. Horizontal diversification

    Horizontal diversification involves providing new and unrelated products or services to existing consumers. For example, a notebook manufacturer that enters the pen market is pursuing a horizontal diversification strategy.

    3. Conglomerate diversification

    Conglomerate diversification involves adding new products or services that are significantly unrelated and with no technological or commercial similarities. For example, if a computer company decides to produce notebooks, the company is pursuing a conglomerate diversification strategy.

    Plans for organisational change

    The change management implications of processes, centralised functions, or shared services need to be factored into the plan. Cost savings resulting from restructuring or improved performance may be a significant driver in their own, although in every organization, there will be other specific objectives, such as reducing costs, enabling more efficient business processes, and making better use of people’s time.

    Risk mitigation

    It’s all very well to think about where the business is going, but for most organisations, there are risks that may need to be addressed. The risks may include the risk of trade, the risk of reputational damage, or the risk of serious errors leading to financial losses. Typical risks include systems that are at the end of their life or running on on-premise infrastructure that is close to end of support, also the risk includes running business-critical processes on spreadsheets can lead to errors in process, data duplication, wrong reporting, and other list of risks. Poorly controlled business processes are another risk that many organisations face, where errors could be costly or damaging customers’ relationship.

    Prepare a list of expected output and benefits

    Following this point, we need to have a solid expectation of the output of ERP implementation project, to reach this point we need to turn our thoughts to what we are looking to achieve, let’s look at some of the business benefits of investing in and implementing new ERP systems. Start by identifying improvement opportunities and then identifying more details about the point of improvement. Ensure that every benefit or improvement is realistic, and the ERP system could help deliver a solution.

    Benefits may include strategic or high-level benefits, quantifiable benefits, unquantifiable benefits. It should be possible to create a list of benefits for each part of the business that’s potentially in implementation scope. This is an important step, as whoever is responsible for each area should document his expected benefits, then they will be able to deliver the benefits that have been documented. The benefits work doesn’t end at this point. Benefits realisation should be an ongoing element right through the ERP system selection, implementation, and beyond, regularly checking back to ensure the organisation is on track of the implementation.

    How we can help?

    iX Dev professional services, provide 360 consultation service for ERP system implementation, our consultants have 30 years of experience in enterprise systems successful implementations and systems automation, we apply several standard and worldwide proved methodologies like PRINCE2, TOGAF, AGILE, PRE, BPM etc. to ensure that ERP implementation is successful, on time, on budget and meets customers’ expectations.