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Planning An Effective Cloud ERP Implementation

by Vinkal Kotangale - Sr. Consultant-SCM, Deloitte Consulting India June-2020

Planning An Effective Cloud ERP ImplementationToday, the business environment is rapidly changing, almost every Organization is moving to cloud ERP from its on-prem or legacy ERP system. Cloud ERP is simple to deploy, as it relies on internet, also Organizations need not to bear any additional server and other dependent costs. Thus, cloud ERP implementation is becoming a point of attraction for the organizations that are currently using on-prem ERP and aims to achieve costs reduction. It will also be favored by small and medium scale enterprises which failed to reap benefits of on-prem ERP system by not being able to implement the same due to its heavy cost. These organizations can now implement cloud ERP, considering its comparatively low implementation cost. In this article we will discuss how to plan for such cloud ERP Implementation. Following are the key areas to be considered and should be focused on during implementation:

  • Scope

Scope of the project should be clearly defined from day one itself and should be properly documented. Project scope is considered as the truth for defining all other project related activities including project timelines, project resource allocations etc. Hence clear and confirmed scope is the first and foremost critical requirement.

  • Approach

It is very important to decide the implementation approach which could be Big-Bang or Phase- Wise for different geographies. The deciding factors could be:

  • Logistics: Spread of the business across different geographies, different time zones.
  • Complexity of solution: Extensive dependency on inter-company movements, complex financial transactions and more.
  • Level of Acceptable Risk: Readiness of organization to take risk
  • Project Management: Project timelines, Project resource allocation and Budget allocated.
  • Requirement

Requirement gathering exercise is the again the most critical task in cloud ERP Implementation project as it could decide success or failure of the implementation. Organizations should identify correct set of participants (subject matter experts SMEs) for this exercise so that accurate requirements are captured. Also, the implementation partner should deploy different resources (ERP Consultants) for different Modules having relevant functional knowledge. Organization should identify the current pain areas due to existing ERP system and ensure that the same are being captured in the requirement list. Thus, business should make sure that all needs, wants and pain points are captured and evaluated accurately during requirement gathering sessions.

  • Data Management

A fundamental requirement for the effectiveness of ERP systems is the availability and timeliness of accurate data, thus Data Management is considered as one of the key success factors of cloud ERP Implementation Project. It has following aspects:

➢        Data Quality: Data accuracy is absolutely required for an ERP system to function properly. Hence, Organizations are expected to put-in their sincere efforts towards data cleaning activities which could be removing old items, old customers or old vendors etc. before data extraction commencement.

➢        Data Migration Strategy: Organizations are expected to define a detailed data migration strategy accommodating following considerations.

❖        Cut-off date for blackout period should be decided and communicated to users well in advance

❖        Business should be instructed to close the open transactions like open in-transit shipments, open work orders, open receipts, open invoices etc as much as possible before cut-off dates.

❖        Data extraction team from IT department should work with Business users in tandem to confirm the validity of the extracted data.

  • Testing

Testing is the most critical milestone of any ERP implementation project. Organizations should never schedule go-live without exhaustive and comprehensive testing. Organizations should identify correct set of participants for this exercise and they should always follow “What’s in it for me?” approach. After completing the module level testing thoroughly, it is expected from users to engage into end to end business processes testing to analyze cross functional impacts. Identify bugs in the system and categorize them based on impact analysis in order to work towards its effective resolution. Test cases should be comprehensive enough to cover all business processes and day to day task performed by users. Also, these should be lucid and self-explanatory. Additional test cases should be introduced and thoroughly tested at every Conference Room Pilot (CRP) testing to ensure all business flows will be covered which will in-turn boost the confidence of end-users.

  • Customization

Although solution for majority of the business processes can be modelled by using the out-of-box features of cloud ERP system, there could be a few requirements that needs redefining the existing business process or incorporate customizations. Customization is the process of fitting the chosen ERP software to the needs of a specific organization. Though there is a flexibility of customizing the cloud ERP system to fit organization’s requirement, it is always recommended to keep it minimum. Whenever customization is introduced, it is advised to add additional steps of validation while maintaining minimum human element involvement. Also, it is important to carry out detailed cross functional impact analysis of the introduced customization.

  • Project Management and Quality Assurance

Strong Project Management is one of the best instruments one can devise to achieve successful cloud ERP Implementation. Many research studies have identified this as one of the key critical success factor (CSFs). By establishing sound project governance framework one can ensure that project finishes on time, on budget, and delivers the expected business benefits. Thus, the Project Management must be highly disciplined for proper implementation of the cloud ERP, it should work continuously for identifying risks and placing plans for mitigation of the same. Feedback from key users and consultants of implementation partner should be obtained and analyzed at regular intervals. Project Management should always try to build a bridge between Executive management and the users involved in the cloud ERP Implementation Project. This will help in aligning all the stakeholders to achieve common organizational goal.

  • Communication

Communication has a major role to play in all the phases of cloud ERP Implementation Project, hence it is mandatory for organizations to define a proper communication plan. It helps to keep management updated on the progress of the project, it also helps users to understand the key decisions taken by the management as well as helps them to raise their concerns. Communication can take many forms-such as news bulletins to users, weekly meetings, status calls, email updates, audio-visuals, training documents, presentations, key decision documents (KDD) etc. Online collaborative tools like Google sheets, survey tools, share points etc should be extensively used for seeking feedbacks from all the users involved in the project. Organizations should develop their online repository for keeping all the project related documents at one place for easy access to all the users involved in cloud ERP Implementation Project.

Conclusion

Success of cloud ERP Implementation Project is not a matter of luck. By practicing above mentioned points along with other available best practices, the likelihood of success can be significantly increased.

 

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