Home Blog ERP Implementation Life Cycle — What Is It?

ERP Implementation Life Cycle — What Is It?

Todd Kuhns | June 22, 2021

The ERP implementation life cycle is the eight-step process of deploying enterprise resource planning (ERP) software, from the planning stage through go-live and beyond. A typical ERP implementation life cycle lasts for six months to a year, but don’t think it’s all about software.

ERP Implementation Life Cycle

In this article:

What is an ERP system?
What does “ERP implementation” mean?
What is the ERP implementation life cycle?
ERP Implementation Best Practices: Project Management
The risks of not implementing an ERP solution
How Acumatica can help


What is an ERP system?

An enterprise resource planning (ERP) system is the “glue that binds together the different computer systems for a large organization,” according to Investopedia. In other words, an ERP solution connects different systems, acting as a central repository through which all a company’s data can be accessed. But, before you can enjoy this “single source of truth,” your business must undergo an ERP implementation.


What does “ERP implementation” mean?

An ERP implementation is the process of installing your chosen ERP software, moving your business data over to the new system, configuring your user information and customized processes, and training your employees to use the software. That may sound like a lot, but these components of an ERP implementation don’t happen all at once. They’re accomplished in a logically progressing way, across what is called the ERP implementation life cycle.


What is the ERP implementation life cycle?

As with any large project, it’s imperative that you take an ERP implementation one step at a time. Though the implementation of an ERP system looks slightly different for each company, every ERP implementation life cycle is made up of eight standard stages—all of which are critical to the project’s success. The timeframe for completing these stages also differs from company to company and will depend on your personal decisions about how quickly you want to move forward. For perspective, though, most ERP implementations are completed, from planning to having a fully operational system, in six months to one year.

Below, we’ll discuss in detail the phases of the ERP implementation life cycle. Each step should be fully completed before moving on to the next. This ensures that all parts of the process are built on firm foundations.

Step 1: Planning and Organization

This step, which begins before you’ve even chosen the ERP system that best fits your business, has several sub-steps. You’ll be:

Step 2: System Selection

You and your implementation team will research available ERP options and determine which one will best suit your company’s needs. At the same time, you’ll be:

  • Getting organizational buy-in. Just as you convinced the leadership team, you’ll now need to convince your team members that the new ERP technology will benefit them and the company. Some employees may think that the ERP system implementation is not a good idea because it will change their daily workflows. Address these concerns immediately—highlighting the benefits the ERP system will bring to everyone involved.
  • Defining your requirements. Document your business processes and any functional gaps in your current system. Look for processes you can improve and determine how the new ERP system should function to make those improvements a reality.
  • Developing a project plan with the ERP implementation team and your employees. The plan should outline assumptions, projected costs, project milestones, and tangible goals.
  • Choosing a partner. The ERP vendor is as important as the software. You must partner with a vendor you can trust. Don’t let yourself be sweet-talked by a predatory partner.
  • Choosing your ERP implementation process type (Express, Standard, or Advanced).

Step 3: Installation

What happens in this step will depend on the ERP deployment option you chose during Step 1. If you chose to deploy your new ERP solution as a cloud-based instance, you will have no software installation requirements and little to no installation lead time. If you chose a private-cloud or hybrid model, there will be a window of days to weeks during which hardware and software will be delivered to your premises, and the software itself, as well as any necessary infrastructure components, will be installed.

Step 4: Data Migration

Once your chosen ERP system has been installed, company data must be filtered (to remove any incorrect or redundant data) and then entered and/or moved into the new solution’s database. This includes “basic records” like customer, vendor, and item master files; bills of material; production facilities and routing information; general ledger charts of accounts; and so on. Just before Go Live, active transactional data will be converted and/or transactional activity will be transitioned into the new software.

Note: This is the only step that may bleed over into the next stages. Some data migration may be completed in parallel with training, testing, and validation—e.g., testing the system to verify that all legacy data has been moved and is accessible, etc.

Step 5: Training

Employees you designate as Subject Matter Experts (members of the IT team, the finance team, etc.) should receive specialized training during this part of the ERP implementation process, so they can teach others to use the ERP software and be the “go-to” people for questions after Go Live. All other users should be taught how to perform their own roles within the new system, too.

Step 6: Testing and Validation

This step involves creating and applying a detailed testing plan, which will measure user acceptance and help you determine if the ERP system fits your needs out-of-the-box or if modifications should be made. You should also employ your IT resources here, validating whether the new software is working as expected and making sure that all company data (migrated into the system in Step 4) is complete and as accurate as it was in your previous software.

Step 7: Go Live

When you are ready to roll out the implementation of the ERP system across your company, it’s time to choose which approach best suits your context. There are three main options.

  • Big Bang: The new ERP system is activated and used exclusively going forward.
  • Phased: The new ERP system is activated in phases to minimize disruptions in operations.
  • Parallel: Both the legacy system and the new ERP system run at the same time.

Step 8: Ongoing Improvements and Feedback

The ERP implementation process doesn’t end at Go Live. From there, as your employees use the software and as your business evolves over time, you’ll gather user feedback and make ongoing improvements and adjustments to the system. This is why it is very important to choose an ERP solution that is able to scale with you, according to your fluctuating needs.

 

ERP Implementation Best Practices: Project Management

ERP implementation processes should concentrate on project management as the key to success. In her book on the subject, Adrienne Watt defines project management as “the application of knowledge, skills, tools, and techniques” to manage activities and meet project objectives. Project management is all about comparing the progress made against the original plan and thereby updating the plan. This is where your ERP implementation team comes in—to guide the project from beginning to end.

As I mentioned above, each member of the ERP implementation team will be given a specific role. Among others, those roles include:

  • An Executive Sponsor, who will oversee the project in a part-time capacity. The Executive Sponsor (sometimes called the Champion) outlines the expectations for the ERP implementation and determines what resources are needed to make the project a success. This person should also be available to help answer the inevitable questions or alleviate possible concerns that may arise during the implementation.
  • A Project Leader, who is knowledgeable about your business, has previous management experience, and can communicate clearly. The Project Leader represents the team and the project to upper management and is responsible for achieving the implementation objectives.

The remaining Team Members will be assigned their detailed tasks and responsibilities (e.g., Technical Lead, Subject Matter Experts) during the planning process. The Team Members should be chosen based on their levels of expertise and knowledge relating to the task.

Deciding to upgrade your existing ERP system software or to implement a new ERP system is a major undertaking. As such, the ERP implementation team you put together should consist of people, drawn from across the organization, who will be most affected by the new technology—the users. A smooth transition from an old system to a new one is never guaranteed, but the people who will gain the most from it will also be the most motivated to make sure the project succeeds. During the implementation process, they will be anticipating the results that the new system will provide, and they’ll want to get the benefits of those results as quickly as possible. Again, organizational buy-in matters.

 

The risks of not implementing an ERP solution

Today’s digital economy poses many risks for companies that do not implement ERP solutions. Some of these are:

  • Disconnected, disjointed data—meaning that your business can’t operate cohesively because no one has the same information.
  • Frustrated employees, whose productivity is hindered by that piecemeal data.
  • Difficult business growth/change due to expensive hardware/software purchases that just continue to stack up over time.
  • An inflexible interface that cannot connect your front-office, back-office, field, and remote employees.
  • Inefficiency and decreased profitability.
  • Security/compliance issues and extended downtime.
  • An overall inability to flex with the times.

However, an ERP system can alleviate all of these concerns. You can expect:

  • Streamlined operations.
  • Easy-to-use functionality.
  • A real-time view of your business anytime and anywhere on any device.
  • A secure platform that can easily adapt to your company’s ever-changing needs.

For an example of this, consider Acumatica customer PayWith.

PayWith chose Acumatica’s ERP system over SAP because they wanted a cloud-based platform that was agile, was cost-effective, and would scale with their as-yet undetermined business model. Once they chose Acumatica, their implementation project took only five months.

PayWith, which creates and manages mobile loyalty, rewards, and marketing programs for brick-and-mortar organizations, must settle thousands of daily transactions efficiently and accurately. Using Acumatica’s Financial Management Suite and Intercompany Accounting Module, PayWith has grown 50% year over year since implementing Acumatica.

Andrew Black, PayWith’s Vice President of Finance, says: “Our accountants started using [the system] right away, and then our dev team integrated it in just a few weeks. We didn’t need too much handholding because Acumatica is very intuitive. It follows common protocols in databases and accounting, so no matter which background you have, you can adapt to it very easily.”

PayWith’s smooth start and continuing growth is a testament to how important it is to correctly follow the ERP implementation stages we’ve talked about today. Their Acumatica customer success story provides further details.

 

How Acumatica can help

Whether you choose an Express, Standard, or Advanced ERP implementation for a cloud-based, private-cloud, or hybrid ERP instance, Acumatica has all the tools, resources, and methodology needed to implement your software successfully. If you’re planning an ERP implementation, and if you want it to be a rewarding process, contact us today or hear our customers talk about their successful ERP implementation journeys.

 

Blog Author

Senior Director of Professional Services, Acumatica

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