An ERP implementation life cycle is the eight-step process of deploying enterprise resource planning (ERP) software, from planning through go-live and beyond. The typical implementation cycle is six-to-12 months, but don’t think it’s all about software.
One question that always comes up very early in the process when considering an ERP implementation is “How long will it take?” While there is no right answer to that question—ERP implementations proceed at their own pace—the process can be outlined by way of an ERP timeline or ERP life cycle. Just for perspective, the life cycle ERP implementation can take anywhere from a few months to several years. The majority range from six-to-12 months from kick-off (project planned and funded, team organized and ready to go, ERP technology and ERP system software delivered—if appropriate—and installed) to a live system in full operation.
However long the life cycle ERP implementation takes, the result is the use of cloud-based ERP technology that makes end users’ jobs easier, efficient, and effective. And advanced understanding of the life cycle phases gives you a head start on experiencing a successful ERP implementation.
The 8 phases of the ERP implementation life cycle
It’s important that each phase of an ERP implementation is fully completed before moving on to the next one. Because the entire organization will be affected by this decision, it needs to be done the right way at the right time.
- Planning and organization: We’re not counting this phase as part of the time or the cycle ERP life it takes to implement the system as it all occurs before the start of spending money or real physical activity. Nevertheless, a team can be assembled, and a decent plan developed in a matter of a few weeks for a motivated company. More typically, the planning stage might last up to six months or more.
- System selection: ERP selection can be a challenging endeavor given its importance to the project and the vast array of choices. From requirements definition and early market surveys through determining the “short list”, gathering proposals, holding demonstrations, final selection and negotiation, this systems life cycle phase typically consumes anywhere from 3-to-6 months.
- Installation: Sometimes there is a lead time for delivery of hardware and software, installation of infrastructure components like networking facilities and data collection/display devices, and installation of software that could be anywhere from several days to several weeks or more. Cloud-based ERP may have little or no installation lead time and no software installation requirements.
- Data conversion and loading: Once the ERP technology and ERP system software is ready, data must be entered and/or moved into the system’s database. This includes “basic records” like customer, vendor and item master files, bills of material, production facilities and routings, general ledger chart of accounts, and the like. Just before going live, active transactional data is converted, or transactional activity is transitioned, into the new ERP system software. Some of this activity can be completed in parallel with other tasks like training and validation. IT resources and consultants/contractors can primarily accomplish some of this activity, as well. While a significant amount of time and effort is required, this requirement will not add significantly to the implementation timeline.
- User training and procedure development: This is arguably the most important part of ERP implementations; procedure, development life cycle (and documentation), and user training should take up the majority of the timeline. These requirements consume considerable time and effort from operational employees (actual future users of the system) who are also expected to do their existing jobs at the same time. The duration of this phase depends on the size and complexity of the ERP system software being implemented (number of modules or functional areas involved, number of users, how different the new procedures will be from existing procedures), and how much time users can dedicate to the implementation each day or week. Some companies bring in temporary help, but these outside resources should be devoted to maintaining old procedures rather than working on the full life cycle ERP implementation per se.
- Testing and validation: IT resources will be heavily involved in this task, working with the users to compare and examine both basic records and transactional data to verify that the data is exactly as it should be (and at least as accurate as in the incumbent system) and that the new ERP system software is producing the expected results. Testing and validation occurs over an extended period as each functional area loads data and starts processing (test) transactions by the users during training and procedure development. This is not necessarily parallel operation; in most cases, it is more of a “pilot” testing situation. Testing and validation do not add much to the timeline explicitly but must be considered in planning the duration of the training and procedure development process.
- Cut-over and “go live”: Going live can be instantaneous (sometimes called a ‘big bang’ approach), phased in piece-by-piece, or parallel operation where users are expected to keep the old system and the new system in operation simultaneously for a specified period of time (typically one or two accounting periods).
- Follow-through and project completion: Implementation is not complete once the new system is ‘live’ and the old system is turned off. Users and technical support resources must continue to validate and verify proper operation; user training should continue to enable a more extensive use of what the ERP system software has to offer and expand the benefits of the system.
The ongoing improvements and feedback are critical to sustaining the value, use, and quality of the cloud ERP investment.
ERP implementations pave the way to continued success
As your company grows and changes, as markets evolve, as people come and go and work their way up through the company structure, as technology continues to offer new challenges and opportunities, your ERP system will change and so will your use of the system. This is the definition of digital transformation. It’s an ongoing journey that transforms your business, over and over again.
Clive Coffee, a leader in the luxury home espresso market, is excited to be on their transformational journey with Acumatica by their side. They replaced QuickBooks and their other legacy business management systems with Acumatica’s cloud ERP software in 2020, and CFO Amanda Datte says in the company’s Acumatica customer success story, “The world is your oyster in terms of possibilities for efficiency and having seamless operations. We feel like we are prepared by using Acumatica for whatever the market has to offer. It’s going to be a big part of our company now and into the future, and we’re very excited to continue growing that.”
Be sure to keep the user community involved and informed so that your new ERP system will continue to provide the data management support you need for continued success.
ERP implementation is a necessary first step but is only just that—a first step. Contact our Acumatica team as you begin to move forward and let us collaborate with your team through every step (or phase) of the way.