An ERP implementation is a major project, requiring businesses to invest large amounts of time and resources to ensure the new software will represent a good ROI.
So, it’s natural that you’ll have plenty of questions about the process – after all, the consequences of wrongly estimating the go-live date, for example, could have serious repercussions for your company.
In this blog, we answer some of the top FAQs about implementing an ERP system:
- How much does it cost to implement an ERP system?
- What are the risks of ERP implementation?
- What are the steps to ERP implementation?
- What are the different approaches to ERP implementation?
- How long does ERP implementation typically take?
- How do I ensure my ERP implementation project is a success?
1. How much does it cost to implement an ERP system?
Unfortunately, ERP software isn’t cheap and prices vary depending on:
- Level of customisation – lots of these can lead to costs adding up quickly. Focus on only adding the features you need
- Number of licences needed
- If the solution is on-premise or cloud
- Hardware – an on-premise deployment requires data servers and hardware infrastructure to host your ERP system
- Number of modules required (including any add-ons)
- Training – some vendors might offer basic training services free of charge during implementation. But others will offer them at an additional cost, especially if the training is being done on-site
All of this means small to medium sized businesses can expect to pay anywhere between £53,363.63 ($75,000) and £533,878.90 ($750,000) for implementation. Prices for larger businesses range from £711,713.38 ($1 million) to £7,120,000 ($10 million).
If you think your business can’t afford a large up-front implement cost, consider choosing a cloud deployment. They don’t require hardware installation and may not offer as many customisations.
But ERP implementation is about more than just the cost…
For starters, it helps add value to your business by ensuring the accurate traceability of every ingredient through processing, packaging, warehousing, transportation and storage at the end retailer.
This means you can not only make sure your operations are efficient, but improve productivity, reduce waste and ultimately, increase profits.
An industry-specific solution such as Aptean Food and Beverage ERP can:
- Offer top quality, resource efficient production and distribution
- Help you stay in tune with changing customer demands by providing profitable product innovation
- Streamline end-to-end regulatory and food safety compliance, reducing the chances of product recalls
- Boost supply chain efficiency and transparency, allowing you to track your products in real-time
- Help hit your waste reduction goals by promoting robust demand planning
- Provide the flexibility to source raw materials and ingredients at optimal conditions
You can read more into the benefits here.
2. What are the risks of ERP implementation?
ERP implementation involves not just technology, but people as well. Common challenges include:
Project management
ERP implementation projects consist of multiple phases (e.g. discovery and planning, design, testing, deployment, etc). Strong project management capabilities, which include setting realistic time frames and expectations, are vital for success.
Data integration
A key advantage of having an ERP system is that it provides one version of the truth for everyone inside an organisation.
But first, you need to move your data from multiple older systems into your new ERP database. This can be an arduous process if information is spread far and wide across your business (think buried in spreadsheets, held on disparate systems or perhaps even on paper).
A well-planned data migration will help keep your ERP implementation project on time and on budget. Plus, it’s an opportunity to remove obsolete or redundant data that might be lurking in your legacy systems.
Change management
ERP implementation projects usually involve some adjustments to business processes and changes to how your employees work on a daily basis. This can present challenges, so get buy-in from your employees right from the very beginning of the implementation process.
Some ways you could do this include:
- Making sure your employees understand they’re not going to replaced by robots or automation
- Getting your employees’ input from the very beginning - during the planning stage, as well as input from your managers
- Keeping your team involved and informed of the project’s progress – this will help your team remain engaged with the project
Cost overruns
ERP projects can run over budget once implementation has begun as a result of companies underestimating the amount of work required.
To avoid this, factor in:
- Level of customisation
- System integrations – the easier your systems can integrate with each other, the less work there is for you. Modern ERPs like Microsoft Dynamics 365 are designed to integrate seamlessly with other business systems (e.g. CRM, commerce, etc) in the Microsoft stack
- Training costs (as mentioned earlier, some basic training may be free but you might need additional training hours alongside this)
3. What are the steps to ERP implementation?
Your steps to a successful ERP implementation should look like:
- Identify your goals and objectives – what business goals will an ERP system help you achieve? How will your ERP system align with your overall business strategy?
- Choose capable leaders to drive the project and its associated objectives – they should have the right expertise and experience to keep your employees motivated and engaged
- Find the right ERP system – a one-size-fits-all approach isn’t enough to deal with the complexities of food products, so you must consider your business needs
- Plan a clear data migration strategy – clean up your data and transfer only the most important information
- Configure the system – a good vendor will perform due diligence and spend time reviewing your requirements before implementation to make the process as smooth as possible
- Test the system – never go live before performing proper system and user acceptance testing. This will help you see how successfully your new system is performing and identify and fix any potential snags
- Ensure every employee receives the same level of training – regardless of how long they’ve been in the company or how much experience they have in the industry. The same level of training means everyone knows what best practices to follow and will be less likely to take shortcuts
- Go live!
But don’t make the mistake of thinking that your ERP implementation journey is now done and dusted. For it to be truly successful, you need to continuously work on it.
You need to:
- Ensure your system is properly maintained (and updated) when needed
- Deal with any kind of glitches/problems quickly and effectively so you can maximise system uptime
- Provide your teams with refresher training sessions to keep productivity high
4. What are the different approaches to ERP implementation?
The four most common approaches are:
- Single step method – all users move at the same time
- Phased rollout – deployment of features, tools and components are done over an extended period
- Parallel adoption – legacy systems are kept in parallel with the new ERP for a specific length of time
- Hybrid – a combination of the strategies mentioned above are applied. For example, you might switch on core ERP modules using a single step method, then roll out other modules in phases to specific departments
5. How long does ERP implementation typically take?
There’s no straightforward answer to this question, I’m afraid – it really depends on your business. It can take anywhere from a couple of months to a couple of years. Implementation time depends on:
- Number of desired modules
- Available resources
- Deployment locations
- Customisation/data conversion
- Number of users
- Type of dashboard capabilities required e.g. are there custom reports that need to be configured within the ERP system
6. How do I ensure my ERP implementation project is a success?
Firstly, you need to have clearly defined processes. If not, the implementation team will fail to consider these aspects of your business when mapping out your system. This means that during the validation stage, leaders will find users aren’t performing tasks as they expected, resulting in modifications being made to system and lengthening the project time.
Secondly, those designated a role in the project need to be held accountable for completing the tasks they’ve been assigned on time. Without this, implementation will inevitably take longer than expected.
And lastly, your business must be careful when choosing customisations. The chances are the software won’t completely fit your business out of the box, but you should only include customisations that are needed to meet your most important objectives. You can leave any other customisations until after your ERP has been fully implemented.
Alternatively, take the pressure off your in-house team and outsource your ERP implementation project to a digital transformation agency who specialise in the food industry. That way, you can gain access to high quality resources and mitigate the risk of any unforeseen complications or delays to your project.
No more one-size-fits-all approach to ERP systems
Every business is different. So, when you think about, taking a one-size-fits-all approach to solutions doesn’t really suit anyone that well.
That’s why as a food business, we strongly insist that your focus should be on implementing appropriate food industry ERP software. Our guide lays out the key differences in functionalities of a generic ERP system in comparison to a food-specific alternative.
Download it below.
