ERP System Implementation Plan Step by Step | Canada

You have selected your ideal ERP software to resolve your challenges, such as increased security risk, data loss, costly maintenance, or inefficient systems. But what next? You will go for ERP system implementation.

It is a complicated process and requires strategic planning. According to Gartner, 55% to 75% of projects fail to meet their intended objectives. For instance, you have chosen Dynamics 365 Business Central to fulfil your business requirements. A Microsoft Partner helps you implement your ideal ERP software.

To ensure seamless ERP implementation, we will explore the stages of its implementation, the advantages and challenges involved, methodologies, and costs for implementation.

What Do You Mean by ERP Implementation?

ERP system implementation is a process to install or incorporate your chosen ERP system. This includes integrating all the modules, such as finance, human resources, supply chain, manufacturing, and more. In addition, you need to migrate data from the old one to the new one, customize the solutions, and go live.

This seems too much. That's why ERP systems implementation doesn't happen at once. It is a step-by-step process to ensure seamless enterprise resource planning implementation.

Phases of ERP Implementation

Implementation of ERP system is a long process that requires a step-by-step method. Here are phases of ERP system implementation:

Planning and Discovery

Assemble a committed implementation ERP team and specify the project's goals and scope. The project's foundation is laid during this phase, which also guarantees that the ERP system and organizational objectives are in line.

ERP System Selection

Examine and select an ERP solution that fits the objectives and needs of the company. Scalability, vendor support, customization possibilities, and interoperability with current systems are all important factors to take into account while choosing a solution.

Design

Determine how the existing business processes will be included in the new system by mapping them out. This entails setting up the ERP software to satisfy certain business needs while causing the least amount of disturbance to current processes.

Development

Customize the system as needed and begin data migration from legacy systems. Data cleansing at this stage is vital to ensure the accuracy and reliability of the new system.

Testing

Conduct thorough testing to identify and resolve issues. This includes unit testing, system testing, and user acceptance testing to ensure the system functions as intended under real-world conditions.

Deployment

Roll out the ERP system to the entire organization. This can be done using a “big bang” ERP implementation method, where all modules go live simultaneously, or a phased approach. In this process, modules are implemented in stages to minimize risk.

Support and Maintenance

To guarantee continued performance and user acceptance, incorporate continuing assistance, instruction, and system updates. Adapting to evolving business needs and technological advancements requires constant improvement.

Benefits of ERP Implementation

There are several advantages of ERP implementation for your business. Below are them.

Improved Efficiency

Routine tasks can be automated to cut down on errors and manual labor. Remarkably, 66% of businesses say that ERP implementation make their process more efficient.

Cutting Expenses

62% of businesses say that ERP systems have cut their expenses. For instance, the process simplification feature lowers administrative and inventory management costs.

Enhanced Decision-Making

Real-time data access supports better strategic planning and responsiveness. Approximately 60% of organizations report that their enterprise resource planning implementation have improved decision-making.

Regulatory Compliance

ERP systems help maintain compliance with industry standards and regulations. Notably, 70% of companies reported better regulatory compliance after implementing an ERP system.

Scalability

ERP systems are appropriate for companies of all sizes since they are made to expand with the company.

Challenges During ERP System Implementation

ERP implementations offer several benefits, but it comes with several difficulties. Here are the challenges of implementing an ERP system:

High Rates of Failure

According to Gartner, between 50% and 75% of ERP system implementation programs fall short of their goals. This frequently happens as a result of poor planning, irrational expectations, or a misalignment of the ERP solution with corporate objectives.

Overspending on the Budget

Roughly 60% of ERP projects go over budget, and some go over budget by more than 50%. This may be the result of unforeseen adaptations or an underestimation of the project's complexity.

Extended Schedules

Implementing Microsoft ERP takes several month depending upon the solutions you want to implement. The duration might extend if you got into some trouble. Unexpected technological difficulties, lack of training, and opposition to change are some examples of the causes of delays.

Reluctance to Adjust

The resistance to change impacts user adoption, which 55% of businesses encounter while ERP implementation. Strong change management techniques are needed to address this, such as training, clear communication, and involving important stakeholders.

Issues with Data Migration

The process of moving data from old ERP systems to new ones can be prone to mistakes, duplication, and irregularities. It is crucial to have a thorough data migration plan and strict validation procedures.

Complexity of Customization

Excessive changes raise expenses and complicate the system, even while customization might improve alignment with company goals. The secret is to find a balance between standardization and customization.

Vendor Dependency

Over-reliance on the ERP vendor for support and updates can lead to challenges, especially if the vendor's services are costly or inconsistent.

ERP Implementation Methodologies

The effectiveness of deployment depends critically on the ERP implementation methodology chosen. Businesses must balance the benefits and drawbacks of each strategy:

Big Bang Approach

This method includes launching all ERP modules simultaneously. It ensures a quicker transition, but the risks are greater. Even small mistakes might disrupt many business processes. In order to reduce the likelihood of failures, companies need to make significant investments in pre-launch testing.

Phased Methodology

In this ERP implementation methods, all modules are implemented gradually using this approach. For example, a company may deploy its finance modules first, then its supply chain and human resources modules. Teams can adapt progressively thanks to this gradual integration, which also lowers risks. With more than 50% of ERP adoptions, it is the go-to alternative for businesses with intricate procedures.

Parallel Adoption

During this ERP implementation methods, the old and new systems operate simultaneously. Employees must administer two systems, which can be resource-intensive even if it guarantees continuity. Nonetheless, the overlap time gives users the opportunity to become acquainted with the new ERP while maintaining backup access to the old system.

Agile Methodology

The ERP system implementation process is divided into more manageable, smaller cycles by this iterative method. An ERP system functional component is delivered with each cycle. Agile's adaptability allows for changing business requirements and improves teamwork. Because it can react to feedback instantly, it is becoming more and more popular.

How Much Does It Cost to Implement an ERP System?

The financial implications of ERP implementation extend beyond initial investment. ERP implementation cost capitalization is essential to preventing unplanned costs:

Average User Cost: You need to pay the license costs for solutions like Dynamics BC. These solutions come on per-user licenses; overall cost will be calculated on the number of users using the solutions. However, factors like the deployment type (cloud vs. on-premises), necessary customizations, and system complexity can have a big impact on cost.

Hidden Costs: Businesses frequently undervalue the costs associated with system customization, data migration, and training. Studies show that over 65% of ERP projects experience cost overruns. If we do ERP implementation cost capitalization, it increases as much as 189% of the original estimate.

Cloud vs. On-Premises: Cloud ERP solutions often have lower upfront costs but incur recurring subscription fees. Conversely, on-premises solutions require significant initial investment in hardware and licensing but offer long-term ownership.

ROI Timeline: The average return on investment (ROI) for ERP systems is realized within 3.7 years. Proper change management, efficient training, and minimal customizations can shorten this timeframe.

Ensure Hassle-Free Implementation with Dynamics Square

Dynamics Square has been a trusted Microsoft Partner in Vancouver for 14+ years. We have served 350+ clients across the world and helped them to function effortlessly.

Our team of consultants are Microsoft-certified and have a deep understanding of various ERP systems. Whether you require Dynamics Business Central, Dynamics Finance, or more, our consultants are here to help you.

Reach out to us at +1 778 381 5388 or write us an email at info@dynamicssquare.ca to ensure seamless implementation.

People Also Ask:

Why implement an ERP?

Enterprise resource planning implementation enables you to streamline business operations, such as manufacturing, finance, and supply chain, by integrating ERP system for manufacturing and others into a single platform. It improves efficiency, enhances data accuracy, enables better decision-making with real-time insights, reduces operational costs, and facilitates scalability as businesses grow.

What Are the Stages of ERP Implementation?

Implementation is a long process that is done using a phased approach. Here is the list of phases of ERP implementation:

Planning: Define objectives, allocate resources, and establish timelines. Select an ERP system and Implementation partner.

Requirement Analysis: Identify business needs and map them to ERP functionalities.

System Design: Configure and customize the ERP system based on business processes.

Data Migration: Transfer existing data into the new system while ensuring accuracy and consistency.

Testing: Conduct functional and performance tests to ensure the system works as expected.

Training: Educate employees on how to use the ERP system effectively.

Deployment: Go live with the system, transitioning from legacy systems.

Support & Maintenance: Monitor system performance, resolve issues, and provide updates.

What does the ERP system mean?

An ERP system is software that centralizes and integrates core business processes into a unified platform. It enables seamless collaboration and real-time data sharing across departments, ensuring efficiency and informed decision-making. Examples of processes managed by ERP include accounting, inventory, procurement, and project management.

What are some examples of ERP systems?

There is a wide range of ERP systems available in the market. Here are some examples of ERP systems:

Microsoft Dynamics 365 Business Central: Ideal for small and medium-sized businesses.

SAP S/4HANA: Popular among large enterprises for advanced functionalities.

Oracle NetSuite: A cloud-based solution for growing businesses.

Odoo: Open-source ERP with modular features.

Infor CloudSuite: Industry-specific ERP solutions.

Epicor: Suited for manufacturing and distribution industries.

What is ERP vs. CRM?

ERP vs CRM, ERP helps you manage internal business operations such as finance, inventory, supply chain, and HR. It ensures process efficiency and operational integration. CRM concentrates on managing customer interactions, sales, marketing, and service activities to enhance customer relationships and drive revenue.

ERP is operational and back-office-focused, while CRM is customer-facing and front-office-focused. Many businesses use both systems in tandem for holistic management.