1. define clear transformation goals.
Your company has almost certainly developed a corporate strategy and has already positioned itself on the topic of digitalization. If you want to use the introduction of an ERP system to further digitally transform your company, the first step will therefore be to align the existing approaches to digitization with the corporate strategy and to define the transformation goals for the introduction of the ERP system.
These will differ depending on the application, for example in material requirements planning, production planning, merchandise management or accounting. Further investigations, such as an opportunity assessment of new technologies or an analysis of new business models, may be useful at this point.
A benefit analysis of the digitization approaches is always essential. Typical questions here include:
- Which divisions, locations and departments will benefit most from the switch to digital solutions?
- Which business processes can be easily automated?
If you answer these questions honestly, you will avoid costly mistakes and the change process coming to nothing. At the end of this step, there should be clarity regarding the strategic direction of the ERP implementation.
2. Describe the business requirements.
The second step is to describe the general business requirements on the basis of the defined objectives for the ERP implementation. Analyses are also helpful at this point, for example to better describe the desired change (actual/target). Important requirement criteria here include flexibility, scalability and productivity, but also security - an issue that many companies still underestimate, despite ransomware, industrial espionage and other forms of cybercrime.
Of course, requirements for completely new processes and business models are also described in this step. Innovation and creativity are particularly in demand here. Methods such as design thinking can be used to structure the working method.
In any case, given the complexity, you should involve both internal and external experts in the coordination process when discussing the requirements.
3. Describe the business processes in detail.
The general business requirements are outlined in this step as an end-to-end business process and described in more detail. A complete picture of the company's business and business processes is helpful as a starting point, for example in the form of a process house. Each business requirement can then be located in the process house and analysed and modelled "from the customer - to the customer".
The discussion at the process house level may in turn result in new or expanded requirements for digitalization. Incidentally, a look at market trends can also be helpful here. "IoT", "bots", "AI" and "big data" are all too often little more than buzzwords. But behind them are solutions that have real added value if you know how to use them. You can get an overview of current trends, for example, via the current Gartner trends.
In any case, you should also include these requirements in a specification sheet. From the description of your business requirements and your business processes, you can derive the functions that the new ERP solution should have. You record these functions in a specification sheet, which you use to search for providers.
4. Take stock of the ERP and IT architecture.
After the question of what should be optimized or automated has been answered with the description of the business requirements and business processes, the next step involves the question of how the implementation should be implemented using information technology.
The first step is to take stock of the current ERP and application or software landscape (ERP/IT architecture). The affected legacy ERP and IT systems are identified from the transformation goals and business requirements (specifications). The analysis not only focuses on ERP, but also includes all systems that support the end-to-end process.
In addition, two further strategic directions need to be clarified: the implementation strategy and the operating model. The implementation strategy involves deciding whether a greenfield or brownfield strategy is more appropriate, while the operating model involves deciding between a cloud solution, an on-premises operation or a hybrid approach.
At this point, the solution approaches have been described sufficiently on the basis of the requirements definition to calculate the business case. In a final step, possible and sensible providers of suitable platforms or target systems are evaluated. The evaluation is based on functional, technical and financial criteria.
5. Implement the ERP system.
If the project is economically viable and the introduction of the new ERP system will benefit your company, the implementation of the new ERP system can begin.
An ERP implementation is generally carried out using a phased project approach. The individual planning steps are determined both by the selected ERP target system and its subsystems as well as by the implementation strategy and the subsequent operating model.
A project phase model could look like this, for example:
- Feasibility study (description of the vision, evaluation of feasibility, drawing up the roadmap ...)
- Preparation (concretization, planning, supplier selection ..)
- Implementation (design, build, introduction ...)
In detail, phases one and two are planned and realized according to the waterfall model. Phase three, on the other hand, is often implemented using an agile project approach.
6. Prepare the ERP rollout.
A successful ERP rollout supports the standardization of business processes within a company group and thus contributes to cost reduction in business, but also in IT. To this end, the templates (processes to be used globally) must be defined in terms of core (mandatory processes) and common (optional processes) as early as the planning phase of an ERP implementation. Of course, there will also be solutions for legally prescribed processes or dedicated customer requirements (local processes), but these are not part of the template.
The company location at which the pilot is to take place and the locations at which the template is to be rolled out in which order or in parallel must also be worked out during the planning phase. In any case, the rollouts should be forced according to the principle "fit-to-standard" and not "fit-gap".
7. Drive IT professionalization.
The pilot implementation is now planned and the rollouts have been agreed with the locations involved. All members of the project team are trained and highly motivated. And the management is united behind the implementation project. The real operation of the new ERP solution can now also be designed with regard to the IT service processes and the IT organization.
The following IT processes usually need to be clarified:
- Incident Management (How to deal with errors?)
- Change Management and Release Management (How are changes managed?)
- Demand and Project Portfolio Management (Which general requirements exist and which projects should be prioritized?).
The use of the IT framework COBIT ("Control Objectives for Information and Related Technology"), which is internationally recognized and offers guidance for IT governance and the revision of IT processes with its description of best practices, is helpful here.
In addition, possibilities for agile collaboration models in the areas of development and IT operations (DevOps) should be examined more closely.
After clarifying the IT service processes (process organization), the IT organization (organizational structure) should also be analysed in terms of efficiency and compliance and redesigned if necessary. Here, too, there are many design options, especially in globally organized companies. One example is the establishment of IT service centers in best cost countries.
