How to start the implementation of ERP

In the last article I talked about What is the ERP system, and also about when the implementation of this software system will bring real benefits, and what to look for when choosing an ERP. And now I want to talk about how to get practical benefits from the ERP-system. And for this software product must be implemented.

I already wrote about the implementation of software products in the series “Implementation of a software product. Features of the business consultant. " And many of the recommendations in this series of articles can also be applied when implementing ERP. But still this system is designed for medium and large businesses, and therefore its introduction has certain features from among those that I did not disclose in previous articles on mainly small and medium businesses. Another important feature of ERP is a multifunctional, complex system with very broad functionality, and this fact must also be taken into account when implementing.

The most important question that arises on the eve of the introduction of any software system is “where to start”? If you know how and where to begin the implementation, and you will start the work correctly, most likely, the process will pass without unnecessary complications, alterations and conflicts. And the result will meet business expectations.

I will also try to tell you about how to conduct an ERP system implementation project in the following articles. And now I want to talk about the most important - the beginning of implementation.

Different approaches to implementation

There are several approaches to the implementation of ERP-systems that I have seen in someone else’s performance and / or applied it myself. Each of them has its pros and cons, some kind of "pitfalls" and advantages.

In principle, all approaches to the implementation of ERP are also relevant for any complex systems, for example, 1C UPP, 1C ERP, SAP Bussines ONE, ODOO, etc. Let's talk about them in detail.

Preparation of technical specifications

ERP-system is a very technological product. And therefore, both developers and businessmen very often have the temptation to plan for the implementation to the maximum even before the work begins. It would seem that everything is logical. With this approach, it is assumed that the technological software system should be as algorithmized as possible. And the implementation process can and should be approached from the point of view of algorithmization and the mathematical model.

How it is implemented:

1. A volume specification is created in which all processes, including the smallest ones, are thought out and described to the maximum.
2. Under the terms of reference creates a calendar work plan.

It may take months to compile a similar technical assignment. I personally saw a specialist compile the terms of reference for implementing ERP within six months. During this period, he regularly traveled to the site, delved into all the nuances and entered them into the document.

From this approach, the benefits are, first of all, the developers:

• Document Terms of Reference will be expensive. Much time-consuming work is being done. And customers usually agree on the high price of a technical task without any questions.
• Developers receive detailed instructions on which to work. And in case of unsuccessful decisions that are available in the signed TK, the alterations will be paid separately.

The downside of the approach lies in its volume and complexity. It is impossible to create a comprehensive technical task in which all modules and documents will be provided, all nuances of future work. The system is multifunctional, and any changes in one module may entail the need to make changes in another.

Similarly, with errors in the preparation of the technical task: any wrong decisions in one module may entail many changes in others. For example, a business process could be misunderstood, and then during the implementation it turns out that some of the documentation and reference books are not needed, but completely different ones are required. Too much information, too much complexity of the system - as a result, it is impossible to lay all the nuances initially and to foresee all possible errors.

In my practice, there was a case when I came to the enterprise to discuss the introduction of a new software product (I was the project manager), and I was directly told by business representatives: “Enough with the technical tasks. We already have these documents - more than necessary. ” And indeed, they showed voluminous document folders, solutions of which were never implemented.

"Partial" implementation

In this case, make a list of the most significant business areas and modules for working with them. On their basis, they constitute a kind of implementation plan, which is the basis for starting work.

In this case, the specification is also available. As well as the calendar plan for the variant of work, where volumetric TK is taken as a basis. But here the technical task is not so comprehensive, it is possible to create own technical tasks for different stages of work. Those. The main document in this case is the Work Execution Plan.

For example:

As the first stage of implementation, we select the Finance and Movement of Goods area. This site is very important for any company. We deal with the peculiarities of financial movements in an organization, we study the storage and sale of goods. On the basis of this we compile the TOR for automation in the ERP of the selected area. And we implement the necessary functionality for this site.

At the next stage, we choose another direction, for example, production. And we also work with this direction plus we take into account the work carried out (and possible modifications) in the already finished modules related to finance and products.

The main advantage of this method is realism. To cover everything at once is extremely difficult. Implementing in stages is much easier, with errors that are usually allowed less. And the results of the work are already visible in the implementation process. I myself often choose this approach.

Cons - an increase in time, which the customer can consider as delaying. In case of partial implementation, the deadlines for work may be delayed both for objective reasons and for various reasons related to financing, human factors, etc. In addition, if a business executive seeks to get everything at once, he may also not be satisfied with the lack of accurate implementation data (when completed, what the exact amount will be, etc.).

This method of operation is very cautious, and most often takes more time than with other implementation options. So, if at the first approach (drawing up the TZ) all terms and amounts are calculated in advance, before the work begins, then all preliminary figures here are approximate. And technical tasks for different stages are compiled during the implementation process.

Also, in the first method, work on the automation of work of different departments can be conducted in parallel. The client will see the automation of accounting, sales, and warehouse, and production. Here work is carried out stage by stage. And the units are connected to the ERP also in turn.

"Agile" approach

In this case, implementation work begins immediately without any preparatory stage. It would seem that this is unacceptable, ERP-systems are too complex to implement without first studying the features of the business and the preparation of documentation. However, in practice, I saw a similar job.

Some developers even in the case of ERP-systems operate on the principle of "begin, and then we shall understand." According to this approach, a general implementation plan is created in advance, which is divided into smaller parts as necessary.

Most often, this method of work is practiced by sellers of “boxed” software products. The reason is that they receive profits from the sale of the “box” in any case, and the implementation for them is only an accompanying service.

The main advantage of this method - the work on implementation begins immediately after the decision is made. Without long preparation. That is what attracts businessmen. For example, it was decided - to automate the sales department - immediately set to work. We decided - it is necessary to transfer the remnants - they are immediately transferred.

In principle, successful implementation on such a principle is also quite possible. But it is very difficult and success will require a very high level of professionalism of the manager, as well as considerable experience in implementing such projects. And even in this case, professionals more often choose other paths. Just because they allow to reduce the number of errors and overlays, the influence of the human factor. As a result, options for work on the TZ or implementation in parts allow you to get the desired result with a smaller number of overlays and rework.

Cons - the lack of planning of integrated implementation. Here, problems arise for practically the same reasons as when drawing up a comprehensive TOR: ERP is a complex, complex software product, and errors in the implementation of one module can affect the operation of another module. But if in the first case such problems arise because of an attempt to foresee too much in advance, here it is due to the lack of planning. Those. During the implementation, the specialists solve the immediate tasks, without thinking that at the next stage they will need data and documents from the current module to organize the work of another department.

Another disadvantage is that with this approach, the involvement of company employees in the implementation process is much lower than with any of the above. This adversely affects the determination of employees to take part in testing and transition to a new system, and also provokes sabotage of using new tools.

"Little by little, but all at once"

Another approach to the implementation of ERP I personally call “Little by little, but all at once.” This option may well be a successful and convenient solution. I personally used it more than once. And if, with partial implementation, one or two modules are taken into operation, they are fully customized, and only then they start working on other modules, then in this case the work is also done gradually, then there is no such clear limitation - only this module and no others.

With this approach, the first thing is also drawn up a project plan. In this regard, the main stages are not modules (one, then another, etc.), but some types of work that can affect all modules at the same time or selectively some of them. At the same time, approximate terms and cost are indicated for each stage.

In the most general case, such a plan is as follows:

1. Development of technical specifications.
2. Execution of works according to the technical specifications ... This item can be detailed, the execution of works is then divided into several stages.
3. Testing the system.
4. Commissioning.
5. Training.
6. Completion (handover) of the project.

A similar plan is drawn up and separately for each module, which allows us to specify the cost of each stage of work for the customer as much as possible, as well as to determine the most accurate possible deadlines. In this case, the customer must specify the possibility in the implementation process, in case of need, to change some types of planned work by others.

Such a method is more convenient and more realistic than drawing up a technical task, since the total TK for the entire project will require 2-3 months of work or even more, and the resulting document with all the details will be very difficult for the customer to study.

Here the customer sees a plan with deadlines and amounts for each stage. And technical tasks for each stage of work are created separately, they are small and do not require significant time-consuming. It is also desirable to call each of the documents in an understandable way. For example, “Accounting and Finance” or “Sales Department”.

Advantages of this approach:

• The customer immediately sees the entire project as a whole. With the most accurate timing and cost, as far as possible before the introduction.
• The contractor clearly defines the budget for each stage and issues an invoice for payment. In this case, the amount of the invoice does not cause any questions, which allows you to work productively, without being distracted by the justification of the invoice or counting the number of hours spent on the fact.

Cons of the approach:

• The customer must very carefully select the contractor so that the project manager at the proper level understands the implementation features of each module. Otherwise, the calculations in the plan will not be accurate enough. The budget may unexpectedly increase, the terms stretch, i.e. The main benefits of the approach will be lost.
• The contractor will require a significant number of highly qualified personnel to meet deadlines and engage in parallel with different modules. Those. a small team will not be able to implement this approach.

An important feature of planning: When calculating the budget, regardless of your experience and the accuracy of the assessment, you should “lay” an additional amount in case of unforeseen situations. The optimal amount of such an amount is 30% of the cost of the planned work. This can be called the agreed planned deviation of the project cost. These tools may be required in the event of any difficulties - organizing data exchange with a program that does not support the existing API, refining basic reference books, difficulties in transferring data, implementing functions necessary for the work that for one reason or another failed to foresee and .d

These 30% are taken into account in the budget, but are paid to the contractor only when necessary. If you were able to meet the basic figures of the budget without a “reserve” during the project, great! The customer will be grateful, and a satisfied customer will include both new orders and the best advertising on word of mouth (recommendations to friends and acquaintances).

If you still need to use the reserve, it is very important to correctly and clearly explain what kind of work this money was required. It is necessary to include this amount in the budget in order to avoid unpleasant situations when the budget increases and the customer does not have such an item of expenses.

What modules to start with?

The number of modules that ERP systems can offer often raises questions, where to start, because there are so many opportunities, as they say, “the eyes are spreading.” I recommend starting with the most critical areas for the company’s work and related modules:

1. Finance and settlement. (Do not confuse with budgeting - this module can and should be implemented later; it relates to planning, and not to the current critical work).
2. The movement of inventory (TMC): storage, sale, receipt. It is very important that the inventories are taken into account correctly, before the transfer of residues is usually carried out an inventory, then - carry the remnants, after which work is carried out only in the new system.
3. Accounting. The introduction of the accounting module or the organization of data exchange with the accounting system. The state does not forgive anything, and any violation, regardless of the intent, is punished. That is why accounting and tax accounting is also a system critical for the operation of any company.

Sometimes I hear objections that a company may have its own nuances, for example, due to high staff turnover, HR is the most critical. In fact, most likely, there is some kind of automation of HR work in the company at the time of the start of ERP implementation. And no matter how critical the work of this division is for business, for some time it will be possible to manage personnel in that system. And if in the process certain errors are revealed, it will be a minus, but not the most critical for the existence of the company.

Also, the project department or marketing for some time will be able to work in the usual way and keep records autonomously in the system that they used before.

At the same time, strict accounting and control of the movement of basic values ​​(financial and material), as well as the absence of errors in accounting and tax accounting are those “pillars” without which no company can exist.

I hope that the material on how to start the implementation of ERP, and what methods of working with this system are practiced, was useful to you. In the following publications, I will talk about my personal experience in implementing ERP, share information about errors that should be avoided, and what to look for in the implementation process and how best to build this work to make the transition to ERP as efficient as possible.