Switching to an enterprise resource planning (ERP) system can be transformational for any business, no matter what industry you operate in. Many companies see instant benefits after implementing an ERP solution, like significantly reduced overhead, improved productivity, better margins, and the ability to reach growth and revenue goals.
There are even companies, like KB Wholesalers, who were able to see positive cultural, operational, and financial ROI within the first two weeks of replacing QuickBooks with Microsoft Dynamics 365 Business Central.
On the flip side, there are many cautionary tales of ERP projects gone wrong. According to Gartner, the failure rate has bounced between 55% and 75% over the years and we have firsthand experience of it. In fact, to Gartner, 55-75% of ERP projects fail completely or wind up missing their aimed objectives.
At Clients First, we’ve done our fair share of ERP rescue missions over our 20+ years (but who’s counting) in the ERP consulting, implementation, and service business. A reoccurring pattern in salvage stories is finding critical pieces of the implementation strategy and preparation process missing.
All ERP project implementations start with internal planning, but project failure is a likely outcome if that effort doesn’t go deep enough. A short list of general objectives doesn’t count as a comprehensive ERP project plan, and vague, wishy-washy goals won’t get you to the finish line successfully.
Without thorough requirements planning, a detailed implementation plan that aligns with your goals, and a defined deployment strategy, your ERP project is on a path for failure and will most likely go over budget, out of scope, and not meet your deadlines.
To avoid mistakes, conflicts, and delays, you need to prepare for all aspects of an ERP project; and that starts with understanding your implementation strategy options.
One of the critical early decisions in implementation planning is deciding what ERP software deployment strategy will work best for your business. Although you don’t need to choose a strategy before talking to a software partner, it’s helpful to understand the most popular and more widely accepted approaches in advance so you can make the most of those initial conversations.
In this blog, you will learn about the 4 most commonly used deployment and implementation strategies for mid-to-large scale ERP projects. For each one, we’ll cover the pros and cons, security considerations, and what types of businesses each strategy works well for so you can begin to think about what method will fit your organization.
As you start gathering requirements and researching ERP solutions and options, it’s important to get familiar with the overall implementation process.
ERPs are intricate solutions that require process mapping, optimization, system integration, user training, and more. Ultimately, these multi-faceted phases are why you need an experienced partner to guide you through the steps.
Each of the 4 implementation strategies described below are valid approaches to making the transition to a new ERP software or significant upgrade.
Like the birth of the universe, this is an all-at-once implementation strategy. One day your team is consolidating transactions in QuickBooks and standalone spreadsheets; the next, they are posting journal entries in Microsoft Dynamics 365 Business Central or SAP Business One. In this approach, your ERP software partner is responsible for helping you develop a detailed plan driving to a specific launch day. Everything goes live all at once, and your team dives in headfirst.
Big bang deployment strategies are often best suited to smaller organizations with single or limited locations and few employees. It’s risky for a large and complex enterprise to try an all-at-once corporation-wide software launch; there are too many variables, locations, and employees that you cannot control.
A big bang approach has low security risks. Since you won’t be running legacy systems side-by-side, there are fewer vulnerabilities between APIs, and the amount of time your systems may be vulnerable should be minimal. You can perform an IT Security Risk Assessment beforehand to identify any risks.
Staging your ERP software implementation project over weeks or months can make the transition seamless, minimize customer impact, and ensure any glitches are worked out before starting the next phase.
There are 4 ways that projects may be phased: over a period of time, by software module, business unit, or location. Following this approach, your team would transition into working fully in the new system, but there is usually some overlap of duplicating work in both systems before the old one is fully abandoned.
Phased ERP implementations are at low risk for catastrophic failure and should eliminate or reduce the possibility of downtime. They’re a good option for larger businesses that want to minimize customer impact. A phased rollout is also a great option if you have specific bottlenecks that need to be addressed ASAP; you can prioritize those in your phase planning.
Phasing your ERP implementation project does have some extra security factors to consider. Because you’ll be running both systems, like QuickBooks and your new ERP, there’s a slightly higher possibility for vulnerabilities with API interactions. Those vulnerabilities or loopholes exist for longer and will require protection. There’s also an increased risk for data integrity with staff duplicating work in two systems. Your IT team and software partner should have a policy for system vulnerabilities.
A parallel ERP implementation project rollout is when you have both systems fully deployed simultaneously for a pre-determined amount of time. That means employees would duplicate all work in both systems to start. This approach is the lowest risk for customer impact and downtime, as the legacy systems are still fully functional and available if or when glitches or errors appear in the new system. Staff also have plenty of time to get used to the new system, with the comfort that they can still revert to the old system if something goes wrong.
Parallel deployment implementation works best for companies with critical functions that must operate 24/7 without downtime. It is also well suited for companies going through mergers or acquisitions where each new entity may be using different systems than other recent acquisitions.
Security risks are very low for a parallel ERP rollout. Both systems will operate at total capacity with full security measures. Since the systems will have minimal integrations, there should be no vulnerable access points. You can keep running your regular security and ransomware education programs, with additions for security features in the new system.
A hybrid deployment is just what it sounds like: picking and choosing the different elements of other strategies that work best for your business. For example, you may decide to rollout the accounting module of your ERP system before tackling HR. After that, you might phase in the rest of the company based on individual ERP modules or launch all other departments once you’ve ironed out all the kinks from the first two units.
Another option could be to launch several specific modules all at once and slowly phase in additional modules over time. The gray area is that most ERP deployment strategies will be a bit of a hybrid since your software partner will (and should) customize your deployment to suit your specific needs and goals.
The short answer is that a hybrid approach can suit any business. But it is likely to shine when you have complex and unique needs in a new or rapidly growing and changing industry. It can also be beneficial for businesses growing due to acquisition or merger, for similar reasons as a parallel strategy, with a little more room to control the budget.
With a hybrid deployment approach, your IT team and software partner must be aware of all possible technology and data risks for all systems and know how to mitigate each of them. It can require more planning for security during transition periods, but it’s not necessarily riskier than other strategies.
After you have taken the time to vet and select your ERP system, deciding on your ERP software implementation and deployment strategy should be done as a joint effort with your software partner. Things that factor into choosing your deployment strategy include:
Ultimately, the strategy you select will depend on your business, your people, and your goals for investing in a new ERP system. Although we have outlined some of the pros and cons of each strategy, the best way to succeed is with an experienced ERP software partner.
Your implementing partner will leverage a team of business process management software and infrastructure experts who take the time to understand your needs. They can share examples of what strategies have worked well for previous customers of similar size, industry, or product migrations, and they will know the questions to ask in order to suggest an ERP project strategy and approach that best matches your objectives.
Before any project can begin, the business technology experts at Clients First will figure out precisely what you need right now, and in the long-term, and balance that to find the most practical, scalable solution within your budget and schedule. If you take a look at our client stories, you’ll discover that we specialize in providing implementation plans, ensuring adoption success, and delivering ROI as quickly as possible.
As a trusted Microsoft Dynamics, SAP Business One, and Acumatica partner, our methodology is to deliver stable technology solutions that meet your unique needs and seamlessly grow with your business.
With over 20 years of helping companies successfully implement ERP software, Clients First can help you decide on the best software deployment approach for your business and develop an implementation plan that covers all the bases. Contact us today for a free ERP project assessment to get started!
Once you’ve selected an ERP for your business and defined your deployment strategy and implementation plan, a few extra things will ensure a successful ERP transition project. These 5 additional ideas can further reduce friction and smooth the path for ERP implementation success:
When it comes down to it, one of the key indicators for ERP implementation success is a comprehensive software rollout strategy. These plans or strategies can seem like overkill but skipping out on those details can be the difference between a smooth transition and a costly project failure. Read more about how important the last 10% of ERP planning is by downloading the whitepaper below.