10 Tips for a Successful ERP Transformation

Transformation programmes involving business-critical ERP systems can be expensive, lengthy and full of challenges. However, with careful planning and considered stewardship they can run smoothly, unlocking game-changing benefits for your organisation. So, what do you need to consider? ERP transformation expert Jeremy Payne shares his thoughts.

After years marked by a global pandemic, economic turmoil and political instability, it’s perhaps understandable that companies have been reluctant to invest in their ERP systems. Businesses are now starting to act, driven by new AI-shaped functionalities, regulatory changes (such as new EU e-invoicing requirements) as well as the big issue with those of you on a SAP ECC platform – support is ending in 2027. So where should you start?

1. Carry out a functionality assessment. 

The first step is to decide whether you need an upgrade or a completely new system. That will depend on how successful your current ERP is. Start by carrying out a thorough assessment of what you’ve got, where the gaps are and what you need from a new system. 

What you need relates to where you’re going. Look at your five-year strategy. If you’re expanding, you’ll need a scalable platform that makes it easy to add companies. It may be that you have some inefficient processes or non-standard ways of working, so a new or upgraded ERP should be aiming to rectify those, generating savings and efficiencies. 

2. Conduct a market assessment. 

Most organisations will know their ERP market and know what is needed and what is possible. Get familiar with what’s out there. How do those systems fit with all your requirements? The request for proposal stage is really important. You can’t just leave it to IT. You need to be clear on what you need cross-functionally and then ask the right questions. The key here is getting the buy-in from all stakeholders and taking them on the journey right through to scoring and selection. 

Have a shortlist of about three or four vendors and do a detailed assessment of the pros and cons aligned to your strategic requirements and, of course, your budget and timelines. Don’t go into this thinking it can be done quickly. 

3. Ask the right questions. 

Get your shortlisted vendors to demonstrate their products. Approach it critically and go beyond the demo. Don’t get sold early on and do not necessarily select the vendor with the slickest presentation. You have to invest the time to properly score and interrogate the product – ask for clarifications and further insights. Get under the skin of the product and make sure the business is involved and not just a handful of willing IT people. 

What will you need to get ready for this before you start?

4. Treat this as an organisational change-management programme. 

The companies who get this right are those with a clear business case including firm costings and timelines and understand that change will need to happen. They know what’s involved from a target operating model perspective so factor this into your change plan. 

Importantly, successful projects have exec team members sponsoring implementation in their area of the business. You have to treat this as an organisational change, not just an IT one, so your cross-functional change team is important. Consider the impact that the new or upgraded system might have on people and processes. What will you need to get ready for this before you start? Keep to standard processes – don’t reconfigure as this will bite you after go-live with subsequent upgrades. 

5. Resource adequately. 

To give the programme the attention it deserves, you’ll need experienced people who are fully dedicated to the project. As a result you may need to temporarily backfill positions so others can fully commit. 

6. Be realistic with your planning. 

Planning is key in terms of cost and building in enough time for all the various phases. It’s important to have solid stage gates throughout the programme that are properly closed out before moving on. The worst projects are those that have a loose plan and financials and it just drifts. These projects end up training people after go-live and lose precious business benefit.  

7. Clean your data. 

One of the most common mistakes I see is companies migrating bad data from their current system to the new one. This is a chance to rationalise and cleanse your data, as well as introduce new data governance that keeps all your data right. A lot of ERPs get in a mess because they haven’t got data controls in place.  

8. Communicate what change means. 

The most successful projects are those where the change team brings employees on a journey. Not many of us like change, so you have to communicate why it’s happening and improvements they’ll see. Change networks and engagement plans will help get people onboard.  

9. Test robustly. 

Timelines can slip, as testing progresses it’s often this part of the programme that gets compressed and gets pushed to the right on the plan, but it can’t be an afterthought or be rushed. Build your own test team and make sure the system is doing everything it promised, identifying where things need to be improved and retested. Treat your test team as an internal assurance function.  

10. Use a seasoned interim to help. 

Having someone in from the start who’s been through this before will ensure you’re asking the right questions, choosing the right system and have realistic plans to implement it successfully. ERP transformation is simply too big and important to not do it properly.