Moving to the cloud is essential for staying competitive and ensuring long-term growth. Choosing a cloud-based enterprise resource planning (ERP) system is a compelling choice – and it should be. The potential benefits abound. Unfortunately, most cloud ERP projects tend to overrun the projected timeline and budget and often fail to achieve the planned objectives.
To make the move to the cloud, many companies look to system integration partners who understand the implementation journey. Sadly, some integration firms fail to do what is needed to fully understand their clients’ processes and ultimately sell them work that may or may not suit the needs of the business.
Here are the key considerations for a successful cloud ERP project.
- Align stakeholders and leadership. This is one of those situations in which lip service does not work. The team undertaking the transformation needs the blessing of leaders and senior executives and buy-in and alignment from all key stakeholders in IT and related business groups. While the specific work of moving to the cloud will only involve the business process owners and project stakeholders, having the top-down/bottom-up approach will help mitigate risks, provide transparency and increase accountability at all levels.
- Create a strong implementation strategy. Prior to project kickoff, create an approved business case and project charter to establish a high-level implementation plan that includes project introduction, objectives, schedule, approach, timeline, organization structure that identifies key stakeholders, governance, key assumptions and dependencies. If working with an implementation partner, request that it brings its proven tools, accelerators and industry-specific practices to expedite how it can improve business processes and lessen the workload of gathering user stories and requirements. Once the project has started, have a plan for project communication for the entire organization and entry and exit criteria for each phase or testing cycle of the project. Determine how you will manage project risks, requirements and quality. A pre-defined strategy will ease coordination with the software provider and other third-party systems, ensuring the smooth start of testing cycles. Document how you are going to handle data security, privacy, controls and governance upfront with all implementation partners and software vendors.
- Lay out your plan for project governance. Guard railing your transformation is key to a successful project implementation. Make sure your project charter document includes a structured and well-thought-out plan for project governance that will be heeded throughout the lifecycle of the implementation. Projects can be long and phased out over multiple years. Setting up governance early will allow your team to make quicker decisions that are in line with the organization’s overall objectives.
- Prepare your resources. Assign resources as early as possible to reduce the potential risk of project delays and failures. A strong and experienced project manager who has tested the waters beforehand is necessary to steer the ship at every phase of the plan. Internal resources also play a vital role, as they will be the ones working with the implementation partner team to ensure all the business requirements are met, tested thoroughly across workstreams and signed off. The ERP software account management team comes in handy when escalating support tickets during the testing cycles and upgrades.
- Think through a testing and release management strategy. Testing is important at every stage. Multiple conference room pilots or sprints are recommended. Results from the user acceptance testing (UAT) cycle will determine if your team is ready to go ahead with the business processes driven by the new cloud ERP. Leverage or modify pre-built test scenarios, test cases and reliable tools based on the requirements or user stories. This will help drive each test case to either success or failure by process and IT leads. Cloud software providers roll out new functionality every three to six months through release or upgrade cycles. This process is new for companies, as it was non-existent in the world of on-premises traditional ERP software. Many times, companies fail to realize the importance of thoroughly testing these mandatory software upgrades, which can impact core business applications. Piggyback testing onto the transformation project post go-live to help smooth out intake of software releases with minimal business disruption.
- Proactively manage change and communication. ERP transformation projects impact every employee. It is natural for some employees to resist change and for some to drive positive change. Execution of a change management strategy and timely communication plan can help relieve the anxiety for those who are resistant. Identify change champions who can motivate the user base and recognize their efforts in the transformation journey. Conduct frequent town halls, regional meetings and regular program updates to address concerns and lead employees through the change curve.
ISG helps companies evaluate and select their ERP vendors and integrators in a competitive manner and assist in the move to cloud. We’d be glad like to have a no-strings-attached, unbiased conversation to discuss how we can help you on this critical path to success. Contact us to find out how we can help.
About the author
Chintan Mehta is a Principal Consultant at ISG, who is part of Cloud ERP and HR Business Systems practice and has extensive experience in Cloud ERP technology. His competencies include, but are not limited to, efficiently understanding the core processes of the client, and working with the client's business teams in multiple workstreams to identify operational excellence. He is highly driven and passionate with strong communication abilities and motivated by producing results others deem impossible.