ERP Implementation Archive

Tag Archive for: ERP Implementation

What characteristics should a project manager have?

Once you’ve selected an ERP system, it’s time for the implementation phase. To assemble the project team, you first need a project manager and key users. Project management plays a central role in the implementation of an ERP system. Therefore, you should not make a half-hearted decision about who will take on this role. A person who has all the essential qualities will have a positive effect on the progress and general mood of the team. This is essential for the success of the project. If, on the other hand, the choice falls on a person who is not well suited to the role, conflict is inevitable. The project drags on and costs can rise dramatically. But how do you find the right person for the job? Today’s article is about how you, as an entrepreneur, can make the right decision and what qualities a good project manager should have.

Project management and key users – who is responsible for what?

Have you ever planned or implemented an ERP project? Then you know that such a project can resemble a large construction site. No one knows exactly what the other person is doing and who is responsible for what. That’s why it’s a good idea to clearly define the two role profiles first – especially since the tasks overlap in some areas.

The project manager, with the following characteristics, oversees the project as a whole: he or she coordinates tasks and processes within the team, monitors the progress of the project, and regularly reports the current status to management. The project manager also makes technical decisions about implementation. Key users are responsible for a specific area, which is why large companies may have several key users. In small companies, however, there is usually only one person. Key users are the first point of contact for questions and act as a link between employees, management, and the ERP vendor. They also plan and execute the technical training of employees on the system after a successful implementation. Read more on how to recruit key users for your project.

What is the difference between a project manager and a key user?

The roles and characteristics of a project manager and a key user are very different, but there are similarities. Both try to increase the acceptance of the project by highlighting the positive aspects and trying to allay fears. The skills required are empathy and understanding. After all, whether the project is successful or not depends largely on the employees. If they reject the system and cooperation, it will fail sooner or later. The big difference between project management and key users lies in managing people. This is often underestimated because the project manager has to take on management responsibilities as well. For the duration of the project, the project manager is the supervisor of the key users. Compared to the key users, the project manager’s role is often perceived as more of a management task.

What characteristics does a good project manager need?

A project manager’s job is to lead the project and make it effective and successful. Of course, this comes with a lot of responsibility, and not everyone is cut out for the job. Finding the right manager who is up to the task can be quite difficult. Many business owners already feel overwhelmed and take what seems to be the easiest and quickest route – appointing a project manager based on their expertise or position in the company. Read on to find out why this is not always the best solution and what abilities and qualities to look for in a project manager.

Expertise

The requirements for a project manager have changed dramatically from the past. A few decades ago, project managers were seen as purely technical experts who solved technical problems. Expertise is certainly important, as a project manager should also be able to understand and evaluate technical issues. However, it is often overlooked that a project manager needs more qualities and skills than just technical know-how. Today, they have responsibility in all areas. They face many challenges: They not only manage, but also negotiate, coordinate, console, resolve conflicts, and constantly motivate their team.

Keeping an eye on the big picture

In times of stress, a project manager should be able to take a structured step back and look at the situation from the outside. Keeping an overview and not losing sight of the essentials is very important when implementing an ERP system. Many people are very good at certain things or are very detailed. These people may be indispensable to your business. But when it comes to coordinating the management of an ERP project, they are out of place. An employee from the IT department, for example, is not the right person for the job. It is often difficult for them to separate themselves from the technical level and to empathize with the necessary perspectives of other employees. But the rule here is that the exception proves the rule.

Leadership skills

The ability to manage people well is one of the most important qualities of a project manager. Managing people is a complex and responsible task. You can certainly read up on some useful tips to improve your own management style. But above all, you need the right personality – and this is not something that can be easily acquired or changed. It’s about earning the trust of your people by being honest and authentic.

What makes a good leader?

A project manager is the hub where all the important decisions, information and characters come together. Strong communication and social skills are therefore essential in a management position – at all levels. Above all, you need sensitivity and the right antennae to perceive and interpret your surroundings. For example, you need to be a good listener and be able to sense negative moods in the team, even if no one else is expressing them.

Soft skills – assertiveness vs. empathy

It often makes sense to leave project management to a member of the executive team, because that person has a lot of experience. In the past, however, this has often led to problems during implementation. The reason is simple: especially in larger companies, a manager is too far removed from day-to-day operations. Often, they don’t even interact with the ERP system – so how can they properly assess which functions make sense and are actually used on a daily basis?

A good feel for the day-to-day

Oft liegt es nahe, die Projektleitung einem Mitglied der Geschäftsführung zu überlassen, schließlich bringt diese Person viel Erfahrung mit. In der Umsetzung hat dies in der Vergangenheit allerdings häufig zu Problemen geführt. Der Grund hierfür ist recht einfach, gerade in größeren Unternehmen ist eine Führungskraft zu weit vom operativen Tagesgeschäft entfernt. Oft kommt diese gar nicht erst mit dem ERP-System in Berührung – wie sollte diese daher richtig einschätzen können, welche Funktionen Sinn ergeben und im Alltag tatsächlich genutzt werden?

ERP projects take time

Implementing an ERP project takes a lot of time. It is probably difficult for someone in a managerial position to find resources on top of their day-to-day responsibilities. But again, this is not set in stone and does not apply equally to all companies. In smaller companies, for example, this approach would be easier to implement. The characteristics that a good project manager should have are not directly related to their position in the company. Younger colleagues can also be an asset to the team. They often approach new tasks with a lot of energy, vision and enthusiasm, which in turn has a positive effect on the atmosphere in the team. The downside is that young people usually have little or no experience in leading a team. But again, no master has fallen from the sky. You grow with your responsibilities. And some things you learn only after you’ve fallen on your face a few times.

Conclusion

No project is ideal, and it is not always easy to find a person who has all the important qualities. Maintaining a balance between assertiveness and tactfulness is also a challenge. On the one hand, the project manager must be able to inspire, allay fears, and get people on board. On the other hand, they must be able to take action, pursue goals, and bring the project to a quick conclusion – even if that means not accommodating every individual request. In a project with many individuals, you can never satisfy everyone equally. Each of your team members has his or her own ideas, views, desires, and needs. However, if you cannot find a suitable colleague, it makes sense to divide the tasks among several people – for example, by separating technical and organizational tasks or by bringing in an external participant.

Would you like to learn more about project management and ERP implementation in your company or about the full range of TimeLine ERP functions? Send us a message using the contact form, write to [email protected] or contact our sales team at +49 212 230 35 200. We will be happy to advise you!

22. April 2024

Pros and cons of the most popular Enterprise Resource Planning models

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Implementing Enterprise Resource Planning (ERP) software usually requires a lot of resources and time, which is nothing new. This is not surprising, however, when you consider how closely the system is intertwined with your own processes. Organizing the project well in advance makes everyone’s job easier and helps avoid costly adjustments later on. This includes deciding on a process for integrating the new software. Even before the actual project begins, the customer and the ERP provider must ask themselves which approach will make the implementation the quickest and most efficient. There are two very contrasting Enterprise Resource Planning models that continue to enjoy great popularity – the waterfall method and the agile approach.

In the spirit of “old brooms sweep better”, most companies rely on the classic and proven waterfall method. Although more and more customers are interested in agile development methods, only a few are confident enough to implement the new ERP system using this concept. Many managers are still skeptical and unwilling to give up some of their control. This may raise some questions: What is the difference between these two approaches? Which one is better suited to my organization’s needs? This article will give you an overview of the two methods, their pros and cons, and hopefully make your decision a little easier.

The classic approach – the waterfall method

The waterfall approach is the typical Enterprise Resource Planning model. It has long been the standard, especially in the software industry. The first formal description of this model is attributed to Winston W. Royce. In his article “Managing the Development of large Software Systems”, published in 1970, he did not use the term “waterfall”, but made it clear even then that this method could be extended and was not suitable for every project. The waterfall method is characterized by a strictly linear project process. At the beginning, the course is defined by dividing the project into several phases. These phases are then consistently worked through in a predetermined order. Once a phase has been completed, the customer and vendor review and approve the results. Each completed phase initiates a new phase and is considered unchangeable; subsequent changes are generally not contemplated. Decisions cannot and should not be reversed.

There are several variations, but the basic waterfall ERP model consists of the following six steps:

Requirements Analysis: definition of intended functionality
Design: development of the software architecture
Implementation: development and integration of the software
Integration testing: finding and fixing bugs
Rollout: putting the system into operation
Support: making sure the customer has no problems with the product

The customer’s business objectives and requirements for the ERP system are set out in a requirement specification that defines how they will be implemented. The actual implementation varies from vendor to vendor.

Strengths of the waterfall method

The waterfall method is still very popular. Not without reason, as it provides clear and orderly structures, which is very important for some entrepreneurs. The implementation of ERP software is a major change, and planning and structure provide a little more security during this time and are therefore welcome. By the end of the preparation phase at the latest, everyone involved in the project will have a clear idea of what steps need to be taken before the actual launch, what stage of implementation you are at, and what lies ahead. Planning and calculating the budget and time required, especially for very large projects, is of course very precise.

Weaknesses of the waterfall model

However, the waterfall method also carries some risks that should not be underestimated, especially in the case of tricky and confusing ERP implementations. Ironically, the strictly linear approach often leads to a loss of control. The design effort for this method is usually very high, as each step must be planned in great detail. Since the phases are strictly separated from each other, you are tied to the predefined processes. This makes it very rigid and inflexible, making parallel work almost impossible.

The biggest weakness here is that mistakes or misunderstandings that occur at the beginning of the design phase only become apparent at the end of the implementation or, even worse, during functional testing. It is also possible that a use case is completely forgotten during the design phase. In this case, the ERP system will not take it into account. In both cases, this results in unplanned and costly additional work. On the other hand, due to a lack of communication, the vendor may implement unnecessary modules or functions that are never used in practice. In general, the limited communication in this method is often a reason for misunderstandings, as the customer and the ERP provider have different interpretations of the concept. The result: the customer is dissatisfied because the system does not meet his expectations. Obviously, this is a situation that should be avoided at all costs.

Agile development methods

Agile approaches were developed in response to the weaknesses of the waterfall method. One of the first variations of this method was Scrum. Scrum is a process model for project and product management, especially for agile software technology. The origin of this approach goes back to the article “The New New Product Development Game” in the Harvard Business Review in 1986. Among other things, Takeuchi and Nonaka emphasize the importance of self-organized teams in the entire development process. Today, this relatively new approach is mainly used in software development, but is also applied in many other fields.

According to this method, tasks are not implemented according to a linear plan, but in short implementation cycles called sprints. Goals are set at the beginning of each sprint. As the project progresses, the project team fully implements a work package, usually a functional requirement, in each cycle. This is then tested to produce an executable, presentable subsystem at the end of each cycle. This allows the customer to provide feedback at any time. Ideally, a cycle lasts two to four weeks. With each subsequent cycle, the project team and the user try to improve the requirements and gradually approach an optimal solution. This approach allows plenty of room for interaction, adjustments, and updates. This is especially helpful if the customer’s requirements for the software change during the implementation, or if other challenges arise.

The agile approach is as follows:

Sprint 1 (design, implementation, testing, documentation, evaluation)
Sprint 2 (design, implementation, testing, documentation, evaluation)
Sprint 3 (design, implementation, testing, documentation, evaluation)

Strengths of the agile approach

A key advantage of the agile approach is that it is flexible and practical in its implementation, with a clear focus on communication and customer satisfaction. The project team and the customer or future users of the system work closely together from the beginning. The users are involved in each cycle and see individual areas of the system in action at an early stage, as a working subsystem is created after each cycle. This means that the software can be put through its paces during the implementation phase.

Errors in the design are quickly detected, and the customer can quickly see whether the software meets his real expectations and requirements. It is also much easier to avoid misunderstandings. The project team can directly implement feedback from the customer and use the new knowledge to adapt the process if necessary. Above all, the agile approach prevents the project from ending in an expensive customization marathon. It also increases user acceptance because employees can influence the project through continuous involvement and thus identify more strongly with the system.

Weaknesses of the agile approach

Even though this method has more advantages than disadvantages, it is not suitable for every company. In order to implement an ERP system in an agile manner, management must give up some control, as the agile approach is not based on fixed project plans and schedules. In addition, some planning certainty is always lost, as it is never possible to say in advance exactly when which function will be ready and operational and what the expected outcome will be.

Agile vs. waterfall: key differences in ERP models

Both approaches have the same goal, but follow different procedures. Here are the main differences:

Waterfall method

Classic approach, long the standard in the ERP industry
Linear approach
The project is divided into phases, which are worked through one after the other
Project results are presented at the end
The process and concept of the project are defined at the beginning and are generally not changed
Once phases are completed, they are not changed
The deliverables are known and the scope is clearly defined
The customer has clear requirements that change little or not at all
The project has a relatively short duration
The customer wants to be minimally involved in the process

Advantages

High planning reliability
Budget, current status and next steps up to actual launch are known at all times
Planned timeframe is easier to meet due to clear and organized structures

Disadvantages

Relatively rigid and inflexible to change
Costly adjustments are often necessary because errors made during the design phase are not discovered until the end
High design effort
Each step must be planned in great detail

Agile approach

Alternative to Waterfall
Linear processes are replaced by cycles (called sprints).
In each cycle, a work package, usually a functional requirement, is fully implemented and tested to create an executable subsystem.
The project process is flexible.
Planning and design are not rigid, but evolve as the project progresses.
Partial results are adapted based on user feedback
The scope is rather unknown, the scope is variable
The project has a relatively long duration
Requirements are unclear and many adjustments are expected
Customer wants to be heavily involved in the process

Advantages

Flexible and very practical
Focus on communication and customer satisfaction
Joint learning process
Close collaboration between customer and ERP vendor
Fewer delays and rework
Faster detection of design flaws through testing after each cycle
Increased user acceptance because employees are constantly involved in the project and can influence the processes

Disadvantages

Managers have to give up some control
Some planning reliability is lost because it is never completely clear when which feature will be ready

Which Enterprise Resource Planning model is best for my needs?

Which method is best for you and your organization depends on many factors and cannot be answered per se. Unfortunately, there is no universal solution that works equally well for all organizations. The waterfall method is more often used in companies with hierarchical structures, where planning security, control and orderly structures are a priority. Customers who like to have an overview of the company’s workflows and processes are more likely to choose this method. These are often projects with constant requirements. Projects with many unpredictable factors that require flexible adjustments tend to be unsuitable for this method.

The following questions can help you decide which approach is right for you:

Can the goals be clearly defined in advance?
Does the customer have clear expectations?
Does the project team need a clear leadership structure?
Is there a deadline or clearly defined milestones?
Is the budget clearly defined?
Are no major changes expected during the course of the project?

If you answered “yes” to most of these questions, the waterfall method is probably better for you. Agile development methods, on the other hand, can be an approach if the customer does not yet have a precise idea of what exactly they want. This method is particularly interesting for companies where the project is likely to last a long time and where conditions, wishes or priorities are likely to change over time. Organizations often choose a combination of the two Enterprise Resource Planning models. These hybrid approaches combine elements of both. For example, you might want to create a long-term plan based on the waterfall approach, but without strictly separating the phases – a mix of planning certainty and flexibility.

In any case, it is worth taking a closer look at both methods, as they both have their pros and cons. It is best to spend some time researching and working with your ERP vendor to determine which model best suits your needs.

If you would like to learn more about the the different Enterprise Resource Planning models for your ERP implementation, or the full range of TimeLine ERP features, please send us a message using the contact form, write to [email protected], or contact our sales team at +49 212 230 35 200. We look forward to hearing from you and will be happy to advise you!

22. April 2024

Properly calculate and reduce ERP system costs

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How ERP software costs are broken down – and how you can save

More than ever, digitalization is forcing companies to restructure their processes and connect departments. A good solution for this is an Enterprise Resource Planning (ERP) system. Naturally, companies wonder how much ERP systems cost. The good news is that not all the costs of an ERP implementation are set in stone. There is a variable portion of ERP software costs that you can control. In this article, you will learn how ERP costs are made up, how to identify cost drivers, and tips for saving money during an ERP implementation.

What exactly does the cost of an ERP system consist of?

First of all, we should clarify how the cost of an ERP implementation is made up. If you know this and are aware of the factors that can have a negative impact on the cost of an ERP system, you will have more opportunities to influence its development. Depending on the scope of the processes to be covered, the price of the ERP system is made up of different factors. For example, which modules or how many workstations you need are taken into account. However, because pricing models vary from company to company, it is difficult to make general statements about the actual cost of an ERP system. In general, however, it can be said that the costs are made up of two areas:

ERP software license costs: Software license costs account for about 50 percent of the total ERP system cost. Unfortunately, these costs cannot be reduced and should always be budgeted in full.
ERP services costs: The other 50 percent of ERP costs are services. These are variable and therefore controllable. Services include customization, consulting and services, and training for key users and end users.

What are the ERP system costs for services?

How much of your budget is spent on customizing, consulting and training depends on how closely you work with the standard. Whether it is an ERP workshop, conceptual design, coordination meetings, programming, data transfer, reporting, or training, as a customer you have an impact on all services. Of course, you should not do without these services. Consulting, training, and technical customization are undoubtedly important to adapt the ERP system to your company’s needs and processes, and to familiarize your employees with the system.

How can you reduce ERP system costs?

With good preparation, you can significantly reduce the cost of ERP systems in the service sector. Your help is needed! Unfortunately, it is not always possible to completely avoid unwanted costs. Sometimes, even with an ERP workshop and specifications, certain items are difficult to estimate. These become apparent only in the course of the project. However, there are also cost drivers that can be avoided with good preparation.

5 Tips for lower ERP system costs

Tip 1: Have clear goals and specific requirements

When you decide to implement an ERP system, you probably have a rough idea of how it will improve your processes. However, many companies are very vague about their goals. They often want to implement everything that is possible, in the spirit of “every feature will come in handy someday”. The problem with this approach is that it is difficult to calculate the cost of ERP software.

If requirements are vaguely defined and problems are only scratched on the surface without questioning possible causes, the project is on shaky ground from the start. The result becomes apparent at the latest when the specifications are written. Then you have no choice but to work with what people want – and that can lead to delays and complications.

Therefore, you should formulate clear objectives and specific requirements at the outset, so that an ERP system is created that meets your needs – and your budget. This will enable the vendor to select the right ERP system, ensure a successful ERP implementation and avoid unnecessary additional costs.

Tip 2: Balance project management and departments

Another factor in high ERP software costs can be the behavior of individual departments combined with weak project management. Often, individual employees or departments have more freedom than others. They are used to pushing through their plans and making few compromises. Then every idea, no matter how small, has to be implemented – be it an evaluation, a list, or a request.

Add to this a project manager who just gives in and approves all requests, and you, as the decision maker, will soon find yourself with a long list of requests, needs and ideas from your employees – and a correspondingly high ERP system cost. To keep costs in check, you need strong project management that can sometimes reject employee suggestions.

Of course, suggestions from employees should be taken seriously, as they are in the best position to judge which features are beneficial. A good way to do this is to keep a list of all the customization requests that employees make, and continue to use the standard queries for the time being. After some time in the field, it will become clear whether further customization makes sense or whether the desired items have become superfluous.

Learn how to build a strong project team here:

Tip 3: Prepare data accurately

The database is the foundation of an ERP system. The first step in any ERP implementation is to determine what data will be transferred to the new system. This is usually master data. However, everyone has a different definition of master data, so you should determine in advance what data will be transferred – and verify that it is current. That way, you start with fresh data and can get the most out of the software without having to worry about making adjustments later. This can significantly reduce the cost of your ERP system.

Learn how to prepare data well here:

How to Define Data Maintenance Criteria

Tip 4: Train users properly

You need to budget part of the cost of the ERP system for training the relevant users. How much these costs will be depends on two factors. First, which and how many modules will be used, and second, how many people will need to be trained and how often. Obviously, the greater the number of modules, the more time-consuming the training will be. Experience has shown that a younger age structure requires less training than an older one. Young, PC-savvy people often only need to be trained once, while older people need to be trained more often.

For more useful information on training, click here:

Why ERP Training Makes Sense

Tip 5: Prioritize your ERP project

Many companies think that implementing an ERP system is a project that runs parallel to the day-to-day business and does not require many resources. You should let go of this idea. The project is not a service that you hire your ERP vendor to provide and then get out of its way. It is about your processes and your people.

If you do not give the project the attention it deserves, it will be delayed – and this will most likely be reflected in high ERP system costs. Every additional meeting, every postponed appointment, and every trip by the ERP consultant will increase the cost of the ERP software. Your cooperation is required to ensure that the implementation goes as smoothly as possible and that your costs do not increase unnecessarily.

Customer projects often take precedence over ERP projects. The project team consists of inexperienced people because the experienced people are needed elsewhere. From your point of view, this may make sense – after all, the customer brings revenue to your company, while the ERP project costs you resources. However, this approach usually leads to additional costs because inexperienced employees often make mistakes that can be avoided. The principle is simple: the more priority you give to the project, the faster you can implement the ERP software – and the lower the ERP implementation costs will be in the end.

Conclusion: how to reduce ERP system costs

Implementing an ERP system comes with a high initial cost. The software comes with many standard features, but no system can be perfectly tailored to your needs from the start. Customization is important to ensure that your processes are fully supported and covered. However, only half of the cost of an ERP system is fixed, and you should take advantage of that.

If you keep these points in mind, nothing stands in the way of a successful – and affordable – ERP project:

Good preparation and cooperation – with a detailed requirements analysis you can avoid later adjustments. Be as specific as possible about what you want the system to do.
Strong project management helps keep implementation costs in check. Appoint a person to keep an eye on costs and keep a firm line with the staff.
Carefully prepared data reduces the need for rework and improves performance.
Training costs can be reduced by choosing users and modules wisely.
The more attention you pay to the project, the lower the costs will be in the end.

If you would like to learn more about ERP system costs and your options for reducing them, please send us a message using the contact form, write to [email protected] or contact our sales team at +49 212 230 35 200. We will be happy to advise you!

22. April 2024

The process of a successful ERP system implementation

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The implementation of an ERP system is often a long and complex process with many individual steps. Depending on the complexity of the requirements and the number of employees, it can take several months before the system is integrated into your daily operations. Such a project costs time, resources, and probably some nerves. But before you throw in the towel, ERP implementation is like any other project: planning is everything. The success of an ERP project rarely depends on the technology. But what makes it fail? It is more likely to be poorly defined goals, unclear process structures, or even employee resistance. What you need is good preparation and a project team that works together from the start. Here is an overview of the ERP implementation process – and what else you need to consider to make your project a success.

ERP implementation preparation and analysis

Before you start researching ERP vendors, ask yourself if you are ready for an ERP system. For example, even the best software cannot compensate for a lack of foundation or organization. And as a small or midsize business, you often have limited resources. Therefore, you should not be lax in your initial considerations. One key factor, for example, is centralized data management in your company. Your data should be up-to-date, and your processes should be documented regularly. What do you want to achieve by implementing an ERP system? What do you want the system to do? These are fundamental questions, but many companies take them lightly. Once you have clarified the essentials, you have laid the foundation for your ERP project.

Requirements analysis and specifications

The next thing on your list should be a requirements analysis. Try to be as open-minded as possible. To gain new perspectives, it can be helpful to bring in outside experts – this often allows you to see your company through different eyes. It can also be helpful to involve your employees in the process. After all, they are the ones who will be using the ERP software. The best way to do this is with a tour of the company and a face-to-face meeting. A good way to capture your business goals and requirements for the ERP system is to create a requirement specification document. This document is the basis for further ERP selection. A distinction is made between technical and functional requirements. However, try to keep your expectations solution-neutral and leave the implementation to your future ERP vendor.

In addition to requirements for the ERP system, the document should include a description of your company and the market environment. Information about your products, services, strengths, and current IT infrastructure is also useful. A timeline and a contact person are also important. Take some time to formulate this, as adjustments are usually costly in hindsight.

Project manager and key user

In addition to conducting a requirements analysis and writing a specification, the project team is at least as important when implementing an ERP system. You will need a project manager and a key user. When choosing these people, you should consider their personalities. For example, the project manager should be assertive, but also forceful. They should have an eye for the big picture and be close to the day-to-day operations. Key users, on the other hand, represent the interests of your employees. They mediate, act as mentors, and point out the benefits and changes that will result from the implementation of an ERP system. They try to be sensitive to fears and reservations, and they are the ones who train employees on the system. Your key user should have as much experience and expertise as possible. Be aware that both positions require a lot of time. Time that has to be distributed among other employees.

From longlist to shortlist

Finding the right ERP vendor is not easy. But since you will be working with them for years to come, it is not a decision to be taken lightly. However, there is a good way to make your search a little easier. Start your search by researching on the Internet and keeping a checklist. Write down a rough summary of the providers you are considering. This so-called longlist will give you an initial overview. Be sure to consider both technical and functional requirements: For example, do you need to interface with other systems? Once you have compiled a list of vendors, send them the specifications you have prepared. See how they respond to your request. How long do you have to wait for a response? Is the email a boilerplate or do you get a personalized response? This will help you filter out other ERP vendors.

The remaining candidates form your shortlist and you should schedule a short presentation with them. Here you can present your current situation and clarify any questions. This is followed by an ERP workshop. A presentation tailored to your needs. The vendor can demonstrate the functionality you need in their own system, using sample data or a small selection of your original data. This will give you an idea of how the ERP system would fit into your business. The entire project team should attend the workshop. Pay attention to the personal level as well, they should get along with each other. After the workshop, the vendor can tell you exactly what the price will be. Before, only the license cost can be quoted.

ERP system deployment – the implementation phase

Once you have selected a suitable ERP vendor, the implementation can begin. Your vendor will show you how they plan to implement your requirements in a requirements specification. The terms requirements specification and functional specification are often used interchangeably, but they are two different documents. Read the requirements specification carefully, as it is the foundation of your ERP implementation. This will allow you to minimize adjustments as the project progresses. Next comes the installation of the system with demo data, setup and customization. Finally, all that remains is the transfer of your data. The staff is usually trained by your key user. And that’s it! It goes live.

Checklist: Are you ready for ERP implementation?

Is there an up-to-date, centralized database?
Is the project team in place?
Are business processes regularly and consistently entered into the system?
Is the exchange of information governed by processes?

ERP implementation summary

For a better overview, here is a short summary of each of the steps:

Perform a requirements analysis
Create a requirement specification
Assemble a project team
Create a long and short list
Conduct an ERP workshop
Make an ERP selection
Have specifications written
Install the ERP software
Data Transfer
Customization & Reporting
Actual operation (day-to-day business)

Want to learn more about ERP implementation or the full range of TimeLine ERP functionality? Send us a message using the contact form, write to [email protected] or contact our sales team at +49 212 230 35 200. We look forward to hearing from you and will be happy to advise you!

22. April 2024

Success factors for your ERP goals

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A new ERP system can have many positive effects on your company. It influences nearly every business process and internal workflow. Used correctly, it makes daily tasks easier and better, provides structure and improves communication. Your company becomes more transparent and therefore more future-proof. The last article described step-by-step how to introduce an ERP system into your company – from planning to selection and implementation. In this article, you will learn how you can organize ERP management to ensure that your investment bears fruit. There are some success factors – and also mistakes that you should avoid, when you want to reach your ERP goals.

Success factors are defined as “factors and conditions that determine the success or failure of entrepreneurial activity”. Critical success factors are factors “of particularly great importance” (Dömer 1998). If these factors are right, your ERP project will also be successful. There is no doubt that there are countless factors that influence the success or failure of a project in your organization.

erp-management-erfolgsfaktoren

Are company-wide framework conditions in place?

How do you organize ERP management? First of all, it is important to define the framework conditions for your project in advance – these include objectives, resources and costs. You should always keep an eye on these during the project. This also includes regularly documenting and communicating project progress. In addition to the selection of your project team, the distribution of roles within the team itself is also important for the project to run smoothly. Functions and tasks should be clearly distributed. The challenge here is that the project should not become purely additional work. Try to free the members of the project from their line activities as far as possible. There will probably still be times when the days in the office get longer. Small gestures of recognition can help to provide new motivation.

Change management: one of the most important success factors

Probably the most important aspect in making the new ERP solution a success is your employees. Effective change management is one of the most important success factors of every ERP goal. Even the best ERP system has no added value for a company if your employees resist it. To prevent this, you should not put the fully implemented system in front of the workforce. Get your employees on board as early as possible – that way you can quickly get them excited about the new solution. It is best to announce the upcoming changes as soon as the introduction of the new system has been decided. But what is the best way to do this?

Good ERP management: ERP goals are reached with teamwork

Announce the transformation step by step. And preferably in person, not by circular email. This will give your employees time to get used to the idea and not feel overwhelmed. The best method is to communicate your plans and concerns openly – this way you can also prevent rumors and create transparency. This includes, for example, the people involved, a timetable and also what will change in the future. If you would like to bring in an ERP manager or consultant, introduce them to your employees. A staff meeting, for example, provides a good platform. This way, all employees are present and have the same level of information. Questions can be asked and answered directly. Furthermore, you should not present the ERP implementation as a pure IT project. Otherwise, it could quickly give the impression that it is only a technical changeover.

What to do if employees reject the ERP system?

If your employees reject the new ERP system, there is rarely any malicious intent behind it. Rather, the fear of new or changed operational and organizational processes comes to the fore: processes become transparent, errors are detected more quickly and the fear of a perceived operating error increases. This fear is not entirely unfounded, as a modern ERP system maps processes automatically on the basis of correct data – which is precisely what makes it so effective. It is therefore important that you take your employees’ fears seriously and do not ignore them. Point out the advantages of the new ERP solution and the positive effects that the changeover will have on the entire company and your goals. Make it clear that this is a future-oriented project: the ERP software secures jobs and offers new opportunities to contribute to the company.

Formulate effective goals – thanks to ERP management

Once you have the workforce on your side, it’s time to formulate your ERP goals. You can only be successful if you have goals. Unclear goals and imprecise requirements are one of the most common reasons why projects fail – followed by a lack of resources and a project budget that is too small.

“Improve structures and processes”

This may be a goal, but it is not well formulated. Which structures? Which processes? How exactly are they to be improved? In what timeframe? And how do you know when the goal has been achieved? If you define such an ERP goal at the beginning of a project, there is a high probability of disappointment with the result. Especially when several parties are involved, there is a lot of room for interpretation.

Make your goals SMART – with the help of ERP management

A clear formulation of objectives is therefore particularly important. The SMART method consists of five criteria. Smart goals should be:

Specific
Measurable
Accepted
Realistic
Scheduled

What this means in detail is described below.

Specific

Specific goals are important so that everyone involved has the same idea of what the project is supposed to achieve – and there is no room for interpretation. These five questions will help you formulate them:

What exactly do you want to achieve?
Why is this important?
Who is involved?
When do you want to have a result?
How do you plan to proceed?

Measurable

Define criteria that can be used to measure whether you have achieved the objectives. These can be concrete figures or data. This allows you to assess progress – but also to take countermeasures if you stray too far from the defined goals.

How can the achievement of objectives be measured?
When do I know that I have achieved the target?

Accepted

Imagine that you have to work on a goal that cannot be achieved. Make sure that your goals are challenging but feasible. Otherwise, your motivation will quickly wane.

Is the goal motivating and accepted by everyone involved?
Can it be achieved through the project?

Realistic

Realistic goals are closely linked to acceptance. If goals are realistic, they are generally accepted. If goals are formulated unrealistically, people tend to ignore them. It is also important here whether the achievement of the goal can be influenced.

Do you have the necessary resources?
Is the timeframe sufficient?

Scheduled

Clear deadlines are important for your team. Tasks without a deadline are often not implemented promptly. But not all ERP goals have to be scheduled. For example, there are financial targets that should be achieved regardless of a specific date.

When should the target be achieved?
Is the goal achievable within the project duration?

Once you have identified and recorded your ERP goals, you are already a big step further in your growth. Now you need to keep an eye on them and make sure you don’t stray from the path. The success of an ERP implementation does not depend on the technology – it is the people who work with the ERP system. That’s why none of the success factors mentioned revolve around the software itself.

Would you like to find out more about ERP implementation, ERP management or the entire range of TimeLine ERP functions? Send us a message using the contact form, write to [email protected] or contact our sales team on +49 212 230 35 200. We look forward to hearing from you and will be happy to advise you!

22. April 2024

Corporate ERP training – is it worth it?

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The right ERP vendor has been found and the new system has been successfully installed. It almost seems as if you can now check the “ERP project” box and move on to other tasks. Unfortunately, it’s not quite that simple. The most important thing is still to come: training the staff. What might seem like a trivial formality often turns out to be the biggest and most important challenge. To get the most out of the software, the goal should be to get employees on board and prepared for the changes ahead. After all, much of the working environment is changing. The following article explains why ERP training makes sense, how best to implement it, and the benefits it brings.

Why ERP training matters

Many companies still believe that implementing an ERP (Enterprise Resource Planning) system is just an IT project that, once completed, will automatically lead to improved processes. However, implementation is routine for the ERP vendor and rarely leads to problems. If they do, they can usually be resolved quickly. What is often overlooked is that even the best system is of no use to the business if it is operated by an unsuspecting employee. Especially if you are using ERP software in your company for the first time, everyone will have different levels of knowledge. It is at this point that you should pick up the staff and bring them up to the same level. This is the only way to integrate the system into day-to-day operations and reap the benefits.

This may sound like a lot of work at first. Try to think of the training as a valuable investment rather than a necessary evil. Experience has shown that it always pays to invest in your own people. Every employee has their own potential, and if you nurture it, both parties will benefit in the long run. But how do you successfully implement ERP training?

Successful ERP Training Implementation

In general, ERP training can be divided into two phases. One is basic training and the other is employee training. Both take place at different stages of the implementation and serve different purposes. Basic training is about training the key users and giving them the capability to train their colleagues. They are responsible for the project from the beginning and are selected by you in advance. Whether you choose one or more people for this position depends on the size of the project.

Basic training provided by the ERP vendor

Basic training for key users is usually provided by the ERP vendor. In return, you receive regular training and support. This means that the training does not take place on a fixed day, but throughout the implementation period, long before the technical implementation begins. The goal is to give key users an overview of the system so that they can pass on their knowledge to their colleagues once the system is implemented. The key users are the interface between the software and the business processes. Of course, this assumes that they are experts in both areas. Ideally, you should choose someone who is both a good communicator and has a good technical understanding of the system’s functionality. Once the key users have been trained and the system has been implemented, the next step is to train the actual users.

Employee training preparation

Typically, employees are trained by the key users after implementation; the ERP vendor rarely does this itself. The advantage to you, of course, is that the cost is much lower because you only have to pay the ERP vendor to train the key users. In addition, the distance between key users and employees is often smaller because of the collegial relationship. A trusted colleague knows which features are important to the business and is better able to allay employee fears than an external coach. This allows you to better tailor the ERP training to the team and reduce potential resistance. Many employees are often skeptical of new ERP software because they fear it will replace them. The downside is that the workload for key users may increase during the implementation phase. At this point, you may want to consider whether it would be helpful for that employee to delegate key tasks to other colleagues during this time.

The following organizational considerations should be made prior to ERP training:

What content is being trained? Is it a basic workshop on how to navigate the system and maintain master data, or is it advanced courses on specific topics such as financial accounting, bookkeeping, or financial statements?
When and where will the training take place? How long will it take?
For which employees is the insight relevant? Can anyone attend?
Who will conduct the training?
What documents or other materials will be needed? Also, create training materials that can be used later as a resource to help train further employees.

Benefits of ERP Training

From a business perspective

ERP training for your own employees always pays off. Use your potential and train your employees to become specialists. Due to a shortage of skilled workers, more and more mid-sized companies are dependent on the performance of their employees. The more qualified an employee is, the more he or she can contribute to the company’s success. A trained employee not only uses his knowledge in his daily work, but also automatically passes it on to his colleagues. In short, more knowledge flows into the company. This makes you more competitive and your company’s goals more likely to be achieved. It also makes you a much more attractive employer. A potential employee is more likely to choose you if there are opportunities for professional development. This also intuitively motivates them to perform better.

Employee motivation

There are different types of motivation. The most common types are extrinsic and intrinsic motivation. Extrinsic motivation is always triggered by external stimuli. Classic examples are financial incentives or the desire for rewards. In contrast to intrinsic motivation, tasks are not performed for their own sake or initiative, but with the prospect of money or recognition. Extrinsic sources of motivation are quick to motivate, but also quick to dissipate. ERP training provides the opportunity to think outside the box. Learning, understanding and being able to apply new things is more likely to encourage people to perform a task because they find it interesting. The result is a high level of learning, which in turn has a positive impact on the engagement, quality and success of your organization.

Transparency and streamlined processes

In addition to personal development, transparency and process optimization have a positive impact on employee motivation. Transparent processes make people aware of their role in the team. They show each employee how his or her work affects the success of the company as a whole and give meaning to his or her own contribution. Streamlined processes reduce workload by automating repetitive tasks. However, if you use the benefits of process optimization to reduce headcount and costs, you will create resistance to the new ERP system. Why should your employees support something that threatens their place in the company? The implementation of ERP software can increase motivation if it is successful, but it can also have the opposite effect if it fails. The focus should always be on the human factor. It is the key to a successful ERP project.

Benefits for the employees

An ERP training program benefits not only the company, but also the individual employee. On the one hand, additional qualifications increase your chances on the job market, but on the other hand, they also secure your job in the company. Getting an additional qualification not only boosts your self-confidence, it also automatically sets you apart from the competition. Internally, you will also receive recognition from colleagues and management, especially if you can apply what you have learned in your day-to-day work. Well-paid positions are also highly coveted by internal competitors. In addition, an increase in skills and education usually leads to an increase in income. One of the most important factors, however, is that the sense of togetherness in the team improves significantly when, for example, several employees attend and complete an ERP training course. This automatically leads to a more relaxed working atmosphere and a more productive day. Many employees also see training opportunities as a form of recognition, as it signals a long-term commitment to the company.

Conclusion

No matter what industry you operate in or what applications you plan to use it for: An ERP system can either make your job a lot better or a lot worse. If you do not take ERP training seriously, the success of the ERP project is at risk. Failure to adequately prepare employees for the changes ahead can lead to team dissatisfaction and high support costs. However, for both the implementation and the ERP training to be successful, both sides need to be prepared. When this is achieved, both you as the business owner and the entire workforce benefit – a classic win-win situation.

If you would like to learn more about ERP training in your company or the full range of TimeLine ERP functionality, please send us a message using the contact form, write to [email protected] or contact our sales team at +49 212 230 35 200. We look forward to hearing from you and will be happy to advise you!

22. April 2024