How Long Does an ERP Implementation Take?
An ERP implementation is a major project. Organizations invest a lot of time and resources into the process of ensuring that their new software investment will create a tangible ROI for the business. A fundamental question that allows businesses to plan and measure the impact of the project is, “how long does an ERP Implementation take”? As you might expect, the answer is not fixed, and it depends on a number of variables involving how your business operates now— and how the business will operate in the future — after the new system is implemented.
Determining the length of time of an infrastructure build out is a daunting task that nobody inside the business wants to take a shot at. Why? Because ERP implementations are one of those projects nested high on a budget docket; they require large contributions of time, money and resources. Separate from the software, ERP implementations requires specific conditions to be right within the organization for a project to run smoothly. Few people internally feel comfortable putting a timetable together when answering, “how long does an ERP Implementation take”, because it may mean that their job is on the line. Mis-estimating these types of things and planning improperly can cause major cost consequences.
The truth is that if there are process issues or organizational dilemmas the project will inevitably take longer, and even lose some value resources along the way. Many times this is the sediment of a long and storied history of behavior that will extend the time it takes to select, implement and adopt changes to the business. An ERP system is the foundation of work flow from end to end of an organization. It takes a good deal of time, consideration, focus, and most of all, senior leadership to ensure that business needs are met. Without all those elements in play during the implementation, a project can go vastly awry and draw out the process.
…but, how long does an ERP implementation typically take?
Many of the people we talk to want general ideas around project length, and this makes total sense; however the true answer is that generalities really don’t matter — even from a planning perspective. There are layers to what a company may need initially, and what it may need long term. This means implementations can often be divided by what is needed at go live, and what is desired for optimum function in the future (things like additional modules, etc.). We talked about this recently in another blog post. Often organizations change what is needed inside of this process; which can modify the scope and put pressure on the schedule. This is often viewed as a bad thing, but as long as communication and transparency exist between project stakeholders, this is all very manageable. The bottom line is this, every company must put ROI first when evaluating their timeline, and what that looks like for each company can vary dramatically.
Panorama Consulting – an independent ERP consulting service – revealed the average duration of an ERP implementation is 14.3 months. Likewise, the study revealed 75 percent of implementation projects exceeded their initial estimated timeline. So what steps are these companies missing that is causing projects to take longer than expected? We’re sure all of those companies asked, how long does an ERP implementation take, at the beginning of those projects; however estimating and understanding that answer doesn’t make a whole lot of sense, unless the first questions centered around generating ROI.
Bryan Sapot is the founder and CEO of Datix. He first implemented an ERP system in 1992 for a real estate business and has since dealt expertise for businesses in over a dozen separate industries. Here he shares a proven understanding of the ERP implementation and what can make the difference for your upcoming project.
Q & A — How long does an ERP implementation take?
Q. So, Bryan – How long do ERP implementations take?
It really depends on your business. Determining the time it will take to implement business software as large and complex as an ERP, varies from case to case. It can take anywhere from three months to five years. Implementation time is contingent upon how many modules the company would like, number of deployment locations, customization, the number of available resources, data conversion, all amongst a number of other things. Not to mention, if data is not clean — or is separated from a legacy system already in place— there’s an added step in the process to clean it, or integrate it, in order to move forward with the project.
Q. What is the process for determining a time estimate?
You’ll want to determine how well each of those elements mentioned match your business processes. Each have an impact on time. A company would also need to define they type of reporting and dashboard capabilities they will need; as well as determine if there are custom reports that will need to be configured within the ERP system. Additionally, the client will need to present forth an exact number of business users which allows the implementation team to identify added complexities that may provoke risk to the project. Each of those users will need to both adopt and be trained on the new system; some of which are rarely on-site. The client should utilize an experienced partner who can ensure all user tasks are completed on time, and ensure there is a clear communication between them to see the project be done in time to access new business opportunities.
Q. How soon can a company expect to go live?
This is a question many forget to ask on the front end of the project. Essentially, it should be a driver of what they’d like to accomplish throughout the implementation, and not something contemplated when validating the system.
The only way to have an expectation is to create one. Integrate an effective communication plan into each phase of the implementation project. This involves weekly status meetings between the project committee and the implementation team from the date the project kicks off. Both the implementation team, and the project committee, must come to terms with realistic expectations about the project with priorities agreed up; and key stakeholders in the project must be appointed a role and held accountable for that role (i.e. executive sponsor having weekly communication with the project committee) With these behavioral aspects of the project in place there is much less of a chance the project runs over scope.
Q. Is there a difference in deployment time for cloud versus on-premises ERP systems?
Yes. On-premises systems require the procurement and setup of hardware (i.e. desktop computers, servers, etc.) and for that reason takes a much longer time to implement. On the other hand cloud-led technology can be accessed from virtually anywhere a wireless network is present, and need no added procurement of hardware.
Again, there is no way measure the amount of time it may take for a vendor to supply an ample amount of hardware. For those who will opt to stay on premises, it may be a good time for users to begin the edification process, learn about the system, and have something to look forward to while they wait.
Q. Who is the resource in charge with determining the length of time?
The team performing the implementation should be the go to expert for scheduling the project. Sometimes the client has business reasons for completing the project by a specified date. For those cases, the implementation partner should have an idea of what work could be done by that point. Those conversations will determine which goals are a priority and which are secondary. These changes should take the upmost consideration, as they often modify the scope of the project. If improperly communicated, the client may fail to understand why the project isn’t fully completed on the date it was intended. Users will also lose interest in the system, because there will be no communication to them as to when they should expect their portion to up and running. You can read more about project roles here.
To mitigate this risk, the implementation team can then configure deliverables around those specified priorities to get those parts of the system up and running. Essentially, the project team should submit a case to the client as to how the project can be broken up into phases. This way the company can move forward with their opportunities and are provided with a realistic expectation about what it will take to complete the project in the way they intended.
Q. What are some red flags the project time will surpass the initial go-live date?
Is there a lack of communication between you and the project manager? If a client isn’t discussing the project with the project manager – at least weekly – neither party will be held accountable for making sure the project meets milestones. Also, if the IT department is the only silo engaged in the project, this can cause problems.
IT teams understand technicalities, but may not understand how to gauge and resolve contingencies in business processes. This is where business leaders from all departments will need to be held accountable for participating in the adoption of the ERP system. Only then can the leading personnel work together to ensure the organization works together to adopt a flow of work and not continue to keep work internalized.
The point of the system is to create transparency for other business users and is likely a more effective solution for reports configuration. Without communicating specified work from each department, the ERP will not be configured to parallel these transactions and the system will not perform as expected. This will inevitably elongate the project in order to fix the problems later, because business users will undermined the ERP since they cannot retrieve the data they need to complete tasks from a single system.
Also, to convert data, it must be free of erroneous spreadsheets and duplicate data. When data is “clean” the company can move forward on a fresh, clean system. If an implementation team does not provide the client with the tools to assess their data, the client does not perceive any of their data as un-purposeful. However, without deciding which data is truly important, and which is not, converting this data will elongate the implementation process. Migrating data and converting it takes time; and time is money. The more data that needs to be migrated or converted, the longer the implementation will take. On a side note, if data is unclean, the client can absolutely not upgrade their data. That goes for whichever vendor they work with.
Users must be adequately educated on their system and the processes in which they’ll perform each day. Their education starts at the projects inception. An implementation partner should require users to do “homework.” These are reviewable materials for the user about the ERP software. It explains the purpose of the system, their role in using it and how it makes the difference in the business. Additionally, it keeps users engaged with the system so they bring it aboard their department indefinitely. This ensures the most ROI out of the system too, since users are using the system as intended.
Q. What conditions have to be right for an ERP implementation for a successful implementation?
- First, a company will need to carve out clearly defined business processes. This involves conceptualizing the work flows of a selling, engineering or shipping process from quote to cash. If business processes are not clearly defined prior to the project, the implementation team will fail to consider these aspects of the business in the mapping of the system. Later on, when the partner goes to validate the system they’ll notice they still do not have the ability to perform tasks the way they expected, and modifications to the system mapping will need to be made – thus elongating the time to go live.
- Secondly, those designated a role in the project need to be held accountable for completing the tasks they’ve been issued on time. Without managing this, the implementation will inevitably take longer than expected. Users will need to stick to a homework plan throughout the implementation and executive sponsors will be accountable for making sure users are reviewing the material. Also, if there are selling or unique quoting processes the company would like to perform, they’ll need to voice all that information at the front end of the project to properly estimate a realistic timeframe for implementation.
- Thirdly, the customer must accept the customizations that will need to be done to the system. No matter which ERP solution you choose, it’s unlikely that solution is a fit for your business out of the box. Also, if there are integrations of the ERP to other system that need configured, this will require custom mapping of the system as well. The time frame for the ERP project could be longer than expected – but it’s more likely worth the money and ROI that comes from those systematic configurations after the system goes live.
- Additionally, a client should never expect to go-live by January 1st. This is an unrealistic date. Likewise, a project should never begin on January 1st. You do not want to go live during the business time of the year. Many companies look to be live by January 1st in order to curb renewal fees of their former system. A client would want to be ready to implement much sooner – say late Q1 or early Q2 – in order to meet their expected go-live date and be fully functional in time to meet demands of their peak season, or reason for implementing the new system.
Ultimately, businesses that diligently map the project in the beginning will be best equipped to deal with the ebbs and flows of an ERP system implementation. This means understanding project goals, comprehending what realistic expectations are, and fully-grasping what the software can and can’t do prior to creating any deadlines.
Businesses considering a new implementation should read our latest e-book. The information inside of it is essential 101 info on how to extract ROI from a system, and mitigate the most common project risks along the way. If you’d like further help on how your business should approach an upcoming implementation, contact our experts today!