An appropriate methodology must be used if an ERP system implementation is to proceed without disruption. There are many to choose from, with Waterfall and Agile being the most popular. How do they affect company operations? Each has its own characteristics, which must be matched to the project’s details and the organization’s requirements. The greatest challenges in ERP implementation
ERP systems have been regarded as standard in manufacturing companies for many years. Their implementation can nevertheless be problematic, and companies must be prepared for numerous challenges. The first is the extensive choice. Many ERP systems are now available on the market, which on the one hand makes it easier to find a tool perfectly suited to a company’s needs, but on the other makes it more difficult. Individual solutions often differ only in their details, which can lengthen the decision-making process. Data presents another challenge. ERP systems require large quantities of high-quality data to operate correctly. If there is too little data or its quality is poor, implementing the system will not produce the expected returns and may even cause the entire project to fail. The same applies to purely technical matters such as the selected tools or implementation methodology: if they are not suited to the realities of the company and the system’s characteristics, implementation may fail. While technical factors or matters affecting platform selection can be resolved relatively easily and quickly, human issues require more work. A
failed implementation is often caused by a lack of management support, poorly explained and designed changes, or reluctance to move away from the existing business philosophy. Human factors frequently have a greater impact on the success of the entire project than the technological solutions applied.
ERP system implementation methodologies in enterprises
A methodology encompasses all the details associated with implementing a project. It includes not only the technologies used, but also the division of tasks, time frames, and sets of best practices.
Waterfall and Agile are the methodologies used most often to implement ERP systems. Waterfall, also known as the cascade methodology, is a more traditional, linear approach. Waterfall can be divided into
six stages:
- diagnosis,
- analysis,
- design,
- build,
- launch,
- operation.
Importantly, Waterfall assumes work will be performed within a budget established before the project begins. Agile, better known as the agile methodology, proposes a different approach. It is based on short periods, short-term planning, and work on a small part of the whole. Work takes place in sprints: short cycles that lead to the launch of a specific part of the system. Agile produces rapid results and allows project assumptions to be modified quickly. Unlike Waterfall, Agile involves paying for the number of tasks completed within a specified period.
Which ERP system implementation methodology should you choose?
It is difficult to provide an unequivocal answer to the question above. Much depends on the characteristics of the company, the products it manufactures, and the requirements imposed on the ERP system itself. Project-financing considerations are important as well. Each methodology has advantages and disadvantages and works in different circumstances. Waterfall is a better choice when implementing an ERP system from scratch, which may be expensive and often take a long time. It makes it possible to design a system perfectly adapted to the conditions within a given company and provides insight into anticipated costs before the project begins. Agile, on the other hand, is preferable when the objective is to achieve rapid results and implement the project step by step. One of its clear advantages is that the company pays only for completed tasks, making it possible to withdraw if, for example, either the implementation provider or the company in which the implementation is taking place enters a difficult period. Regardless of the methodology selected, the project team should have the highest possible level of competence. This will significantly reduce the duration of the entire project.
What are the benefits of implementing an ERP system properly?
A
successful implementation of an ERP system brings a company many benefits. The most important is the standardization of company processes and data. Integrating them within a single platform increases the speed of the entire operation, which translates directly into business potential. If company employees can access all information and perform tasks within one system, they do not need to waste time searching for paper documents, for example. This enables them to complete more tasks. Another benefit of ERP implementation is a rapid return on investment. This results directly from the factors described above and from better organization of work. ERP systems can automate some tasks, reducing the time required to complete them. Repetitive activities are generally the ones automated, improving employee well-being. In addition, integrating all data in one system provides greater control over company operations and enables better, faster decisions.
How long does ERP system implementation take in enterprises?
It may be the case that building an ERP system adapted to the company’s circumstances from scratch takes less time than integrating
ERP and MRP systems already used in the enterprise. When implementing an ERP system from scratch, much depends on the project’s characteristics and size. It is reasonable to assume that the smaller the area covered by the project, the less time will be needed to complete and launch it. The selected implementation methodology is another factor affecting the duration of ERP implementation. With Waterfall, the project team can estimate the anticipated duration of the project at the very beginning. It must be remembered, however, that Waterfall is better suited to building ERP systems from scratch, and this can take
from several to more than a dozen months. If time is limited or the company does not want to run a large project, Agile will be the better choice. It produces visible results quickly, and the project can be stopped at any time. The remaining factors affecting implementation time are the budget and the project team. While Agile involves paying only for completed tasks, a Waterfall budget should account for potential difficulties during delivery. The size of the budget also determines the capabilities of the project team: better specialists will complete the work faster but will cost more. Regardless of the implementation methodology selected and the duration of the project, ERP implementation should not be delayed, particularly in manufacturing and logistics companies. Although the initial costs may be high, they are quickly recovered through greater efficiency and stronger financial performance. ERP implementation can improve an enterprise’s market position substantially, so it should not be postponed.
