Change Management: Preparing Your Organization for a Cloud ERP Implementation

Updated on: February 29, 2024

Implementing a new ERP system is a major organization change that takes a lot of thought, strategy, and planning. A new ERP system effects processes that span multiple departments including, but not limited to Accounting, Finance, and IT. An ERP implementation generally take several months, coordination amongst various stakeholders, and a lot of time…a lot of time! There are steps an organization can take to prepare themselves for an ERP implementation in order to reduce any negative impact and realize benefits as soon as possible. Below are some quick tips help prepare for an ERP implementation: 

  1. Develop a business case: A new ERP system is a big decision. Before embarking on the journey, it’s important to have a sound business case supporting the decision. Developing a business case involves many steps including but not limited to stating a vision, forming goals, developing key requirements, comparing software, identifying benefits, and gaining buy-in. The business plan should continue to evolve throughout the entire process all the way through the very start of the project. 
  2. Receive buy-in from key stakeholders: An ERP implementation is a team effort. Support needs to come from the top as well as from the people who will be affected by the system. It’s important to get buy-in from the executives and identify an executive sponsor within the organization who will be an advocate of the project. After buy-in from the leaders of the organization, it’s crucial to get buy-in from the people who will be affected by the system since many of them will be operating the system itself and their time will be needed throughout the implementation. Having 360 degrees of support will ensure a much smoother implementation process. 
  3. Document high-level requirements: It’s critical to think through what the business requirements are even before thinking about the software.  Modern ERP systems offer a wide array of modules. Start with documenting which modules are critical (e.g. GL, AP, AR, Inventory, Grant Management, Fixed Assets, Reporting…) and then come up with high-level requirements for each module. Work with executive sponsors as well as potential users of the system to identify the highest priority requirements. Try to identify which requirements will prevent you from going with a solution. The goal is to be able to differentiate between systems based on critical functions. Try to stay out of the technical weeds as much as possible. Add the results to the business case. 
  4. Evaluate software options & find a trusted implementation partner: Now that high-level requirements have been developed, it’s time to evaluate software options. Usually ERP software is implemented by an implementation partner who are software and (hopefully) business experts. It’s important to pick software that supports the business processes as well as implementation partners that understand the business and how the build the software to support the business processes. Evaluating the software against the high-level requirements will allow for narrowing the list of which software packages are right for your organization. During this time, it’s also important to gain an understanding of potential software and implementation costs. This could help quickly narrow the list even further. Add results to the business case. 
  5. Formulate project budget: Now it’s time to formulate an internal project budget. This project budget will include multiple types of costs including software costs, implementation costs, project management costs, training costs, post go-live support costs, data migration costs, software switching costs, a % for overruns, and more. It’s important to think through all the various costs in order to properly budget for the implementation and avoid any surprises. Once complete, add the results to the business case. 
  6. Select a software and implementation partner: Once the budget is formed, it’s time to make the final decision on which software and implementation partner. For the final round of decisions, it is recommended to have the potential partners come on-site and demonstrate/pitch their software and consulting offerings to the key users. This will allow the team to get as many important questions answered before any agreements are in place. Once decided upon, add the information to the business case. 
  7. Agree on project goals, scopetimeline, and costs: Work with the internal team, the software providers, and implementation partners on project goals, scope, timeline, and costs. It is imperative to work with the internal team as well as with implementation partners on project timeline, goals, and scope. The more informed the internal team is, the more prepared they’ll be for the work and support they will give to the project. We cannot stress enough how important it is to include all stakeholders on this step. Get feedback from as many relevant parties as possible to ensure the project has their support. 
  8. Communicate with stakeholders: Once an agreement is in place, make sure to communicate with all stakeholders and to set their expectations. Share the key benefits, project cost estimates, and timeline with the executive sponsors. Share the key benefits, timeline, and (especially!) the future time requirements from the users of the system and others that will be directly involved in the project.

These are 8 key steps to follow while embarking on the journey of an ERP implementation. Each of the steps deserve their own lengthy blog, but it’s important to know to follow these steps when considering an ERP implementation. If we can emphasize one thing, it’s consistent communication with all necessary stakeholders constantly setting and resetting expectations along the way. Following these steps will put your organization in the best position for a successful implementation.

To learn more about transitioning to a new cloud ERP system, check out our latest series, ‘The Path to a Successful Cloud ERP Implementation’ for common implementation pitfalls and strategies to avoid them.

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