Enterprise resource planning (ERP) implementations are often the most significant technology investment an organization will make. Couple that with the cost of a systems integrator (SI), someone to configure and install the ERP, and the numbers can be staggering.
Any delay can exponentially increase project costs, often upwards of millions of dollars per day. The reason for the delay is rarely ERP functionality or partner incompetence. Usually, delays are caused by a variety of foreseeable and preventable data-related challenges.
There are two simple truths about data you can’t ignore when considering a new, complex, technical solution for your organization:
- Data moves horizontally across your organization, yet technology is implemented vertically.
- End-to-end data expertise is highly targeted, difficult to obtain and impossible to cultivate quickly.
The two biggest risks to continuing operations during ERP implementations: thinking about data only in the context of the implementation and having no data decision-making framework and data management expertise to protect business needs.
Data and Implementation Challenges in ERP Initiatives
When you understand and manage your data across its lifecycle through the ecosystem, you will avoid common challenges that plague many organizations First San Francisco Partners (FSFP) has worked with.
Creating More Silos
SIs are hired for their specialized knowledge of the ERP and not hired for their knowledge of integrated data solutions. While they are well versed in the data needed to successfully install an ERP, there are far-reaching consequences of poorly designed integrations and decisions made without context that can lead to delays or even break existing critical analytics required to run the business.
Incurring More Data Debt
Like its partner, technical debt, data debit is all about knowing how your data is used today and how it could be used in the future. Without a framework that allows for critical path decision-making during implementation, you may fail to determine what best serves the future aspirations of your organization. Business processes that rely on incomplete or inaccurate data can become bottlenecks, driving inefficiencies that cost real money.
Failed Integration and/or User Acceptance Testing (UAT)
During implementation, ERP SIs will use manufactured data to test the systems integration if actual data is not available. Testing each step in the process with manufactured data may not uncover real issues. When UAT arrives and actual data is used, errors could slow or even stop progress.
Relitigating Data Rules
ERP implementations often take a one source–one target approach to data migration. This approach is favored because it limits the amount of data that needs to be reviewed and allows for quick integration. However, challenges occur when data decisions are made system by system.
If implementation challenges aren’t addressed early, they can lead to reporting failures, broken dashboards and unnecessary churn in source systems. And if you don’t review your data ecosystem holistically, your decisions aren’t focused on the data but on the system. Reports break, dashboards fail and source systems churn unnecessarily.
ERP implementations are big-ticket items with big-ticket risks — none of which is riskier than ignoring your data.
Strategic Involvement: Timing and Team Dynamics
A successful ERP implementation depends on involving the right people at the right time in your organization. When you do this, you can meet your business objectives, ensuring a smoother transition, and avoid key challenges.
Under/Over Customization of the ERP
ERPs come with pre-built modules that can be customized to your unique business requirements. Your organization’s decision-makers should understand the data and business trade-offs of customization.
A well-structured decision-making process is crucial, as customization decisions made without considering the full scope of the ERP implementation process can lead to unnecessary complexity and long-term inefficiencies. What often happens is that choices are made based on technical requirements of the ERP. Effective customization choices depend on balancing data, business and technology requirements — and one is not more important than another.
Insufficient Executive Sponsorship
Executive support for the ERP team is critical. This is because ERP implementations touch most functions of a business and require decisions about priorities and trade-offs. Without executive alignment from the outset, an implementation project can quickly lose direction, leading to scope creep, budget overruns and misaligned objectives.
Realistic budgets and timelines are also necessary to set the implementation — and your team — up for success. Without strong support and commitment from functional leaders across the enterprise, the project stalls out or stops when everyone’s goal is to keep the project on track.
Subject Matter Expert Burn-out and People-Related Challenges
According to SAP, “No one who is unable to dedicate at least 25% of their weekly time (a minimum of 10 hours) should be added to the key project team. Team members spending less than a quarter of their time will barely be able to catch up on project activities, much less add value to the project.”
Supporting your internal resources effectively is crucial to the success of an ERP implementation. Your data SMEs are often pulled in multiple directions. They’re tasked with both keeping the business running and moving it forward. Realistic time allocation helps prevent burn-out and keeps these critical team members engaged.
By recognizing and addressing potential challenges early on, you can give your team the support it needs to remain focused and effective. Open communication and proper resource allocation are key strategies to mitigate the risks of burn-out and avoid the challenges of enterprise resource planning.
Role of Data-Centric Strategies in Successful ERP Implementation
ERP implementations are big-ticket items with big-ticket risks — none of which is riskier than ignoring your data. By beginning with a data-centric approach to integration, you can mitigate or eliminate issues to support a successful implementation. Staying data-centric ensures that future applications you add or swap out align seamlessly with your overall business strategy, which minimizes the impact on your data ecosystem.
Investments in technology are not inexpensive, breaking the flow of information in your organization costs even more. Ensuring you have a partner who is looking after your entire data ecosystem, like FSFP, makes good sense. We’ve partnered with a biopharmaceutical company on its ERP migration from Oracle to SAP, a global manufacturing company that needed to integrate a specialized data governance system into its ERP and other large organizations.
Our experienced data consultants can help your organization:
- Address data-related challenges posed by legacy systems.
- Avoid the biggest challenges and pitfalls associated with ERP data.
- See why data is at the heart of a successful ERP transformation.
At our data consulting firm, data is what we do, information is what we know, and action is what we advocate for. Interested in seeing how we can help? Let’s talk.
