Installing an ERP system

Many companies defer installing an ERP computer system because of the disruption and risk involved in the installation process. These risks and disruptions can be minimised with good planning and preparation.

The extent of the work involved will depend on the size of the organisation involved and on its volume of clients, customers, suppliers, products, open transactions, etc. at the point of cut-over. But whatever the extent, the principles to be applied remain the same, whether the data is Master or Transactional.

These principles are to:
a) identify each entity; customer, supplier, product, account code, open sales/purchase/production orders, account balance, etc.; required to be set up in the new system.

b) identify the means of transporting data for each entity from existing systems into the new system. This normally means exporting data to an Excel spreadsheet or a data extract file useable by the new system.

c) identify the data manipulations required to change old format into new system format.

d) identify any missing data that the new system requires and determine how to acquire this data.

e) identify data used in existing systems that is 'dropped' by the new system; and decide how important this data is to the organisation and how any functional gap caused by this loss, is to be covered. This should have occurred when the new system was selected. But it should be re-examined now that more information on the new system will have been obtained in the interim period.
This is the point of greatest risk, for if some 'must have' business function appears not to be covered by the new system, it can become a 'show stopper'. Or at best, delay the implementation timeframe, whilst alternatives are investigated and assessed.

f) identify all actions that need to be performed on existing systems before the data is transferred across to the new system. Examples of this would include:- data clean-up, removal of old records, payment of all open items to suppliers, fulfilment of as many customer/production orders as possible.

g) whenever possible, coincide the switch to the new system with a financial year end, as it is always much easier. When this is possible, always import closing balance into the old year on the new system and do a 'year end roll' into the new year so that monthly/period movement reports are not compromised by cutover data.

h) identify new hardware and software requirements of the new system and the acquisition path and any delivery/installation delays.

i) collate the work required from the above points and assign to individuals along with developing a timeframe for each task. Critical points and data constrictions need to be identified so that timeframes are not delayed and additional resources can be focused in the right place when tasks are actually performed.

For a small organisation these tasks may only take a day or two to complete and not require significant testing prior to doing it for real. In larger organisations, test runs will be required to gain insights into exact data requirements and loading sequences. Whatever the size of an organisation, planning the installation process and preparing data in advance, goes a long way to making an easy and smooth systems installation.