The implementation of a cloud ERP system is a demanding task. In addition, the system change will most likely impact members of your organization and suppliers and customers.
Starting on a cloud ERP implementation calls for a massive undertaking and may involve tremendous risks.
Project leaders are responsible for communicating with key stakeholders, the software vendor, implementation partners, and project managers to decide the most appropriate implementation process.
3 Different Cloud Implementation Methodologies
Each cloud ERP implementation process has its own set of advantages and disadvantages. Learn more about each approach and choose the most appropriate one for your company's needs.
Phased approach
A phased approach divides a large project into many smaller projects.
For example, Phase 1 may consist of fundamental functionality, whereas Phase 2 may consist of additional, less-critical features.
Phase 2 may involve:
- The creation of new modules.
- Integrating a third-party application.
- Developing a seamless interface with your organization's other systems.
Advantages
- Changing the composition of the implementation team after each phase will not cause any significant interruption to the program.
- Because your implementation team is likely to be smaller, communication will be more straightforward.
- During Phase 1, you may understand how the ERP system operates before moving on to the next phase.
- Delivering functionality through a series of smaller initiatives reduces the chance of failure.
- At go-live, fewer functionalities must be configured and supplied, lowering the level of complexity.
- Because just a subset of the capability is provided, training is more focused on that subset.
Disadvantages
- Because implementation will almost certainly take longer than anticipated, the overall program cost may be higher.
- Employees may get dissatisfied if necessary functionality is not implemented until a later stage, which might negatively influence change management.
- Because the systems and procedures will not be simplified until the next phase, employees may have to continue utilizing outdated systems and processes for a while.
- The project may be terminated by workers, contractors, or implementation partners after each phase since it is a natural moment for them to withdraw from the project.
- Because the project is divided into many phases, training will need to occur on several occasions.
Big bang approach
A big bang approach refers to implementing the whole system in a single large project, culminating in a single go-live for the entire company.
This strategy is appropriate when breaking a project into sub-projects would have a detrimental effect on the end-user experience, which is often the case.
Advantages
- The big bang approach is often the most efficient method of delivering all of the ERP features to your users simultaneously.
- Because the project will be completed in less time, you will be less likely to lose crucial resources throughout the project.
- Training is being devised and offered for the whole system, not just individual employees. Overall expenses are anticipated to be reduced since the implementation will be shorter, resulting in fewer human resource expenditures.
- There are no dependencies on legacy systems to fill gaps when the program is first implemented.
Disadvantages
- An issue in one area might negatively influence the whole project's go-live timetable.
- Because you must convert data from various systems simultaneously, data migration will almost certainly be more complicated.
- Delivering all of the features in a single release might be more complicated than implementing alternative solutions.
- Before you can use and grasp the subtleties of the primary ERP system, you must first install new capabilities into the system.
Line-of-business approach
With this line-of-business approach, your ERP implementation will take place in many stages, each of which is tailored to the requirements of your organization's designated areas of business. For example, consider the following scenario: you are responsible for the ERP deployment of the company's American division, the Canadian division, and finally, the European division.
You might also separate your stages according to the product lines you sell. This strategy incorporates elements of both the big bang and phased approaches. When using a phased process, you may break the project down into numerous more minor tasks and then provide the full capability to one line of business at a time instead of when using a big bang method.
However, we must recognize that the project team may need contributions from individuals who have not previously worked on an ERP installation project. For example, although the essential functionality, security, and reporting may be identical across lines of business, interfacing with third-party suppliers may be regional and need solely the support of the current line of business to perform effectively.
Advantages
- Because you're providing functionality in a series of smaller initiatives for specific lines of business, the overall program risk is reduced.
- You may postpone more complex needs, such as handling various currencies until later in the development process.
- You may complete the functionality needed by a single line of business in a single step.
- Releases might be prioritized depending on the requirements of different lines of business.
- When working on subsequent implementation projects, you will draw on your past implementation project expertise.
Disadvantages
- It may be difficult to prioritize one business area without incurring organizational, political problems.
- Numerous critical project choices are almost certainly made during the first phase and may be tough to reverse when new lines of business are brought on board in the following steps.
- You may have to repeat prior work to meet the needs of other company lines.
