ERP projects aim to implement a system that synchronizes functions, processes, and departments into one system with shared data and accessibility. The project lifecycle includes understanding customer needs, gathering information, outlining goals, implementation, training, testing, and post-implementation support. Successful implementation depends on budget and time planning, and risks can be technological, financial, or human in nature.
An enterprise resource planning (ERP) project is one that works to implement ERP systems across an organization by electronically synchronizing functions, processes, and departments into one system with shared data and accessibility. ERP systems, when implemented and managed correctly, can increase competitiveness, efficiency and communication, improving the ability to make informed decisions. ERP projects attempt to complete the ERP implementation within a specific time frame and budget.
The ERP project lifecycle begins with an understanding of the customer’s process needs at various departmental levels. Initial research and organizational insight can help structure the ERP solution around the customer’s goals and needs. The ERP project continues to gather information on system requirements, provide pre-implementation training courses, and conduct process mapping reviews.
Once information is collected, implementation goals, milestones, and timelines are usually outlined in an ERP project plan. This sets the tone for the project and subsequently establishes the success of the project. Implementation will include technology installation and configuration, customizing reports and forms, and archiving historical data. Projects end with training and testing and are followed up with post-implementation support.
Successful implementation largely depends on the stipulations outlined in the project plan and goals. A project can be considered a failure when budget or time targets are exceeded. An ERP project often has a high potential failure rate, which makes budget and time planning an essential part of the project plan. In medium-sized organizations, the average cost to implement an ERP project can reach $70,000,000 (USD). The estimated time for an ERP project is six months to two years.
The successful implementation of an ERP project occurs concurrently with day-to-day business, but may require significant additional resources from the same number of people. Small or medium-sized businesses often struggle to meet these additional requirements, thus presenting another risk to completing a successful ERP project.
The risks associated with the implementation of an ERP project can be technological, financial or human in nature. Technologically, systems are risky as many processing technologies are required to operate the system. These technologies, even when in adequate functional status, must match the specific needs of industry and business. Changes in cash flow or the company’s ability to finance projects can result in financial risks. Human risks are featured in post-implementation strategy effectiveness, education, and corporate attitude about ERP system adoption.
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