Top 5 ERP Implementation Strategies

If you're in the process of evaluating and considering ERP software, then it's crucial that you think about your ERP implementation strategy and which one is right for your business. 

In this post, we'll look at various approaches and ERP implementation strategies, dicsuss the pros and cons and help you decide which one to use in your project.

What are ERP implementation strategies?

Simply put, an ERP implementation strategy is a framework and operating system for implementing a new ERP system which considers the scope and various other factors of an ERP project and optimises for either speed, cost or business outcome.

Almost all ERP implementation strategies and processes contain the following steps:

1) ERP Evaluation: ERP requirements gathering, ERP software selection.

2) ERP Project Preparation:

3) ERP System Design

4) ERP System Build

5) ERP Testing

6) ERP Go-Live & Support

For a full guide to ERP project implementation check our guide.

However, the way in which these steps are approached is often where the different strategies lie. An organisation will often choose to use a different ERP strategy depending on its business goals and constraints.

For example, some organizations need to minimise risk, whereas others need to focus on scalability, compliance or reducing cost. Before you decide on which ERP implementations strategy to use, you need to understand your ERP project goals.

Let's explore some of the most commonly used ERP implementation strategies below:

Big Bang ERP Implementation

As the name suggests, the Big Bang ERP implementation strategy is an all or nothing approach to ERP implementation. This strategy is favoured by companies that are trying to make change at pace and realise benefits quickly. 

A big bang ERP implementation strategy is when you choose to deploy implement all ERP modules across your business at once, potentially replacing multiple applications and adapting a large array of your end to end business processes.

Pros & Cons of Big Bang ERP Projects

Big bang ERP implementations are the fastest way to implement a new ERP system and realize the benefits of your new software, however they are risky. The sheer complexity of a big bang ERP approach means that the risk of failure is high.

Big bang approaches can literally go bang...

You will also need to implement robust change management exercises to ensure that your business is able to adopt the new ERP system.

Phased ERP Implementation

The Phased ERP implementation strategy is the polar opposite of a big bang ERP implementation approach. Using this implementation strategy, a business will deploy selected modules in a step-by-step approach.

For example, many businesses will start by implementing finance and accounting first and perhaps in just one of their geographies or sites. They will then stabilize before implementing further modules and geographies. 

Pros & Cons of Phased ERP Implementation

Whilst this is a lower risk approach, it means that the benefits of your new ERP system are realized slowly. You will also need to pass data between your new ERP system and your existing systems, leading to productivity cost or regret integration costs.

Parallel ERP Implementation

Pilot ERP Implementation

A pilot ERP implementation is a low commitment approach in which a business will implement an ERP system into one of their entities or divisions to test the results. 

For example, a large multinational may running a large, monolothic legacy application across all of their entities. Although a legacy ERP is likely to be inefficient, it can also be risky and expensive to replace it. To decrease the risk of the transition to a new ERP system for the group, the company may choose to run a pilot ERP implementation in just one of its entities. This would allow them to trial the new software, build positive internal momentum and build up their own capabilities and skills neccesary for change.

Pros & Cons of Pilot ERP Implementation

Pilot ERP implementations are a great idea if you need to build your own internal capabilities and experience in ERP implementation. They enable your teams to stress test and build their skills which can enable you to succeed at larger scale ERP implementations in the future. 

A pilot ERP project also enables you to gauge how effective and beneficial an ERP implementation is and what benefits it has on your organization.

Following a pilot ERP project and adequate reflection, your organization can then scale up its ERP implementation.

Hybrid ERP Implementation

As the name suggests, a hybrid ERP implementation strategy is one where a company will use a blend of the aforementioned implementation strategies.

Hybrid ERP implementations are typically used when a company wants to minimise risk and maximise the efficiency of their resources. This can be achieved through mixing different ERP implementation approaches which are suited towards different segments of your business.