How to Build an ERP Project Plan and Timeline

An enterprise resource planning (ERP) implementation is a project that requires substantial time, intense commitment, and a variety of resources to create the desired return on investment. Small and medium-sized manufacturing and job shop businesses (SMBs) that take the time to plan an ERP implementation project from the beginning will be better equipped to deal with the inevitable ebbs and flows as the project progresses.

The length of time for your project will be contingent on several key variables, and this whitepaper provides a median duration from which you can adjust, based on the factors described. Determining how long the project will take is a key to its success; an inaccurate estimation could produce a schedule that gets thrown far off course and jeopardizes time, resources, and the go-live date. The major variables are available business resources, size and complexity of business, desired modules and features, deployment locations, ERP customizations, and data conversion.

Here we provide in-depth look at the steps and ERP implementation timeline to help you understand project goals and expectations before you get started.

Building realistic expectations is a ground-up process that involves everyone in your organization. To achieve the expected benefits from an ERP implementation, you must account for the technical aspects of the project and the people and process aspects. This involves weekly status meetings between business leaders and the implementation team, the latter of which includes members of your staff and your vendor’s staff. If this does not occur with consistent regularity, neither party will be held accountable for ensuring that milestones are met. All parties must come to terms with common expectations and priorities at the outset of an ERP implementation project.

Underestimating or over-simplifying the time and resources required during the implementation process can result in overly optimistic estimates. Clients are then forced to choose between cutting corners or absorbing unexpected costs midstream. You can avoid this scenario by educating yourself and your team through resources like this and benchmarks of what other companies in your industry, your size, and scope have been able to achieve. Talk with your peers about the factors that contributed to their success. Ask about change management and process re-engineering steps, in particular. Once you have your plan in place, track, and measure results following go-live with metrics that are aligned with your business processes.

What follows are the elements and schedule of a median-duration ERP implementation project for a manufacturing or job shop SMB.

The first step in an ERP implementation is to prepare for product and vendor selection by developing a comprehensive grasp of your organization’s needs. This involves conceptualizing all of your workflows, including engineering, manufacturing, shipping, selling, marketing, accounting, and administrative processes. Each of these business processes needs to be fully defined in writing so that they can be mapped to the capabilities of the ERP solutions being considered.

Once you have your processes clearly delineated, take a step back and determine what drives your company’s rationale for increasing efficiency in each of these processes? Is it wasted time, redundancy of efforts, unrealized quality or service expectations? Examine whether your organization’s culture is driven most by engineering and manufacturing, sales and marketing, or another area of your business. Your business needs are closely tied to your culture, though an ERP solution should help to correct cultural imbalances, such as one department dominating executive decision-making to the detriment of the business. The ideal is a solution that brings into balance the expertise all of your decision-makers.

In the second week of this stage, define the types of reporting and dashboard capabilities you will need by meeting with representatives from each department that will use the ERP solution. Determine the data points that will be needed as you monitor the performance of all aspects of your business, and each of your employees. What information would your leaders like to have constant visibility into through at-a-glance dashboards, and what reports would they like to generate on a daily, weekly, or monthly basis?

The final step in this stage is to come up with the exact number of business users in each department and to roughly define access levels on a scale of 1-3 (with 1 representing the highest level and 3 being limited to specific tasks). The vendor you choose will later work with you on refining this list to your precise business needs.

Learn more about this stage by downloading our report A Guide to Determining ERP Functionality Needs for Manufacturing SMBs.

The timing has never been more urgent for small and medium-sized manufacturers and job shops to embrace transformative technologies, including best-of-breed ERP solutions. Market conditions will likely be fluctuating in the near term, and smaller manufacturing organizations will need to improve operational efficiency in order to remain competitive. In order to influence a necessary transition, it’s up to you as a leader within your organization to act on your vision and to enable others to understand and implement it. The change your organization needs depends on your leadership in ensuring that the expectations, responsibilities, and value in transformation are be made clear to each employee and stakeholder.

Consider organizing your case by identifying the key stakeholders to which you will appeal. There are four main groups:

1. Users: Define each of the daily user groups and their pain points. What is holding them back from performing their jobs to the best of their ability? What is limiting their total group contribution to the success of your organization? How can an ERP solution enable them to be more productive and efficient, and contribute more to the bottom line? Furthermore, best-of-breed ERP solutions enable effective communications and transactions between company personnel, vendors, and partners who are also key components of this group.
   
2. Managers: How is the decision-making of the managers of each department being limited by your current solution? What information do they need visibility to via dashboards and reporting to operate at their highest levels of effectiveness? What are the industry norms for similar organizations operating with best of- breed ERP solutions? What are some examples for the managers of each department you can use to illustrate how an ERP would make them individually, and your organization as a whole, more productive, efficient, accurate, and competitive?
   
3. Executives/Leaders: Manufacturing company leaders today need tools to maximize supply chain efficiency, boost cash flow, improve resource utilization, modernize business processes, maximize inventory efficiency, improve customer service experiences, and ensure data security. All of these improvements can be realized with the right ERP solutions. Prioritize those most important to each of your business leaders and executives.

 
Finally, in a single compelling paragraph or two, define how the new ERP solution will be expected to evolve your business from what it is today into what it must become in order to succeed in the competitive landscape of the 2020s for your industry.

Learn more about this stage by downloading our report How to Champion an ERP Implementation for Emerging Manufacturing Company Leaders.

The business needs have been defined and the case has been made that a modern ERP solution would benefit each of the constituent groups: users, managers, and executives/leaders. In the sixth week, hold meetings with representatives from each group to ensure that the needs of each group are in alignment and that there are no conflicts or disagreements as to what information and capabilities are needed in an ERP solution.

Get specific in the vision of how the ERP solution will improve the ways in which your departments share information and coordinate workflows. This is the time to ensure that the visions of each of your leaders are in alignment and to prepare for the next step: determining the type of solution that will meet everyone’s needs and the exact system requirements.

This is also the time to delegate roles and assign meeting times. Who will be the organization’s ERP champion and hold everyone accountable to their individual roles, from the vendor to the people within your organization? This person will update company leadership as the rest of the schedule unfolds. Who will work with the staff trainers and be the point person within each department when subordinates have questions about the system?

The ERP champion will research available solutions within the industry and determine which modules and features are available to meet business needs, from departmental functions to specific tasks. Create a spreadsheet with tabs, rows, or columns for each business need and identify how each of the ERP solutions in your consideration set will meet that need. For each candidate solution, provide a sentence or two that describes why this solution applies.

• As you do this, think about how each candidate solution:
• Automates and streamlines processes
• Standardizes business operations
• Provides transparency and insights for informed decision-making
• Allows full, informed, and efficient production control
• Provides continually updated real-time accurate data
• Corrects bottlenecks and business inefficiencies

Many best-in-class ERP solutions for SMBs are modular in construction. There will be modules for each business function, from accounting, to engineering, inventory to shipping. Identify which providers meet which business needs, and whether they do so through modules included in the foundation ERP system, or whether these needs can be met through add-on modules or features. To the best of your ability at this point, try to get a sense for pricing of each system when it is configured to meet all business needs. Some vendors are more transparent with pricing than others, and you may need to make some phone calls. So that you don’t get bogged down in each vendor’s sales routine, explain your process so that you can get at least ballpark pricing estimates for the features you need to complete this step in your implementation.

Among the most essential specialized functional requirements for most manufacturing and job shop SMBs are the following modules or features:

Visual scheduling: This functionality enables you to implement a priority system that optimizes what is worked on and when, reduces WIP by managing when material gets sent to the job floor, and ensures the right amount of each product from raw materials to subassemblies to finished products.

Full quote to cash core solution: This functionality automates configuring price quotes, contract management, and revenue management, while avoiding the data entry redundancy that costs SMBs so much valuable time.

Job costing and reporting: With job costing and reporting functionality you can identify the full cost and profitability of a given job, identify which of your customers are placing the most profitable orders, and leverage an in-depth analysis of job and job-part profitability giving you the insight you need to increase revenue and reduce costs.   

Production control and shop floor management: With this functionality, you can share job information with your shop floor team, enabling you to monitor progress in real-time and manage production more efficiently. Dashboards and reporting capabilities provide business insights into production capacity, inventory, and equipment downtime. This functionality should also enable you to track labor and resource consumption, compare estimate-to-actual costs of jobs, and analyze and improve profitability per customer.

Native finance/accounting: This functionality integrates finances including accounts payable, accounts receivable, payroll, fixed assets register, and credit card processing into one secure system. The general ledger enables you to manage and report financial activities and capture and post transactions everywhere from production to shipping.

Employee time and inventory management: For SMBs, two of the costs that can be brought under control most efficiently with ERP are labor and inventory. Because this functionality integrates with all business data, you can much more easily optimize inventory levels and staffing levels to meet market demands while minimizing tied-up capital.

Quality management solutions: This functionality in best-of-breed manufacturing specific ERP solutions enables you to automate and customize your requirements for inspection, analyze quality data and trends, and review improvements. You can also custom-configure these features for your quality compliance needs.

CRM: Customer relationship management empowers your sales and marketing teams to grow your business through understanding and using sales and marketing data. A CRM module provides immediate access to real-time data and tools to support more profitable marketing campaigns, as well as departmental integration, communication, and traceability.

Integrated product configurator: This lets you configure products to your customers’ exact needs. You can design anything from a single-level bill of materials to complex multilevel products. You can also create and configure complex dimensional parts from quoting, order entry, job entry, and lead entry functions, if available.

Finally, distribute this spreadsheet internally for contributions, edits, and agreement about the features needed.

What often happens at this stage is that some personnel in the company voice concerns that the change will have negative consequences for their work or the coordination of their work with others. This is the time to take note of these concerns and parse out those that are legitimate from those that come from a general fear of change.

Hold executive meetings to discuss solutions to legitimate concerns and then talk with the departmental groups wherein there may be a fear of change. Present the expected benefits to their individual levels of efficiency and productivity and the benefits to the business and its customers, as well as the risks of not making this change. Talk about the expected cost savings, the changing competitive landscape, and how a modern ERP solution will position the company for greater success.

Consider the reasons you have for transitioning to a new solution: an incomplete existing solution, time consuming manual processes, system glitches, problems leveraging data for reports and analytics, poor integration between departments, and redundant work for your teams. Consider the strongest available ERP solutions and their capabilities for modernizing your respective business functions.

Assign a representative from each department and provide them with links to each of the ERP solutions in consideration. Ask them to research the solutions and how they would work to improve their departmental efficiency and productivity. Have them consider how this may change staffing needs or free up valuable personnel to move from time-consuming manual tasks to duties that maximize their potential contributions.

Then have them each departmental leader produce a 2-3 page document that describes the processes and tasks that will be improved and how.

On-premises solutions are not viable for most SMBs. They require the costly acquisition and setup of hardware including servers and desktop computers, and they take much longer to implement. Cloud-based or software as a service (SaaS) solutions require a lower upfront cost, fewer (or no) internal IT personnel required to implement, and are maintained and updated (including cybersecurity) by the vendor. Furthermore, cloud-based technology enables your executives and employees to work from anywhere at any time.

Unless you have a substantial investment already made in internal hardware, and have an IT department, the cloud-based choice will be the easiest decision in the ERP implementation project.

By this point, you have hopefully narrowed your ERP vendor candidates to 2-4 contenders. Talk with each of them about how they will clean the data (including removing duplicate data) and migrate. Ask them about the duration of their specific processes and what is involved. Inquire about times when previous clients have had unclean data and how they worked around challenges with data migration.

Once you have talked with the contending candidates, get a sense of how long the process will take and what internal resources will need to be committed to ensure a smooth transition. Without taking this critical step, there could be serious delays during data migration, especially if you are transitioning from an old legacy system.

Vendors can demo their products in a variety of ways, from evaluation software kits to in-person presentations, to online webinars. Involve as many of your departmental leaders as possible; have them get their hands on the product and determine which solutions best fit their needs before coming to a consensus as to which solution will be purchased for your organization.

Each user must be fully trained in the processes and tasks they will perform. An implementation partner (vendor) should have trainers available in person or via the web for live sessions, as well as materials to study and online homework or tests to take to ensure proficiency. The study documents should explain the purpose of the system as a whole and address each individual’s role in using the new tools, and their importance to the business. This process gets employees engaged with the system and ensures maximum ROI, since users will use the solution as it was designed.

In this final and exciting stage, your vendor will work with you to test the system, ensure that it works, iron out any glitches, and finally go live! It is advisable never to go live on January 1. Even though this may prevent renewal fees on an older system, a new implementation should begin when workloads are relatively light, not at the beginning of a new year or peak season.

A strategic planning selection process is essential to a successful ERP implementation, and ultimately, to innovating your business as you move forward. Because this system will integrate, manage and facilitate, and automate all your business processes, it is so important to plan a comprehensive implementation schedule.