In the March issue of Innovative Thinking, we explained the key elements of the business case as a critical foundation for effective software selection and implementation. This month, we continue our ERP Done Right series - with an examination of two popular implementation approaches, Big Bang vs. Phased Implementation. Put your ERP Done Right articles together and you'll have a cookbook for great ERP results. Don't miss a single issue!
Big Bang vs. Phased Implementation. Which approach is right for you? By Paul Sita, Principal, Innovative IT Consulting, LLC. Paul can be reached at 631-549-1685 or firstname.lastname@example.org.
Why don't we just flip a coin? When it comes down to implementation, there’s always a heated debate about the “big bang”, in which most of the operations are cut over to the new ERP system on day one, vs. a phased implementation, in which individual functions or groups of functions such as finance or order entry are cut over one at a time
Column A and Column B.
Each side of this debate has avid proponents. Proponents of the big bang argue that while it involves more risk, it gets you onto your new platform sooner, and gives you only one place to make fixes. Therefore, the big bang ultimately gets you to the promised land faster. That's the right thing, isn’t it?
On the other hand, proponents of the phased implementation argue that a phased implementation gives the organization “time to breathe”, master the new system, and then proceed at an appropriate pace. This sounds right too. But not so fast, say the big bangers – for all that time that you’re on both systems or several systems, you’re missing out on the benefits of a single integrated platform. And if it takes too long, things may change and you may never get there. What then?
Risk. The stakes are high. What are the risks? People tend to joke about CIO’s losing jobs. However, failed implementations can have cause serious harm to companies. Aside from the significant dollars involved, loss of focus, loss of market share, devaluation of stock and poor morale all frequently accompany a failed, major implementation. Success is definitely contagious.
This is one of those situations for which the consultant’s answer - IT DEPENDS is the correct answer.
Big Bang vs. Phased Implementation. It’s not the answer that’s important, it’s the question. When we look at a specific client situation and try to formulate the right implementation strategy, many factors come into play. Is there significant benefit to getting onto the new platform sooner rather than later? The answer is not always yes.
Obstacles. What are the obstacles to getting onto the new platform? Is it training, change management, budget, technical hurdles, condition of the data? All of the above? If the hurdles are significant, if the organization is undisciplined, then regardless of the benefits and the need, a big bang may simply represent too much risk for the organization.
Organizational structure. Does the organization have many locations? Does the organization have several divisions and business units with different needs and business models? Attempting to standardize business processes across divisions is a worthy, but time consuming goal.
Business processes need tuning up? Is there a lot of business process re-engineering required in order to get fully implemented? If so, then the big bang may not work well. You should probably spend the time and resources to clean up those business processes prior to the implementation. One good model is one in which a dedicated BP team is established that precedes the implementation team through a series of implementation phases.
How long for the big bang? Sometimes sheer time frames mitigate against the big bang. If the complexity of your environment makes a single big bang a 2 year project, be very careful. Any project that long is bound to run into any number of issues, personnel changes, business climate changes, management direction. Better to execute short cycles, remain flexible and keep moving.
Small, big bangs – a third option. What’s a small big bang? If you have a small division, plant or entity, don’t overlook the possibility of implementing all core ERP functions for that entity. In essence a small, big bang. This can be quite effective.
If all this sounds like we’re down on the big bang, don’t draw that conclusion. In fact, here’s some situations in which the big bang is the perfect solution.
Starting from scratch? In many cases, if you’re implementing functions that had previously been manual the big bang can work quite well. On the other hand, if you’re saddled with years of old data, home-grown interfaces that aren’t going away, you have a much more complex task ahead of you.
Organization can’t handle ongoing projects. Some organizations can’t handle ongoing project type work. If this is your company, all effort needs to be put into the big bang, getting fully onto the new ERP platform. Otherwise, you’ll probably get stuck on phase 1 for a long time.
Summing up - define success and make it happen! Ultimately, it’s simply a matter of being realistic and assessing the risk/reward ratios. Some organizations have a higher tolerance for risk. Some, because of their industry, public stature or just their culture, have less tolerance.
Define success, and then make it happen. Don’t forget success does not always mean the same thing. Success should be measured against YOUR stated goals and objectives.
And if you need help, call Innovative, the ERP experts.
Pilot a project to success!
By John Pellegrino,Principal, Innovative IT Consulting, LLC. John can be reached at 631-549-1685 or email@example.com.
In this month’s feature article we discuss the “big bang” implementation versus the phased implementation approach as part of our ERP Done Right series. However, for those that are beyond implementing a new ERP system the concepts discussed can still be applied on a smaller scale. You may be facing the same questions for a project that will extend your ERP, for example you may be adding Document Management, Business Intelligence (BI) or Customer Relationship Management (CRM) functionality.
Something you can swallow. The daunting task of a “big bang” for one of these projects may be more than your company’s “mind” (or “body”) can bear. I suggest you consider a pilot project (not to be confused with a conference room pilot) to get you started. Maybe there are a set of documents that are most critical to your organization or one type of data that gives you great benefit from BI analysis or one business unit that can utilize CRM with great results. The point is to pick some subset of the whole implementation that will help get you educated on the technology and provide some immediate ROI to the organization.
A bite, not a crumb. I have two points of caution if you use this approach. One, make sure you pick a large enough subset to gain significant exposure to the technology and reap meaningful ROI for the company. Two, keep the full implementation in mind when architecting the solution so that you implement any software or hardware in a fashion that will scale later on.
Webinars are coming. Our IT success webinar series will be continuing. Keep posted for our next sessions.
Word Scramble time.
“An implementation approach that involves going live on different functions over a period of time." (2 words)
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H D L P T M I I P N E N E T O S E A M A
Answer to last month's word scramble.
“A statement of reasons and benefits for an ERP initiative." (2 words) (BUSINESS CASE)
In May we'll continue ERP Done Right when we discuss Engaging with vendors for a successful engagement.
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