ERP Implementation Strategies

Most enterprises implementing a new ERP system adopt either the big bang strategy or the phased roll-out strategy to guide their transition. While the big bang strategy is potentially quicker and less costly, the phase roll-out strategy is potentially safer and more stable. However, the company’s final choice will depend on its size and a number of other key factors.

The big bang strategy

Under the big bang approach to ERP implementation, the enterprise shuts down the old system, and goes live with the new system, all at once.

Potential advantages

The most obvious advantage of the big-bang implementation strategy is the quick cutovertime. Because the transition happens all at once, the company minimizes problems association with a prolonged transition period, such as low morale and reduced performance. Assuming the big bang strategy is successful, the quick transition time will also result in significant cost savings. For example, the company will not need to invest in the temporary interfaces that a phased roll-out would require.

Potential drawbacks

The greatest potential drawback of the big bang implementation strategy is the increased risk of problems with the new, relatively untested, ERP system. Most notably, if a system failure occurs after the sudden cutover, the business may find it impossible to go back to the old system. Comprehensive testing is also more challenging under the big bang approach. Finally, staff may have difficulty handling the sudden change.

Overall

The big bang approach may work well for single-site and single business-unit ERP implementations. This may translate roughly to SMEs, where the risks are lower and the cost savings most needed.

The phased roll-out strategy

Under the phased roll-out ERP implementation strategy, the various modules and aspects of the new ERP system go live in carefully-planned, progressive stages.

Potential advantages

The clearest potential advantage of a phased roll-out is that it reduces the risk of system failure. Comprehensive testing is also easier. Moreover, the smoother transition puts less pressure on staff, and reversion to the legacy system remains possible at nearly every stage of the roll-out.

Potential drawbacks

The phased roll-out strategy’s longer transition period comes with higher costs. It also requires careful planning and custom engineering to coordinate old and new systems during each progressive phase of the implementation. For example, software engineers may need to develop custom software and temporary user interfaces that bridge the new and old systems during the phased roll-out. From a human resources perspective, there is also the risk of staff becoming frustrated with the inevitably sub-optimal working conditions that result during a prolonged transition period.

Overall

The phased roll-out strategy may work best for multi-site and multi-business-unit implementations. This may translate roughly to large enterprises, where a smooth, low-risk transition is a higher priority than saving time and money.

Other strategies

Although the big bang and phased roll-out strategies are the most widely discussed ERP implementation options, there are other strategies that enterprises have successfully adopted. For example, there is the parallel-adoption strategy, whereby both ERP systems run in parallel during the transition.

While this approach presents lower risk and lower strain than the big bang approach, it is also faster than the phased roll-out approach. However, the parallel adoption strategy requires that employees perform duplicate data entry during the transaction period, which can contribute to costs that are higher than either the big bang or phased roll-out approach.

Although most enterprises choose a primary ERP implementation strategy to guide their transition, many supplement their primary strategy with various aspects of rival approaches. For example, an enterprise may adopt the big bang strategy for all essential ERP modules, yet adopt the phased roll-out strategy for non-essential modules.

Making a decision

The big bang strategy and the phased roll-out strategy are the two most widely discussed and adopted strategies for implementing new ERP systems. Under ideal conditions, the big bang strategy is quicker and less costly than the phased roll-out strategy, and may work best for SMEs with a single location. On the other hand, the phased roll-out strategy provides for a smoother, more stable transition than the big bang strategy, and may work best for large enterprises with multiple locations. However, enterprises looking for a compromise between these two opposing approaches may choose the parallel-adoption strategy, or opt for a combined approach.

2019-01-03T01:11:02+00:00

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