So, you need a new ERP. Now what?

Enterprise resource planning (ERP) implementations can be messy, but ERP implementations for manufacturing companies are often messier. Although implementing a new software platform is a great leap into modernizing operations and cybersecurity, it typically comes with some challenges. Such was the case with Ulta Beauty Inc., which took this important step in March 2024 and had major setbacks as employees adapted to their new systems.

Most ERPs are built to standardize processes across multiple business functions, including production, shop floor, finance, sales and supply chain operations, operating as a “jack of all trades” for your business. However, for the ERP to perform optimally, it’s important to have the right software for your industry and ensure that your processes are configured properly so your data flows seamlessly from one team to the next.

Cloud-based ERPs and technological advancements are making personalization and configuration easier and more accessible than ever before. Beyond selecting the right software, selecting the right implementation partner is key. Industry expertise, manufacturing experience and deep knowledge of the complex nuances of the manufacturing ecosystem are critical to your success.

Taking time to thoroughly document your business requirements, prepare your data and set strategies for project management, data governance and training will help keep your project on the rails. Opting for a cheaper “vanilla” implementation won’t cut it for today’s manufacturers. In 2024, consulting firm Gartner Inc. found that as many as 25 percent of ERP implementations would fail catastrophically. Let’s make sure that yours doesn’t.

Promote ERP performance expectations from the get-go

OK, you've been won over by your chosen ERP software and partner, sold on their ability to eliminate manual production processes, optimize companywide efficiency and improve system security. But now it's time to get to the nitty-gritty. Where do you start?

Before beginning an ERP implementation, leaders must align their objectives and ERP strategies with the overall business strategy. According to Gartner’s report, 75 percent of the time, this is not the case, leading to confusion, lackluster results and poor user adoption.

Department heads and executives must collaborate and understand the priorities and bottlenecks within the organization. Which processes, integrations and workflows are most critical for day-to-day operations? Which will provide the greatest ROI? And which will require the most heavy-duty data cleansing and training? Understanding where the risks lie and what quick wins can be achieved will help build a successful migration strategy in phases.

It also helps to know how you plan on quantifying your new system’s ability to improve processes. Commonly tracked performance metrics include customer experience, standardization, IT maintenance costs, productivity, supplier interactions, real-time data, compliance and inventory levels. Monitoring these data points will help you show progress with the team and drive enthusiasm through all stages of implementation.

Facilitate data governance, backups and regulation

A staggering 78 percent of North American organizations said they don’t trust their data, while 72 percent admitted to not using data as a strategic asset. These all-too-common challenges stand in the way of competitive growth. Data issues are also among the top seven reasons ERP implementations take longer than expected, according to a 2024 report by Panorama Consulting Group.

To accommodate the new ERP and successfully migrate information, manufacturers must tidy up their data first. Migrating messy data from legacy systems into a new ERP can lead to errors, reporting issues and flawed decision-making. Garbage in, garbage out. Just like you wouldn’t build a house on a shaky foundation, a solid data governance strategy, including backups and security measures, is essential to protect valuable information from breaches and ensure data quality before the move.

It’s important manufacturers know where data resides, how it is used and who owns it. This makes it much easier to map data from old to new systems. Nevertheless, robust backups ensure that if something goes wrong during the transition, users can recover it without too much delay.

Once you’ve agreed on data maps, ownership roles, standards and quality procedures, data teams can begin migrating information. Document the origin, transformations and data movements to ensure traceability and accountability. Create a disaster-recovery plan to outline how to restore systems from backups in the advent of a software malfunction or disruption of any kind.

After migration, validate data accuracy, completeness and compliance with applicable regulations, such as the California Consumer Privacy Act (CCPA), Export Administration Regulations (EAR), U.S. Food and Drug Administration (FDA) regulations and Environmental Protection Agency (EPA) regulations.

Ensure user adoption, training and confidence

Successful ERP implementation often hinges on employees' willingness to get behind the new system. Just like the Ulta Beauty case, teams have to adjust to new capabilities and ways of working, which can disrupt key processes like inventory allocation in the short term. This can be discouraging for teams, and it is important they are mentally prepared. It takes about a year after going live for most (83 percent) ERP projects to start meeting ROI expectations.

To help ease this transition on your team, it’s helpful to involve them in trialing solutions, discovery calls and demos early in the vendor selection process. Getting buy-in and feedback from various department heads based on their unique system requirements is critical to project success. Coordinating demonstrations with your software partner that are relevant to your requirements and ensuring the right team members are present on those calls can help create a collaborative and cohesive transition.

Just as data-migration strategies often work better when segregated into small, controlled phases, it’s important both demos and training packages are digestible, too. Our brains can process only so much at a time; bombarding trainees with information overload can lead to confusion and difficulty retaining the key points. It's essential they have sufficient time to learn and apply that knowledge effectively — otherwise, you're left with an overwhelmed, potentially stressed team with lower productivity levels.

Look for manufacturing ERP partners who have extensive experience guiding complex manufacturing projects, training initiatives and user adoption. The right implementation partner will help keep your project on the rails, while saving time and money for your business.

Ensuring long-term scalability and growth

Rapid changes in consumer demand and global supply chain disruption make production schedules and inventory management as volatile as the weather. The ability to pivot quickly, scale to meet changing demands, shift production schedules and gain real-time visibility into companywide operations will empower your team to make effective decisions and stay on track to meet company growth objectives.

Implemented correctly, the right ERP, built for your industry, becomes a catalyst for growth and modernization. When done right, this newfound agility allows your team and manufacturing operations to conquer your competition, increase profitability and scale to new heights.