What Is ERP Implementation? Process, Stages, Mistakes & How to Do It Right

Implementing an ERP system is a critical step for any business that’s aiming to unify their business operations, improve data accuracy, and support scalable growth.

The ERP implementation process is a complex process. This process involves a structured and step-by-step approach and careful planning. Hence, the next important decision after ERP Software development is the ERP implementation process. For this it is necessary that the ERP implementation methodology aligns with your business goals.

This article explains what ERP implementation process​ is and how it helps streamline business operations.

We cover the key steps: installation, configuration, data migration, and user access setup.

You’ll also learn the 5 main stages of ERP rollout, common mistakes to avoid, and the risks of not using an ERP system.

Lastly, we show how Gtech can support you with expert ERP implementation services.

So, let’s find out the initial planning and system selection to configuration, testing, and go-live, along with the benefits and challenges businesses should be prepared for throughout the lifecycle.

What is ERP Implementation?

ERP implementation is the process of integrating and connecting an ERP system with all business departments through a unified system. This multi-phase process includes preparing data, configuring workflows, and training staff for successful adoption, which is typically carried out over several months.

Successful implementation of an ERP system determines how well an ERP software will be able to meet a business’s ERP needs. An ERP implementation consultant considers all the needs of key stakeholders or users who will use the ERP system and trains them how to use the system and also conducts data migration, user information configuration,  and software customization tasks.

Let’s take an overview of things involved in the ERP implementation process.

ERP Implementation Process Overview

The ERP implementation process includes essential stages such as software configuration, data transfer, process mapping, and training.

The outcome of your ERP project depends on how well these steps are executed for successful deployment of ERP software. This is done by undertaking the ERP implementation process with an ERP expert.

The success of the ERP implementation process relies on timing, clear requirements, thorough testing, and disciplined project management.

The best time for conducting an ERP implementation process is when the implementation is done during the less busy period with precise planning and extensive testing.

All these processes are achieved through clear objectives and thorough testing to stay on track.

Small businesses (with less than $100 million in sales) took longer to set up their ERP systems than medium-sized businesses (with $100 million to $250 million in sales). This could be because they had fewer tools and experts to help them.

Image Source: Statista

The Statista survey found that by 2023, 33% of companies had experienced cost overruns for global ERP implementation projects. This is why you need to be through with all the ERP implementation stages so that you know which things to not overlook when planning to get an ERP solution.

ERP Implementation Process Steps

1. Installation Of ERP Software:
   Implementing and integrating ERP with the current systems. This step boosts the ERP system’s efficiency to ensure it meets the unique needs of the business.

2. ERP Configuration And Setting ERP System Business Parameters:
   To Align With Client’s Unique Business Needs. This step ensures well-defined user roles along with module setup and system workflow.
   
3. ERP Data Migration:
   Data migration in ERP involves the business data transfer from its original sources to the ERP Software database from different systems. This involves data storage in different formats into a single, common structure.
   
4. Role-Based Access For ERP Users & Secure User Management:
   To Set up employees (users) with defined roles, Assign appropriate ERP system access levels. Configure user-specific security settings.

The implementation steps are executed in line with the complexity of the business processes, the size of the business, and the chosen approach.

What Are The 5 Stages Of ERP Implementation?

ERP implementation is a critical initiative that enables businesses to integrate core processes with a unified software system. The five key stages of ERP implementation are Project Planning, software designing, ERP development, testing, deployment and ERP support. These 5 stages of ERP implementation ensure a structured and successful transition of business management to an ERP environment.

Stages In ERP Implementation Lifecycle

There are 5 stages in ERP Implementation Lifecycle, and each stage is crucial in ERP implementation.

1. System Selection And Project Planning

So which is the first phase in ERP implementation? It’s system selection and project planning. This is an essential stage of ERP development process, as it determines the project requirements and specified software features and also the ERP Software Pricing. Project planning phase is in ERP Implementation

• Discovering Client’s Needs For Project Planning
• Deciding on Type Of ERP Software 
• Identify Business needs, Goals, and Business Pain points
• Form an ERP Project Team and Assign Roles
• Research and Choose the Right ERP solution
• Defining the Budget and Project Timeline

2. Customizing System Design With ERP Solution Features

At this stage, the ERP specialist interacts with the client to identify the customized ERP features and modules, evaluates the gaps, and plans the data migration. This is done for clearly defining the user interface design and system capabilities.

So, if you are thinking, which phase is most difficult phase in ERP implementation? It’s obviously the data migration phase. This is why ERP implementation is a challenging task

• Ongoing Improvements As Per Feedbacks

• Map and Integrate Existing Processes to ERP System Capabilities
• Customize the ERP Modules to meet Business Workflows
• Plan for Data Migration and User Interface Design
• Set up Security Roles and Permissions

3. Development Of ERP Software

This stage involves the ERP Software being developed and designed with necessary ERP integration with other systems and developing training modules for staff.

• Configure the ERP Software as per Design
• Perform Necessary Integrations with Other Systems
• Conduct Initial Data Migration
• Develop Training Materials for Staff

4. ERP Testing & Deployment

Testing ERP software verifies and ensures that an ERP system is set up correctly, well configured, and functioning properly before its deployment.

• Conduct thorough system testing (UAT, performance, etc.)
• System Integration Testing (SIT)
• User Acceptance Testing (UAT)
• Functional Testing Of Module Features
• Integration, Performance and Security Testing
• Identify and Fix Bugs or Configuration Issues
• Train End-users on the System Usage
• Initiate the ERP deployment process to Go-Live (soft or full launch).

5. ERP Support And Maintenance

ERP support and maintenance is an essential, regular system review involving continuous monitoring. This also includes troubleshooting, patching, and other custom enhancements to ensure the system performs reliably, protects data, and scales with business growth. This stage involves the following ongoing improvements.

• Monitor System Performance and User Feedback
• Provide Ongoing Technical Support and Updates
• Continue User Training as Needed
• Optimize Processes Based on Real-Time Usage
• Types of ERP Maintenance Like Preventive, Corrective, Adaptive, and Perfective Are Also Adopted in This Stage
• Initiating ERP Go-Live Activities

The above ERP implementation strategies can be used to effectively implement ERP in your business management.

Common ERP Implementation Mistakes

Common ERP implementation mistakes include poor communication among stakeholders or Software users. Other mistakes include, setting up unrealistic timelines, Budget cuts, Ignoring follow-up issues, Inadequate staffing, Poor change enablement, etc.

Common Implementation Mistakes That Derail ERP Projects:

These are the challenges in ERP Implementation that can

1. Ineffective Communication
2. Overly Aggressive Project Timelines
3. Project Budget Constraints
4. Inadequate Staffing
5. Lack of Post-Go-Live Planning
6. Inferior Feature Selection
7. Neglecting Change Management

ERP Implementation Challenges

Your organization may face issues and risks when it does not focus on implementing an ERP solution. It is important to implement ERP in your business, or your business may face the following risks:

Risks of Not Implementing ERP

Choosing not to implement ERP software may feel cost-efficient in the beginning, but there are few risks involved. Following are the risks that your business might face when not implementing ERP software.

Disconnected Workflows

Non-centralized work processes can lead to chaotic work operations. Unstructured business operations cause delayed work processes and untimely delivery.

Lack of Live Data Access

Lack of necessary data inputs can cause faulty decisions and create business errors that can affect your business in the long run.

Legacy System Limitations

Old systems are not able to keep up with the faster pace, which can lead to system and work process failures.

Lost Competitive Edge

While the other firms keep on upgrading to stay in competition, a lack of an ERP system or delays in implementing an ERP can cause your business to lose its competitive edge.

Inefficient Data Reporting

This may result in delays in information retrieval and contribute to uninformed business decisions, potentially impacting your business considerably.

Resistance to Digital Transition

Resistance to digital transformation will hold your business and employees back from becoming upgraded with the technological advancements. This can lead to outdated business approaches that no longer work. This is the last phase in erp implementation life cycle​.

How Can Gtech Help You With The ERP Implementation Process?

To remain ahead in the modern technology-driven market, the enterprise must embrace its integrated systems that can reduce complexity and improve scalability. Gtech specializes in comprehensive ERP implementation services and guiding businesses through every implementation phase, from ERP development to its deployment. Our ERP Software Development Services ensure error-free integration, simplified user adoption, and maximum business management support.

Nandan Goda

My name is Nandan, the Owner at Gtech Web Infotech Pvt. Ltd.. I’m also a designer and developer. I’ve been working in the web development field for last 12+ years. Developing and implementing small to large-scale projects and everything in between. Currently working on a lot of CMS, dev-tooling projects. Furthermore focusing on combining Artificial Intelligence and Machine Learning with emerging technologies.