In the course of developing, deploying and maintaining an enterprise resource planning (ERP) system, businesses will inevitably need to incorporate some customization with code and applications.
However, IT departments also need to be sure they’re ready for core application changes.
Customization is key to creating an effective ERP experience, but sometimes it is difficult and expensive when updates come along. Not only can these updates be costly, but they can also be time-consuming to implement, spanning several months from start to live deployment.
According to Oracle, ERP updates span an average of six to twelve months. While disruptions to business may be minimal, the time, effort and resources necessary to accomplish these updates can be significant.
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Related Article: What Is ERP Software & How Can It Increase Efficiency?
Costly Mistakes in ERP Deployments and Updates
In some instances, mismanaged ERP updates will lead to costly or even catastrophic results.
For example, in a bid to mitigate the so-called “Y2K” bug, Hershey’s updated its SAP ERP, Siebel CRM, and Manugistics supply chain applications in 1999, but a botched implementation prevented the delivery of $100 million worth of Kisses for Halloween that year. This caused the company’s stock price to fall by eight percent.
It wasn’t until the following Halloween when Hershey’s was able to make timely deliveries when analysts and investors began to trust the company again.
Another Example: In 2000, Nike embarked on a $400 million upgrade to their supply chain and ERP systems. The approach intended to consolidate all the systems into a single system. Failure to properly deploy resulted in a $100 million dollar loss in sales, several class action lawsuits and a 20 percent decline in their stock.
Further, in 2004, HP decided to centralize all of its North American ERP systems into a single SAP system. While the project managers anticipated potential issues, they were unable to plan for many of those things occurring at once. These delays in implementation cost the company a whopping $160 million in order backlogs and lost revenue—more than five times the estimated project cost.
The series of small problems would have been enough to handle, had they each occurred individually. It was the “perfect storm” of issues that caused the loss to be so catastrophic.
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What The Experts Recommend
While ERP customizations help accommodate any special needs that a business may have, it can result in delays when patches or updates need to be deployed, as something will inevitably break along the way. As opposed to a customized approach, some experts would recommend sticking to standard code. Customizations should be kept minimal and within standards so that these will be compatible with future updates.
Also, best practices in ERP deployment and management dictate that thorough testing and code cleansing should be implemented during the patching, update and upgrade process. This ensures that the transition will go smoothly and that the system will not encounter severe issues once the platform goes live.
Tools and Resources at Your Disposal
There are a number of tools available to help mitigate the pains associated with ERP updates. First in mind involves engaging an enterprise automation platform such as Panaya, a cloud-based tool that automates the testing, code cleansing and bug tracking processes for ERP deployments.
IT departments and ERP consultants can automate the change management process. The platform goes through the schema of the current deployment and the planned upgrade, then gives recommendations on potential errors, pain points and required fixes.
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Platforms like Mulesoft and Metasuite, meanwhile, provide data mapping capability, which lets IT managers easily migrate data from one database to a new one. These tools have extraction, transformation and loading (ETL) functionalities that can help with migration or with other routine database works. You can take data from one source and either process it or transform it, so it works for use on another platform.
Data mapping tools, like Liquid XML, allow you to move data around more simply—for example, moving data from a contact field in one database, to a name field in another.
Image via Metasuite
Change is also best managed when the stakeholders involved have a clear delineation of responsibilities and tasks, and when the processor data flows can be clearly managed through a diagrammed process examination. Diagramming platforms such as Creately enable IT managers and ERP consultants to keep better track of this information.
Image via Creately
Ensuring Business Continuity
Platforms for enterprise automation, data mapping and process flow analysis are designed to not only speed up the process of making changes to an ERP, but to help ensure that updates, upgrades and patches are implemented properly.
These tools predict project scope, estimate resources, identify and fix errors, and test the applications without breaking anything. In the end, you get faster deployments and less time spent worrying about how to fix things that go wrong.
Being change ready ensures your business can continue to run smoothly even through the often painful process of change management. Testing automation, accountability and a clear process flow will ensure that the deployment of ERP updates will not cause havoc on the system.
Bear in mind, though, being “change ready” is more than using the right tool. It also requires the right attitude, mindset and strategy from your company to arrive at the best results.
- Minimize customizations in ERP deployments or keep these customizations within standard spec, to ensure best forward-compatibilityץ
- Test for potential errors or issues thoroughly, in order to prevent mishaps during update and once the system is liveץ
- Utilize automation, testing and migration tools readily available delivered through SaaS models.