Hiring staff to implement and operate an ERP
Buying and setting up an ERP is a software project. And yet people are a vital element of the project’s success, both during and after the implementation phase.
The number of people required largely depends on the size of the company. A small business moving to ERP for the first time may not need to hire any additional staff at all during the implementation phase. However, they are more likely to need more staff in the finance team post-implementation to get the most out of the ERP.
For a larger business the requirements may be reversed; more staff during the implementation but no additional headcount afterwards, although some staff may have reallocated tasks.
This guide provides advice on how to staff an ERP project to reduce risk, maximise chances of success and to get the most value out of a major investment in IT infrastructure.
Hiring staff for an ERP implementation
One of the most important factors that determines the success of an ERP project is how well a company can explain how it operates. Often this requires more effort than expected because a lot of knowledge about business processes is not written down. Employees just “know” what to do.
This makes it difficult for an ERP software vendor or partner to reproduce those processes in the ERP. The ERP consultants need to have multiple conversations with company staff to discover the minor details in processes that have a huge impact on the quality of delivery.
For example, a food manufacturer of baking goods was configuring an ERP for its delivery process. The baking staff showed the ERP consultant how many croissants and bread sticks they baked each day, and the delivery points and times for customers. The ERP was set up to pass the details of the sales orders to the bakers so they knew what to bake, and the locations of the customers to the delivery drivers so they could plan their routes. However, the first time that the ERP managed the baking to delivery process it was a disaster. The bakers hadn’t told the ERP consultant that the bread needed to cool for a number of minutes before the delivery drivers boxed them up for delivery. The bread that day arrived at the customers dense and water-logged, prompting angry calls from cafe and restaurant owners.
A common scenario in ERP implementations is that the finance team is overworked trying to complete regular business activities, and has little time to give to the ERP consultant. This can cause major problems with the implementation as the finance team typically needs to play a central role in configuring the ERP. Omissions or errors in processes can also cause havoc with financial reporting.
One ERP consultant reported that a finance team took two weeks to close month-end reporting. The accountants could only work on the project two weeks every month which caused huge delays, increasing the cost of implementation.
A way to solve this problem is for the company to hire temporary accounting staff on secondment to perform the business-as-usual activities such as month-end reporting. This frees up the permanent staff to share the finance processes with the ERP consultant and set up the ERP correctly.
Hiring secondment staff is not always required. A well-staffed or highly automated finance team may have enough capacity to spare to advise the ERP consultants. For example, a car-repair company with 30 garages managed to move to an ERP without needing to hire additional staff. However, the CFO running the ERP project had previously implemented ERPs in two other companies. He had a lot of experience at documenting processes and transferring them to an ERP.
Do I need to buy time for key employees?
An ERP touches every part of a business. Accordingly, you need input from every department on the business processes they follow to complete their tasks. If the warehouse team is not involved in defining processes for handling inventory then there is a greater probability that the ERP won’t fit their needs.
In most deployments the finance team will typically have the heaviest involvement. Companies that run on ERPs use the finance function as a reporting and planning centre rather than just data processing. Most departments will require reports of one type or another, from the boardroom to the warehouse floor. The finance team typically takes responsibility for ensuring that the ERP is collecting the right information at regular intervals to produce timely reports.
Here’s a process for determining whether you need to hire staff to get the processes right for your ERP.
Review your capacity
- Review the state of your processes. Are they written down or live mostly in the heads of key employees?
- Review the workload for key employees in your finance and operations departments. Do they have a minimum 10 hours a week to work with an ERP consultant?
- If your key employees are unable to allocate time to the project, contact a recruiter to find supplementary staff for the duration of the project.