The increases in efficiency, reductions in cost and greater availability of management information promised by business software vendors can be vital to the future success of a company, particularly in the current economic climate.
However, all too often, companies find that new business software doesn’t deliver the level of improvements they were expecting. Furthermore, the price of achieving those improvements is often much higher than anticipated with companies finding that implementing a new business system is not just more costly than expected, but more difficult and time consuming.
Major issues that can affect business software system implementations:
- Expected benefits not fully realised
- Costs of the new system outweigh the benefits
- Implementation costs a lot more than expected
- Implementation takes a lot longer than expected
- More staff time required than expected
- New system never implemented
- Serious problems, which impact the business, when start using the system
- Staff reluctant to use, or don’t use, the new system
The implementation of a new business system into a company is all about integrating it into the business processes of that company. Whether your new system is in the ‘cloud’ or running on one of your own servers, the way in which you implement (or integrate) it into your business is key to its success in delivering the expected returns on investment.
This article outlines key factors that will help you avoid the major issues associated with implementing business software systems and make sure your implementation is successful.
1. A Clear Business Case
Being clear about why you are putting the new system in and what you want to achieve by putting it in, is fundamental to the success of the new system. The goals, objectives, desired benefits and scope of the new system need to be determined right at the start, and must be well thought through and clearly defined to ensure they are realistic and mean the same to everyone. It is this business case that underpins and drives the whole project. It provides the justification for all the time and money that will need to be spent and gets the buy-in from management.
A clear business case means you know how much it is worth spending on a project, because you know what the returns should be. It also means the project team understand which aspects of the new system are essential to have, because they will help deliver the required benefits. Having unambiguous, well thought through objectives and scope from the start means they are less likely to change during the course of the project. Changes to objectives and scope usually require rework and additional work, which in turn results in the project taking longer and costing more.
If the business case is not sufficiently well thought through and clearly defined at the start, you risk not achieving the benefits and returns on your investment that you were originally hoping for.
2. Management Commitment
Management will have to make staff available to work on the project, which in turn is likely to have a detrimental effect on their normal job and the operation of their department. Management will also have to be involved in the project, for example, in the redesigning of processes and procedures. Management also need to understand the implications of the new system for their area of the business and for their staff.
Having the support of management for the new system is therefore vital to the success of the project. It is also very important that one senior manager should have ownership of the project and the responsibility for getting the buy-in and support of others (i.e. championing the project), if necessary.
Without the commitment, understanding and involvement of management, not only are the expected benefits less likely to be achieved, there is an increased chance that the new system will not be used, or that the project will be abandoned and the system never even implemented.
3. Great Project Management
Also critical to a successful implementation is good project management. Implementing a new system is a relatively complex project, involving changes to processes and procedures, as well as setting up and learning how to use the new system. Thorough and detailed planning is essential before the project starts and close tracking and good control of the project is vital when it is underway. Thorough planning ensures realistic timescales and budgets are set, and the amount of staff time required is known. Good control ensures timescales are met and that costs don’t escalate and outweigh the expected benefits.
Without a sufficiently experienced project manager to oversee the whole project, not only is there a danger that the implementation will take longer, require more staff time and cost more than was expected, there is also an increased risk that problems will be experienced when the new system goes live. Serious problems with a business system can damage the business itself.
4. Excellent Project Team
A good project team is also crucial to the success of a new business system. The team should consist of appropriately skilled and experienced representatives from each of the affected business areas and IT.
The implementation team are important because they, together with the project manager, put together the detailed implementation plan and then make sure it’s carried out. The team make decisions on behalf of the people they are representing and get assistance and involvement from their department when necessary.
If the team isn’t up to scratch, unrealistic timescales may be set. Any poor decisions that are made could cause delays to the project, or even cause problems when the system is up and running, as can not getting timely assistance and involvement from the appropriate departments.
5. Appropriate Software Selected
The business software selected is fundamental to the success of the system. Undertaking a thorough evaluation of potential solutions and suppliers is vital in making sure that the most appropriate software solution is chosen.
If the chosen solution is a poor fit to the needs of the business, the expected benefits are less likely to be realised in full. If the chosen solution doesn’t do everything required, it will need to be adapted to fit the business or the business will need to be adapted to fit the solution. This could result in the costs outweighing the benefits. This situation is also more likely to lead to problems when the system comes on line. In extreme cases, a poor fitting solution can lead to the project and the new system being abandoned.
6. Prepared for Change
The introduction of a new system will inevitably mean changes to the way in which some people work. Not only will they need to use the new system, but they are likely to have to follow new, possibly less flexible, processes and procedures as well.
Preparing people for the changes that the new system will bring and getting their acceptance can be challenging, but is also vital to the success of the project.
Providing thorough training is crucial here, as is getting the affected people involved in the project early on. If people are not properly prepared for the changes that the new system will bring, and you don’t have their buy-in, they may resist using it.
Senior managers often don’t appreciate that the introduction of a new computer system could change the way the company operate, and see the implementation of a new business system as an IT project. However, since the purpose of the project should be to improve the business, the implementation should be driven by the business and change management activities included in the project.
7. Comprehensive Training
Training is generally recognised as being fundamental to the success of a new system. As well as making sure people know how to use the new system, it is also crucial for gaining their buy-in.
Training needs to be done prior to the system ‘going live’, but not too early or it will get forgotten. Training will also need to continue throughout the life of the system. Staff may still need help when they start using the system for real and, once the system has been up and running for a while, refresher courses may be needed on particular areas of the system. New starters will also need to receive training.
The cost of training can be quite significant and needs to be included in the implementation budget. The cost of training is also often underestimated, but if people don’t receive sufficient training they may not use the system properly, or at all. If this happens, the full benefits of the system are unlikely to be realised.
8. Accurate Data
In order for the new system to capable of delivering the expected benefits, the information it holds must be accurate. This means making sure that information, whether transferred from old systems or entered directly into the new system during implementation, is correct and complete. The same applies to information transferred in from other systems or entered directly, once the system is in use. It also means that information in the system must be kept up to date.
Inaccurate data will reduce the usefulness of a new system and therefore its credibility and acceptance. ‘Rubbish in, rubbish out’ as the saying goes. It’s essential that the implementation team and users are educated in, and appreciate, the importance of accurate data.
9. Sufficient Testing
It is vital that the new system is thoroughly tested before it goes ‘live’ to make sure everything is set up correctly and working as expected. Testing should involve taking a process from beginning to end, for different scenarios, and include any manual parts of the process to make sure testing is complete.
Testing needs to be planned to ensure that nothing is overlooked and so that an appropriate test system can be set up. The amount of testing necessary, and the amount of time required to do it, is often underestimated. Planning the testing first will also give a better idea of the effort required.
Thorough testing before the system goes live greatly reduces the chances of finding any major problems with the system when it is being used for real. Problems that don’t surface until the system is ‘live’ could cause serious disruption to the business. It’s much easier and less costly to resolve any issues before people starting to use it for real, rather than afterwards.
10. Planned Go Live
It is essential to plan how the new system is going to be rolled out across the company, and how use of the old system is going to be brought to an end. The rollout plan should include a contingency plan in case unexpected problems mean the old system has to be returned to at any point during or just after go-live. Whether or not the old and new system need to be run together (in parallel) for a limited period should also be considered.
Planning the rollout will help make sure the go live goes as smoothly as possible, with fewer issues, meaning less disruption to the business and less likelihood of resistance or rejection of the new system.
It is also essential to consider, well in advance, how the system will be operated, supported, maintained and improved once it has gone live. Thinking about this and putting appropriate plans and measures in place will help ensure that the system operates smoothly from day one, and as a result is more likely to achieve the expected improvements and returns.
11. Realistic Performance Targets
A system implementation is generally considered to be successful if the new system delivers the benefits that were highlighted in the business case. In order to assess whether the new system has delivered the benefits, appropriate performance measures and targets need to be established. In order to make sure the system continues to deliver the benefits, it is important that the business is monitored and measured against appropriate performance targets throughout the life of the system, not just in the early stages.
It is also essential that these performance targets encourage departments and individuals to use the new system; and that people are openly rewarded in some way when targets are met. Setting these targets at the start of the project can help gain commitment and ensure the system is implemented successfully.
It’s important to note that the benefits of a new system may not be seen until users start to become familiar with it. This could result in dip in performance at first and so performance targets and expectations need to be managed accordingly.
The improvements delivered by a new business system can transform a company and be the difference between success and failure. However putting a new business system in can be a very complex and expensive project with a certain amount of risk attached.
Having all of the key factors in place, as outlined in this article, will go a long way towards helping you avoid the major issues associated with implementing a new business system and ensuring your next business system delivers the expected benefits and returns on your investment.
Reference: E J Umble et al / European Journal of Operational Research 146 (2003) 241-257
For more information on how Greenbeam Consulting can help you make sure your next new business system is successful just get in touch via our website or give us a call on 0843 523 5630.