- 9 November 2016
An ERP system is suitable for any business, from small to large in size. In small, growing businesses, an ERP system allows business owners to focus on their day-to-day and rest assured that they can scale without the growing pains that take down so many promising efforts. Medium-sized businesses can count on an ERP system to help them streamline their current processes and increase their efficiency, offering them the breathing room necessary to shoot for the stars. And in large businesses, the ability to track and analyze large amounts of data and interconnect different departments is crucial. ERP systems break down information silos and allow large businesses the ability to maintain the transparency and interconnectivity that is necessary to keep them productive. But ERP implementation affects each business differently, and a big bang approach for a large- or medium-sized business may not be suitable for a smaller one.
Big Bang vs. Phased
There are two standard strategies for ERP implementation. The strategy of the all-at-once, “big bang,” and a phased rollout approach. In a big bang approach, the ERP system is implemented and goes live throughout the company in one day. Before the go-live date, systems are checked, staff is prepared, trial runs are performed, and organizational adjustments are completed.
In a phased approach, an organization rolls out one part of the ERP system at a time, beginning at the core and then deploying additional modules in phases.
Benefits and Drawbacks of the Big Bang Approach
The big bang approach can be lower in operating expenses, as all other systems are replaced on a single day.
The return on investment is realized faster, as all departments go live at once and the time to implementation is quicker from start to finish.
Making everyone switch gears on one day requires a great deal of planning and preparation, and involves the upending of previous business practices all at once. This can put a damper on the general productivity of the company while the disruption takes place.
Converting all systems at once can be highly risky for a company. If something goes wrong, the process of reverting systems can be complicated, or at worst, unsuccessful. If systems do not smoothly convert, or if the staff is not fully prepared, a big bang approach can leave a business in a vulnerable position.
Benefits and Drawbacks of the Phased Approach
A phased approach requires the maintenance of the old systems in parallel with the new, and may require additional consultants or temporary interfaces be maintained while the implementation occurs, contributing to an overall higher spend on the project’s entirety.
Because systems can be slowly implemented and tested without pressure, and old systems can be cast off one-by-one, the ability to revert systems or make adjustments can lower the risk to the business. Employees also have more time to adjust, which in turn helps to keep the business running smoothly throughout the transition.
The return on the ERP investment in a phased approach is a much slower process, lengthening the time between system purchase and measurable benefit. And a phased approach can lose its motivation, causing the implementation to lag and delay the full deployment.
Each type of deployment has its benefits and drawbacks, and every business has a different appetite for the risks inherent in each approach. Neither approach is much more popular than the other, adding testament to the variability of preference. A phased rollout may suit small- and medium-sized businesses better than a big bang approach, as the impact on productivity can be riskier than a slower, more costly implementation. Taking a look at how much tolerance a company has for each benefit and drawback can help decision makers take the approach most suitable for their individual businesses.