- 19 September 2018
Cloud-based ERP systems are widely recognized as integral components to modern manufacturing facilities, and many manufacturers are making the switch to reap the benefits of the cloud. Moving from an on-premise ERP system to a cloud-based ERP system requires careful planning, as ERP impacts every aspect of your operations.
Before you make the transition to cloud-based ERP, be sure you understand the differences between cloud-based software and on-premise software. If you’ve confirmed that cloud-based ERP is the right choice for your business, it’s time to prepare your organization to make the move to a new software system.
In this post, we’ll cover the steps you should take to prepare for the transition to a cloud-based ERP system.
1. Understand the Difference Between Cloud and On-Premise
At its core, cloud-based means that the servers for your ERP system are hosted on the provider’s premises, rather than on your company’s premises. Your company accesses the ERP system remotely, while the provider takes on the cost and responsibility for maintaining the physical hardware. This has an effect on everything from the method of deployment and pricing of the system, to taxes for your business. Do your research to understand the advantages that cloud-based ERP can bring to your analytics, data accessibility, and the scalability of your business.
You should also familiarize yourself with the different types of cloud computing (e.g. public, private, and hybrid), as they have different advantages and require different setups. Building an understanding of cloud computing across your leadership team is essential for the next step.
2. Get Buy-In Across Your Organization
For a new software system to succeed, you must get the buy-in from not only your leadership team, but also your employees. A survey conducted by McKinsey found that company-wide ownership of change across the entire organization is the number one factor that contributes to the success or failure of change implementation.
Communicate to your leadership team and any stakeholders the value the new system will bring to the business. Outline the ways in which ERP will reduce costs for the business in the long term, by enabling your company to reduce inventory levels, unexpected equipment downtime, overtime hours, and time spent managing compliance.
When your company leaders are fully on board with the new technology, they can inspire the rest of your teams to adopt the system and maximize the use of its features. They can also be instrumental in leading the team through the transition from one software system to another, by keeping communication channels open for feedback between the employees on the ground floor and the executives.
You should also communicate to your employees the ways in which ERP will make their jobs easier; by helping them to access the data they need from anywhere, standardize best practices across the company, track customer orders and information, and gain better visibility into your supply chain to make informed decisions.
3. Plan for Organizational Change Management
An ERP implementation is a big undertaking, and it requires a well developed plan to manage the widespread change. Despite the well-recognized benefits of ERP and the manufacturing industry’s desire to use it, Gartner reports that 75% of ERP projects fail. This is largely due to a lack of planning ahead for implementing such a comprehensive software system. In fact, over half of businesses in Gartner’s report said there was a lack of transparency regarding the implementation process — and 37% cited that it was difficult for staff to adapt to the new technology.
Because ERP reaches every department, having an organizational change management plan is key before you even begin implementing the technology. This change management plan should include steps for clear communication with your employees, training sessions to teach your staff how to use the new system, and open channels for feedback as your employees adjust to the new features.
Organizational change management also gives you an opportunity to assess your company’s current policies and practices. Are there processes that can be streamlined? Are there areas where you can cut down on waste? Are there frequent bottlenecks at a certain point in the manufacturing process? An outside consultant can often help you achieve a bird’s eye view of what’s working well and what can be improved. This way, you can streamline and improve your processes before designing them into your new ERP software.
4. Find a Trusted Provider
Every ERP provider has their own specializations, whether that be in particular industries or a type of cloud implementation. With a thorough understanding of your company’s current situation, you’ll be better prepared to approach providers with a list of your needs.
The provider you choose should be able to:
- Understand your goals and provide the right solution, including customized features, to achieve them.
- Help you understand any security concerns you have, and implement the right measures.
- Provide training to your workers and have a support team that can address urgent issues as they come up.
At Cre8tive Technology and Design, we help our clients make the move to cloud-based ERP, at every step from planning for organizational change management to implementing and training staff on the system. Cloud-based ERP systems, when implemented correctly, can provide manufacturers with new levels of efficiency and insights. We’re here to make sure you don’t miss out — our expert team will answer all your questions, provide you with training, and help your facility get the most out of your new ERP from day one. Contact Cre8tive Technology and Design to learn how we can help your company make a smooth transition and enjoy all the benefits of cloud-based ERP.