What is an ERP Project?

An enterprise resource planning (ERP) project is one that works to implement ERP systems in an organization, electronically syncing functions, processes, and departments into a system with shared data and accessibility. ERP systems, when correctly implemented and managed, can increase competitiveness, efficiency, and communication, thus improving the ability to make well-informed decisions. ERP projects attempt to complete ERP implementation in a specific time and budgetary period.

The ERP project life cycle begins with an understanding of the client’s process needs on various departmental levels. Initial research and insight into the organization can help structure the ERP solution around client goals and needs. The ERP project continues by collecting information about system requirements, offering pre-implementation training courses and conducting process mapping analyses.

When the information has been collected, the goals, milestones, and implementation schedules are often outlined in an ERP project plan. This sets the tone for the project and later establishes the success of the project. Implementation will include technological installation and configuration, customization of reports and forms, and archiving of historical data. Projects end with training and testing and are followed up with post-implementation support.

Successful implementation depends largely on the stipulations outlined in the project plan and goals. A project may be considered a failure when budget or temporal goals are overextended. An ERP project often has a high potential failure rate, which makes budgetary and time planning an essential part of the project plan. In moderately sized organizations, average cost to implement an ERP project can be as high as $70,000,000 US Dollars (USD). Estimated time of an ERP project is between six months and two years.

Successful implementation of an ERP project occurs simultaneously with daily business but can require significant additional resources from the same number of personnel. Small or medium sized companies often experience a difficulty meeting these additional requirements, thus presenting another risk for the completion of a successful ERP project.

The risks associated with the implementation of an ERP project can be technological, financial, or human in nature. Technologically, systems are risky in that many processing technologies are required to operate the system. These technologies, even when in adequate functional status, must correspond with specific industry and business needs. Changes in cash flow or the ability of the business to finance the projects can result in financial risks. Human risks are presented in the effectiveness of post-implementation strategy, education, and corporate attitude about ERP system adoption.