Tips for testing your new ERP before implementation

by | Jul 6, 2017

This time of year, some retailers and suppliers are testing and switching over to new ERPs in preparation for the holiday shopping season. July is probably about the latest you’d want to make a switch like that, as you don’t want to put the busiest time of the year at risk with a system that hasn’t had all the processes worked out yet.

When you choose a new ERP system, you’ll want to implement it with plenty of time to get everyone adjusted and fluent in the new systems and processes. Whether you’ve implemented a new ERP and are working out all the bugs, or whether you’re thinking about switching ERPs next year, you want to make sure you have plenty of time to get it all working properly.

Change management is really the most difficult aspect of implementing new ERP systems, and well – pretty much any major change. You want to make sure you’ve considered everything when plugging in a new ERP. The last thing you want is for a process to be unexpectedly broken because it wasn’t accounted for in the implementation process.

The change process needs to be planned and someone should be in charge of it. They’ll set the milestones along the way, convert the old processes and documents (order management process, item masters, document standardization, and so on), and take the time to do it carefully and do it right. The path to success for this changeover is measured in quarters, not weeks or months.

One important thing to note about change management is that in many cases, upgrading the technology is relatively easy compared to managing the people who will be interacting with the new system. Your employees are used to working with the old system, and are set into their routines of the existing processes. They may have even become accustomed to the time-consuming workarounds required to bypass system limitations. Despite the pain points motivating the system upgrade, humans are just generally resistant to change. You’ll have people who might be intimidated by the unfamiliarity or complain that they miss aspects of the old system. It’s to be expected, but with the right action plan, training and rollout, the benefits of the change will help them quickly embrace the system and process changes.

Another thing to take into account is how does the ERP connect to your Supply Chain? If the ERP is the heart of your company’s internal systems and processes, EDI provides the oxygen, handling the exchange of important documents like invoices purchase orders, advanced ship notices and more into your company and out to your trading partners. It’s not only the access to your customers, it’s your access route to revenue. If you can’t properly exchange your trading data, you risk lost sales, non-compliance fees, incorrect shipments, missed payment, and worse.

Your EDI solution will need to be configured to accommodate your new ERP and whatever new processes that result. If you have in-house EDI, your techs will have to make all of the necessary changes. When EDI is outsourced to a company like SPS Commerce, the EDI provider will work with you to align your EDI processes with your new system. Online or hybrid systems may call for cooperation between in-house techs and outside service providers.

When is your new ERP going live? The best time to rollout a new ERP is ideally during the low season when there are the fewest chances for disruption. For most retailers, that low period is after “return season” has finished up by mid to late January. Even so, the longer I work at SPS, the more surprised I am at the number of companies that roll out new ERPs in the 4th quarter, smack dab in the middle of the holiday shopping season. This may be the worst time to roll it out, because not only is there an influx of orders, but the deliveries are extremely time sensitive – if the package isn’t delivered on time, you risk angry customers and returned products. Late Q2 and early Q3 are also good times to rollout, depending on your products. Additionally, the back to school shopping season in late July to early September is a great opportunity for testing how the new system is working. If you haven’t rolled out your new ERP by the first of August, you’re taking a big risk that your system won’t be ready for the holiday shopping season.

Finally, define what “done” means. Are you OK with rolling out before every process has been implemented in the new ERP? Or do you want to have absolutely everything in place before the rollout? This should be decided as part of the change management plan.

Though depending on your business and what processes you’re holding over, which path you choose here can have an impact. If your ERP has changed over and your EDI is mostly in sync, you might be able to roll it out if you’re only shipping to distribution centers before you’re actually “done.” That way, you can do live testing and just grind your way through the bugs. But if you rely significantly on shipping one-offs to retail stores for customer pickup or drop shipping directly to consumers, your system really needs to be 100% ready before you roll it out. Otherwise, you risk making customers very unhappy and driving them to other retailers.

SPS Commerce has helped thousands of customers connect ERPs to our EDI system, as well as navigate the treacherous waters of an ERP change over. Visit the SPS website for additional information or to speak with an SPS representative.

Richard Schultz