Any business facing a new Enterprise Resource Planning (ERP) implementation is faced with a fundamental decision: to adopt the new system in phases, or to implement it all at once in what is commonly called a “big bang” implementation. A phased-in implementation is particularly popular among medium and larger enterprises. The phasing may occur by location, region, area of function, country, business priority or business line.
Advantages and Disadvantages
So, what are the primary advantages and disadvantages of each approach? Many of the pluses and minuses of the two approaches can be identified within four simple categories: costs, organisational impact, risks and temporary interfaces.
1. Costs
A phased implementation is typically going to increase the overall costs for ERP consultants, and there will typically be added internal costs as well. A need to create temporary interfaces between old and new systems will add on the expenses.
2. Organisational Impact
It is natural to assume that the project team charged with carrying out the implementation will be rather absorbed in the process. This can have a impact on the organisation if it takes team members away from their normal day-to-day activities. On the other hand, a phased implementation offers the potential for increased confidence throughout the organisation as the implementation unfolds on a gradual basis.
3. Risks
The stakes are very high when larger enterprises attempt an ERP implementation all at once. The fear of something going wrong causes many businesses to refrain from this efficient but high-stakes approach. Risk assessment should include these considerations:
- If something critical goes wrong during the implementation process, it can be very challenging to revert back to the old system. The situation can quickly escalate to crisis levels.
- There is the potential for the business or its brand to be damaged during an "all-at-once" implementation if something goes seriously awry.
- Thorough testing may be quite challenging. Some components may not work together the way that they were intended to.
- Implementing a new system all at once can strain the IT department. If a large number of issues arise, they may quickly outstrip the IT department's ability to cope.
- By contrast, the phased-in approach allows an enterprise the luxury of isolating implementation by department, or by whatever category is chosen. Serious issues can be prevented from infecting or distracting the entire enterprise.
4. Temporary Interfaces
Of course, one “big bang” implementation completely eliminates the need for temporary interfaces. By their very nature, temporary interfaces tend to get expensive, and they offer no lon-term benefit. They are there to simply create a temporary bridge between the way things were, and the way things are going to be.
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