Enterprise Resource Planning (ERP) systems are perhaps the most prevalent system across the vast majority of sizeable businesses. Making a major change or upgrade to an ERP system is akin to open-heart surgery and is one of the highest-risk IT system changes that can be embarked upon. A combination of system and data complexity, integration with other systems, and impact on business process makes ERP system upgrades long, costly, and high risk.
At the final point of implementation, large amounts of data typically need to be migrated through an Extract, Transform and Load (ETL) process. This is the point where large swaths of the organization move from an ‘as is’ set of processes to the new ‘to be’ way of working.
Since large ERP changes are relatively rare, perhaps occurring once a decade for an organization, the skills don’t typically reside in the organization. Consultancy support for ERP is big business - small to medium-sized businesses can expect to pay between $75,000 and $750,000 for implementation. Costs for large businesses range from $1 million to $10 million.
The combination of rarity, mixed internal and external teams, and complexity means that the implementation is usually rehearsed many times before the event itself. The level of risk is high and it is estimated that 75% of all ERP projects fail to meet their budget and scheduling goals. They are also expensive; the implementation of a web-based ERP system can cost from 100 to 250 percent of the software license cost, according to ERP advisory firm Software Advice.
How can we improve the chances of success?
Cutover allows for a more collaborative way of working, greater visibility, and better communications which all contribute to a more successful system upgrade. Cutover has been used by large enterprises to reduce the risk, time and cost involved in upgrading their critical systems, including ERP.
A large UK retail bank used Cutover for their ERP upgrade. Previously they were experiencing implementation failures due to poor planning and execution and they needed to reduce the risk of failure or downtime for such a large system upgrade. Cutover provided a collaborative way to plan and execute the system upgrade and also allowed them to run plan walkthroughs multiple times as simulations in preparation for the event itself.
Cutover has also been used by a global retailer with $3.7bn in revenues to update its critical technology systems. They needed to upgrade their major systems while eliminating as far as possible the risk of a system outage. Before using Cutover they were facing the possibility of a multi-week outage, but through improved coordination and better simulation capability, the preparation time and outage time were significantly reduced.
ERP system upgrades are one of the most high-risk IT system changes, but Cutover can help to reduce the level of risk, cost, and time needed for a successful upgrade. Pre-event run-throughs are more dynamic and useful in Cutover than running through a list on a spreadsheet. Collaborative planning and execution across a mix of remote and colocated teams is made simple because they are all working on a single plan on one collaborative platform. Cutover also provides visibility and context to keep everyone on the same page and working on the latest information.