How do you prepare for a NetSuite ERP Implementation project?
Before starting an ERP implementation project, it is worth carefully planning and preparing internally.
By Mikael Mäkitalo
NetSuite Consultant
Oracle’s NetSuite is the leading cloud-based ERP system. In Addovation, we are targeting to serve and implement NetSuite for customers who are targeting to expand their businesses from abroad. NetSuite provides great features and tools to roll and scale out business for new level.
If your company has decided to build the business using the NetSuite, Addovation is great partner to implement the new ERP system. However, before the start of the implementation project, it is worth to carefully plan and prepare internally for the start. I did research “How to prepare ERP implementation internally?” in my MBA thesis. As a basis of my research, I interviewed few companies and their employees about how the NetSuite implementation project went and what kind of services are expected from the consulting firm before the start of the project. The results include a guideline and best practices in the areas such as: 1. Managing change and ensure the positive work environment 2. Building the project team 3. Describing current business processes 4. Preparation of business data.
1. Change management before NetSuite implementation
The ERP implementation and a new system is always a major change in the company and its daily business. The new system and ways to work does not only affect the users but indirectly the entire organization, depending on the features chosen. The steps to successful change are:
- Communicate in a timely manner and often enough about the upcoming ERP implementation and as widely as possible within the organization
- Highlight and tell clearly the benefits of the new ERP system – avoid jargon
- Provide practical examples of how to improve business processes
2. Internal project team
The successful ERP implementation requires a skilled internal project team. The project needs an owner and manager who are responsible at the top level for the success and financial goals. The project manager should be familiar with the company’s business processes that are undergoing reform or that may be affected by the implementation of the new system. The project leads need decision-making skills to succeed, but also solid social skills as well as soft leadership skills.
Even if the project has competent management, the specialists in the business areas are the most important resource. The business specialists such as controllers, accountants and sales representatives are main users of existing systems. Listen to their experiences and ensure them a chance to define the needs and requirements of the new system.
The project owner and manager need a steering group to support. The steering group is responsible for the most significant business decisions during the project. Make sure the steering group has enough quorum representation for your business. The consulting company appoints its own representatives to the steering group. Usually, project manager or account manager and lead consultant.
The Guidelines for building a project team:
- Steering group – leads the progress of the implementation project and is responsible for the the most business-critical decisions. Serves as support for project management.
- Project owner – a member of the steering group who is responsible for the success of the project in overall.
- Project manager – leads day-to-day project work internally and the main contact in cooperation with a consulting company
- Project team – business area specialists with pro-change mindset. Understand also relations between other business areas and processes. Able to make smaller decisions in their own business area. Create a positive energy for change in the community and guide their colleagues in use of new system.
3. Describing current Business Processes
After the designating of the project team, the next step is to strive to describe current business processes and potential business areas for development. In terms of project preparation, it would be important to find a specialist who know the company’s core business processes and understands the relations between them. The ability to document processes is an advantage. The following business areas and requirements should be reviewed before the implementation project: accounting, sales & marketing, inventory management and integration needs with other current systems. Checklist of describing business processes:
- Designate a responsible person (e.g. project manager) who understands the needs of the business areas and is able to outline the business in overall
- Get to know the roles, work practices and habits of the company’s employees
- Involve business specialists – the best information is with the person who works on the topic on daily basis.
- Listen, ask & challenge specialists to consider how current practices and processes is currently running
- Describe business processes one by one. Focus on business areas and relations. Potential risks are often found at the interface of processes.
4. Processing business data for the new system
As a final step before the start of the project is review and preparation of current business data for the new system. Oracle’s NetSuite differs from traditional ERP systems in its cloud-based architecture, but also in its data. The easiest way to get started is with data structure of existing systems. The company’s chart of accounts is the key for successful implementation with all currencies and bank accounts. One of the major decisions is when to go-live with new system and how much historical finance data to import. In addition to financial data, another important area is the review of existing customer and vendor data and related transactions. Study carefully how and in what kind of form the data can be exported of the current systems. This step can be surprisingly time consuming and slow down your implementation project if it’s not started on time. Checklist for data review:
Finance:
- What kind of classifications are currently monitored and how are those generated for reports? Is there any need of new classifications or dimensions?
- “The best time” to implement the new ERP from a financial management perspective?
- The structure of the chart of accounts with different currencies and bank accounts and the needs of potential subsidiaries
- Needs for accounts payable/receivable processes.
- What kind of billing/invoicing methods does the company use for customers and vendors?
Sales & CRM
- Item/product management and pricing
- Current CRM solutions and integration needs – avoid duplicate data
- What kind of information about customers and vendors is currently available?
- Whether there is any data you would like to have in future, for example in terms of analytics?
- Find out the information needs of invoicing/billing in cooperation with financial management
Data management and integrations
- Integration needs and what kind of data is to be transferred between NetSuite and existing systems?
- Is there enough in-house expertise or is external help needed?
- What kind of users and roles are needed for the new system? How many licenses?
- The company’s security policies
Summary
The most significant problems and delays in ERP implementation projects are usually related to the data migrations, exceptions to the billing and payment processes and system-related integrations. Companies implementing NetSuite are often fast-growing, but in early stages, which is the reason business is quite poorly documented, for example finance management, in terms of item structures, inventory balances and sales processes. The cloud-based system such as NetSuite is relatively easy to implement, but the lack of knowledge of the company’s own processes and needs sometimes causes long delays in the project phase. With these guidelines, we at Addovation want to make it easier for our clients to prepare for NetSuite implementation projects and ensure that the system works as planned and with the goals set.
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