8 Steps to a Successful ERP Implementation for Fashion and Retail Companies
Most businesses would benefit from the implementation of an enterprise resource planning (ERP) system that effectively manages its complex daily needs whilst acting as a powerful tool for growth. This is particularly true for the retail, footwear, and apparel industry.
ERP systems are quite vast and are built for a number of different industries. Fashion companies should ensure the systems they are considering are specifically tailored to their industry and needs. Implementing an ERP system that can accommodate various apparel-specific parameters of design, invoices and production steps is imperative. Additionally, your ERP should connect to all the various business applications, such as product lifecycle management, business intelligence, shop floor control and eCommerce tools.
Despite emphasis on adopting advanced IT systems in non-tech sectors, there are challenges involved in implementing an ERP, as with any new technology. Companies should not underestimate the amount of work involved in implementing an ERP system. Being prepared with as much information as possible and creating the right support during implementation will yield retailers and fashion brands great return on investment.
1. SELECT THE RIGHT VENDOR
Selecting an ERP software vendor is one of the most important decisions to make for an apparel business. Taking the time to select the ideal system for your business will make for a clean, swift implementation. After all, you want a system that will positively affect your business by contributing to greater speed and productivity.
If you are within the apparel, fashion, footwear or accessories industry, the vendor selected should cater specifically to this market. This recommendation is paramount for a number of reasons:
- Your company will avoid the pitfalls of too much software customization that may result in error and will ultimately be more costly.
- When composing a Request for Information (RFI), the vendor should be able to answer hundreds of questions with your type of business in mind. An apparel manufacturer will need different ERP databases than a fashion retailer, for example.
- The ability to obtain references from peer companies within the retail and apparel space will inspire confidence and ensure a harmonious fit between your fashion business and an apparel-specific software vendor’s core competencies.
2. CHOOSE THE IDEAL IMPLEMENTATION AND TRAINING PARTNER
After selecting an ERP system provider, the next step is to choose an ERP implementation training team. The ideal implementation partner is your vendor, whose in-house implementation and training team will already be experts on the software’s intricacies. If you opt for an outside ERP consultation team, beware of the following:
- An outside implementation team may not be experienced with the new ERP system and may need additional time to familiarize themselves with it, which extends training time. This is doubly true if the outside implementation team does not have a fashion and retail background.
- The cost of ERP implementation and allocated hours can be arranged between you and your ERP vendor. Contracting with an external implementation team may add to your costs.
- You will need to spend extra time and effort to find an external ERP implementation partner. This time can be saved by continuing your partnership with your ERP vendor. Moreover, after establishing a professional relationship between your company’s personnel and your ERP vendor, you would have to start anew with an outside ERP implementation team.
3. INCORPORATE A CHANGE MANAGEMENT CULTURE
During the process of implementing an ERP system, a company will have to undergo culture changes managed by its leaders. You should identify which teams in the company will be affected by changes from a new ERP system and guide them to embrace this change. Consider these steps when developing your change management strategy:
- Communicate to the group about the upcoming changes, making sure to explain the benefits the new ERP system will bring to the company and, most importantly, their daily work.
- Give clear instructions about everyone’s roles within the new direction that the company is taking. Speak with members of the team about their concerns to help alleviate them and to prevent them from rejecting change down the road.
- Establish “ERP Champions” and/or engage influencers to help mentor and help embrace the coming enhancements.
- Provide the team with frequent updates to foster feelings of progress and triumph and reinforce their merit and work to fortify ERP in the company’s culture.
4. CLEANSE YOUR DATA
Before an ERP system goes live, you must first cleanse your data, which is a necessary step in any business application implementation. Your master data may be distributed across multiple systems. Correctly forecasting your company’s needs and bringing only pertinent, clean data from your legacy system guarantees a more successful transition to the ERP system, speeds up conversion time and minimizes setbacks after the go-live date. A few tactics to facilitate data cleansing include:
- Making appropriate determinations – Decide exactly how data should be entered and subsequently consolidate spelling, abbreviations, addresses, etc.
- Trimming accumulated fat – Determine how long products should be kept on record. It helps to remove items that are no longer manufactured.
- Eliminating inactive client accounts – Records of companies that have folded or have not been patrons for years do not have to be introduced to a new ERP system.
5. ASSEMBLE THE RIGHT INTERNAL PROJECT TEAM
Change management is made all the more effective if you assemble the right team to take on an ERP implementation. Forming a competent, well-rounded group can make the ERP testing process seamless; they can envision meaningful scenarios and anticipate obstacles. The team should be able to strategically plan changes to the company while preparing for its future growth. The following constitutes an ideal team and the qualities to look for when putting it together:
- The in-house ERP implementation team will typically comprise an executive member of senior management to lead the project; a project manager to develop the project and maintain timelines and budget; an IT manager to coordinate the processes between the company and the ERP vendor; and the user team to fulfill all other domains, such as sales, finance, manufacturing, etc.
- Select people based on their expertise, not their job titles. Seek those who can determine which parts of the business model can shift and which ones must remain unaltered. Choose people who can ideally integrate everyone’s best ideas into their plan.
- Survey the team members’ quality of input. Choose members that prioritize solutions that help the organization as a whole. They should be open to hearing competing notions, then bringing them together to a point of convergence.
6. TEST, TEST, TEST
ERP systems are complex, yet adaptable. Because of this versatility, a series of tests need to be repeated to set up the system perfectly. Be sure to:
- Choose and import both static and dynamic data during each test cycle. This ensures that both permanent information (vendors and inventory items) and changing information (accounts payable and inventory) migrate adequately and function during simulations.
- Be prepared to make many adjustments after the initial test; then, run the test again. Tests become more sophisticated with every round, and the in-house ERP implementation teams need to design scenarios and simulate running the business.
- Arrange to have well-developed master data by the final phase of testing. During this phase, ERP integration tests will rehearse and execute a go-live, consolidating inventory, sales and purchase orders, etc. The goal at this point is for the ERP system to fully perform the lifecycle of your business.
Before the ERP goes live, the user team needs to become well-versed in the new system. End users should be trained in their respective department so they can effectively do their jobs. Here are a few considerations:
- Designate “super users” for each department. They will be the most qualified to coach end users and will have the most impactful rapport with them.
- Approach training from multiple angles. While a classroom-like method can be effective, you can also try video tutorials, manuals, try hands-on practice and other forms of instruction.
- Schedule enough time for training. End users’ training will typically take place during the final stages of ERP implementation; that period may also be taxing and highly pressured. It is important to prioritize training alongside the implementation process, not to mention normal daily tasks.
8. ADAPT AND MEASURE SUCCESS
Fashion ERP systems have been developed with best practices for the apparel industry in mind. Therefore, not all your company’s former methods can be carried over, especially when they are not in line with said best practices. To know the ins and outs of the company and where it is headed, it is important to be resolute about the best route for your organization. Following are some metrics used to measure success:
- Measure concrete numbers – Numbers are one of the easiest parameters to measure; these include straightforward revenue increase and cost savings, for example.
- Monitor KPIs – Observe production times, delivery and customer satisfaction for tangible metrics to record. These are also excellent indicators of how the ERP system is fulfilling the company’s goals.
- Qualify abstract benefits – Deliberate on and review intangible consequences, such as customer experience, public image / reputation and employee engagement.
The success of an Enterprise Resource Planning system’s implementation for an apparel or fashion company starts and ends with how well you plan and the choices you make during the process.
An ERP is a key part of an overall ecosystem that can ensure your brand’s success. Wherever you are in your digital transformation journey, best practices and insights can help. Our Strategies for Apparel and Retail infographic unveils four key strategies to fuel growth in 2021 and beyond.