8 Steps to a Successful ERP Implementation for Fashion & 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. If you are unsure of what an ERP system is, consider reading this article first.
ERP systems are quite vast and are built for a number of different industries. Fashion companies should, therefore, ensure that 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.
Despite emphasis on adopting advanced IT systems in non-tech sectors, approximately half of ERP attempts fail. Underestimating the laboriousness of implementing an ERP system can be the cause of its failure. However, being prepared with as much information as possible and creating the right support during implementation will yield great return on investment.
1- SELECTING 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 impact your business positively 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- CHOOSING THE IDEAL IMPLEMENTATION AND TRAINING PARTNER
The next step after selecting an ERP system provider is to choose an ERP implementation training team. Predictably, the ideal implementation partner is your vendor. The ERP vendor’s in-house implementation and training team will already be experts on the software’s intricacies. Alternatively, you may opt for an extraneous ERP consultation team. However, beware of the following:
- An outside implementation team may not be experienced with the new ERP system and may need additional time to familiarise themselves with it, extending 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 an external implementation team may add more costs to your company.
- You would need to expend time and effort into finding 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- INCORPORATING CHANGE MANAGEMENT CULTURE WITHIN THE ENTERPRISE
During the process of implementing an ERP system, a company will have to undergo changes in its culture that will have to be managed by its leaders. Identify who in the company will be affected by the changes from the 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.
- 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- DATA CLEANSING
Before an ERP system goes live, first comes the daunting task of data cleansing. You will likely find that master data is 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 the data cleansing process 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 the new ERP system.
5- ASSEMBLING THE RIGHT INTERNAL ERP IMPLEMENTATION PROJECT TEAM
Change management is made all the more effective if the right team to take on an ERP implementation is assembled. Forming a competent, well-rounded group can make the ERP testing process seamless since 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 who your ideal team is 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 who will lead the project; a project manager that will develop the project and maintain timelines and budget; an IT manager responsible for coordinating the processes between the company and the ERP vendor; and the user team who fulfill all other domains such as sales, finance, manufacturing, etc.
- Select people based on their expertise, and 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.
ERP systems are complex, yet adaptable. Because of this versatility, a series of tests need to be repeated in order to effectuate the system perfectly. Be sure to:
Choose and import both static and dynamic data during each test cycle. This ensures that not only permanent information like vendors and inventory items migrate adequately, but to also evaluate if changing information such as accounts payable and inventory is functioning during simulations too.
Be prepared for many adjustments to be made 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 implemented ERP goes live, it is time for the user team to become well-versed in the new system. End users need to be trained in their respective department in order for them to effectively do their jobs. There are a few considerations to take into account:
- 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 is an effective way to teach, aim to create video tutorials, manuals, try hands-on practice and other forms of instruction.
- Provide enough time for training. End users’ training will, more often than not, take place during the final stages of ERP implementation; that period will also probably be taxing and highly pressured. It is important, however, that training is prioritized alongside the implementation process, not to mention normal daily tasks.
8- ADAPTING AND MEASURING SUCCESS
Fashion ERP systems have been developed with best business practices for the apparel industry in mind. Therefore, not all of your company’s former methods can be carried over, especially when they are not in line with said best practices. In order 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 the organization. The following are some of the 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 and 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.