The Key to Successful ERP Implementation for Fashion Companies

According to McKinsey's annual State of Fashion Report for 2024, the fashion industry is looking at a tough year ahead. With climate change and political instability threatening supply chains, and digital-first fast fashion retailers radically disrupting the seasonal trend cycle, 2024 is sure to bring new challenges for luxury and non-luxury brands alike. Greater agility and more resilient supply chains will be critical for brands looking to stay competitive — that's where enterprise resource planning (ERP) software comes in. 

Ensuring a strong ROI on your solution hinges on your ability to effectively manage the ERP implementation life cycle. Companies that pass this test will set themselves up for long-term success in the ever-evolving fashion landscape.

Understanding the Role of ERP in the Fashion and Apparel Industry

An enterprise resource planning (ERP) solution is a comprehensive software suite that helps companies better manage every level of their business model, from initial design to release. The technology has been a staple in product-driven businesses since the early 1990s, when the decade's dramatic shifts in manufacturing required new solutions for ensuring products reached their destinations on time.

What Is ERP Implementation?

The meaning of ERP implementation is the process of purchasing and integrating an ERP system into your company's workflows. This process also usually involves replacing existing workflows with new ones for greater efficiency and cost savings. 

How Is ERP Used in Fashion and Retail?

ERP developers can configure their solutions to meet the needs of a number of different industries, including fashion. Some of the most important use cases for ERP software in the apparel industry include:

• Simplifying returns and orders
• Improving on-time delivery rates
• Tracking warehouse and store inventory in real time
• Enhancing customer service
• Streamlining supply chain management
• Accelerating time to market for faster trend cycles
• Analyzing sales trends and generating accurate forecasts

A Step-by-Step Guide to Successful ERP Software Implementation

As with any new project, ERP system implementation requires thorough planning and foresight to pull off. Remember to keep everyone informed through all ERP implementation phases. Regularly updating your stakeholders on your progress — even if you experience delays or other roadblocks — is essential for maintaining their support.

1. Assemble Your Implementation Team

Change management is all the more effective if you have the right people on board to take on a project. Before beginning the implementation process, it's critical to establish a well-rounded team who will be responsible for managing the project and testing your new system. Typically, your team will include:

• An executive member of senior management to lead the project.
• A project manager to develop and oversee the project timelines and budget.
• An IT manager to coordinate between your company and your ERP vendor.
• A user team to fulfill all other domains, such as sales, finance and manufacturing.

Select team members based on expertise rather than job titles — they should be able to plan company changes while simultaneously preparing for future growth. Look for those who can make informed judgments on which parts of your business model to shift and which ones to keep the same.

It can help to survey team members' quality of input to ensure they prioritize solutions that help the organizations as a whole. They should be open to hearing different perspectives, then bringing them together to a point of convergence.

2. Complete a Gap Analysis and Determine Your Goals

A gap analysis helps you identify your core objectives for any project. To perform one, assess your existing technology and processes, looking for any areas where you can make improvements. These “gaps” will inform the rest of your implementation process. 

Important areas to pay attention to include:

• Accounting
• Budgeting
• Sales and marketing
• Manufacturing and production
• Data management and reporting
• Inventory management
• Supply chain logistics
• Sales forecasting
• Customer relationship management (CRM), if applicable

2. Define Project Scope and Outline Your Roadmap

Your project scope includes all the goals, tasks, costs, deliverables and deadlines that will be involved in your software implementation. It's important to document this list in a scope statement during the planning phase so you can keep your project team focused once you begin the real implementation process.

Now, it is normal for your scope to change slightly as your implementation process progresses. Accounting for some change early on can help you prevent excessive delays and roadblocks later on. Clear communication and transparency are also essential for managing your stakeholders' expectations.

Some key questions to help you define your scope include:

• What metrics and KPIs will you need to track?
• What data will you need to transform and integrate?
• What are the specific business objectives you want to accomplish with your ERP?
• Who are your key stakeholders and what are their needs and expectations?

Once you know what you need to accomplish with your ERP, you'll need to create a timeline. Break the process down into each individual task and estimate how many work hours it should take, then add up all the hours to determine how long the project should take to complete. This final estimate will serve as the basis for your project roadmap.

It can help to complete this step with either a qualified ERP consultant or your software vendor's in-house implementation team. These individuals are intimately familiar with the process, so they can provide excellent advice on setting realistic goals and timelines. 

3. Research and Select an ERP System

The final stage in the planning phase is to choose which ERP system is best for your company. Implementing an ERP system that can accommodate various apparel-specific parameters of design, invoices and production steps is imperative for several reasons:

• Configuration fatigue: An industry-specific ERP comes with features designed for your business, minimizing the need for additional customization.
• Support: Because your vendor knows the industry, they can answer questions for entities at every level of the value chain. 

Other key considerations to make when comparing different ERP solutions include:

• Integrations: Data needs to flow seamlessly across your tech stack for business to run smoothly. Look for a holistic solution that integrates with your existing data and systems for best results.
• Scalability: You'll want your software to be flexible enough to quickly adapt to increased demand if your business grows. While cloud-based solutions are typically slightly easier to scale than on-premise solutions, both can work well.
• Reporting: Advanced reporting and analytics capabilities allow you to harness the full power of your business data by providing greater visibility into every level of your organization. Additionally, data visualizations and smart insights make it easier to keep stakeholders informed.
• Automation: Intelligent automation capabilities take the burden of repetitive tasks like data entry and payroll off your employees' shoulders so they can focus on core business tasks.

4. Configure and Optimize Your System

While an out-of-the-box solution can work, it's essential to configure your new system to fit your company's unique needs. Configuration involves adjusting system parameters to work within your environment — for example, you might change the system language and time zone.

Customization further optimizes your ERP to improve your company's specific business processes. An ERP designed for fashion and apparel companies will provide many of the capabilities you need, minimizing the necessary customization on your end. 

5. Cleanse and Migrate Your Data

When your master data is distributed across multiple systems, it's difficult to correctly forecast your company's needs. Ensuring you migrate only relevant, clean data from your legacy system makes for a smoother transition to the ERP, speeding up conversion time and minimizing setbacks after your go-live date.

This process is typically complex, as reformatting data to fit a new system requires a specific skill set. Some important tasks for this step include:

• Categorizing data entry: Decide how exactly you should enter data and consolidate your formatting requirements accordingly. 
• Deleting excess records: Remove discontinued and out-of-season items from your system to reduce the amount of data you need to move.
• Closing inactive client accounts: You can remove records of companies that have either folded or stopped buying from you.

6. Test, Test, Test

Although ERP systems are complex, they're also highly adaptable. Due to this versatility, you'll need to complete a series of repeatable tests to ensure you have all the necessary processes in place before the official roll-out.

Your in-house ERP implementation team will design scenarios and simulate running the business in a closed environment. To ensure that all your information migrates well, choose and import both static and dynamic data during each test cycle. You'll need to verify all the migrated data before each round.

Be prepared to make many adjustments between each round of testing. Additionally, make your tests more sophisticated with each round to account for every potential situation your ERP could encounter.

7. Train Your People

Training is an essential part of any software implementation because it helps you ensure your employees can use the tool to accomplish what they need to do without taking extra time to correct preventable errors. 

Taking an incremental approach to training and roll out can help you ensure each group gets the chance to learn the functions they need before it goes live. It's also a good idea to designate “super users” — employees who learn the tool first so they can coach the end users in their respective departments.

Because everyone is at a different place when it comes to technology skills, designing different learning programs for specific learning personas can help you accommodate everyone's needs. Some examples of the different training methods you might use include:

• Online courses
• One-on-one mentoring sessions
• Classroom instruction
• A combination of all of the above

Whatever methods you choose, setting a realistic training schedule is essential. End-user training typically takes place at the very end of the ERP implementation process, and rushing this step to meet deadlines will add excess pressure. Prioritize training alongside implementation, scheduling around normal daily tasks whenever possible.

8. Roll Out Your Solution

Finally, it's time to roll your new ERP out to your entire organization. Key tasks to accomplish during this phase include:

• Ensuring the system is accessible to all users within the organization
• Activating automated processes
• Setting up reporting procedures
• Monitoring data accuracy and integrity 
• Initiating core workflows

Remember to remain agile even past your go-live date — you may need to make minor adjustments as you learn what works and what doesn't.

Post-Implementation — Maintenance and Support

Implementing an ERP isn't a once-and-done process — it's a cycle of continuous improvement and routine upkeep that ensures your system functions correctly after the initial project completion. 

Typically, your in-house team will be responsible for keeping up with ongoing maintenance if you choose an on-premise solution. This situation is advantageous for companies that prefer to have more control over their software.

When you use a SaaS ERP solution, your software vendor will be the one responsible for maintenance and updates, which can help free up your IT team to focus on value-added tasks. 

Common Challenges Faced During ERP Implementation

While non-tech sectors like fashion are increasingly adopting advanced IT tools like ERP, certain challenges come with the implementation process. Companies must understand the amount of work involved in a successful implementation to reach their project goals.

Some of the most common ERP implementation risks include: 

• Lack of stakeholder buy-in: Without the support of your key stakeholders — including your end users, customers, vendors and company leadership — it's much easier to fall off track during implementation. Engaging them early and frequently is key.
• Scope creep: When you keep adding new tasks and capabilities to your scope, you can easily lose track of your original objectives, resulting in costly delays. Scope creep can also potentially result in ERP implementation failure.
• Unclear or unrealistic timeline: Without a well-planned timeline, the project can easily become disorganized and fall behind. 

Overcoming Obstacles to ERP Implementation

Effectively planning out your project and assigning a dedicated team can help you minimize these risks and ensure you meet the full potential of your investment. Working with your software vendor's team can also help you ensure you have the most complete picture of what your ERP implementation methodology should look like so you have a clear model to follow.

Additionally, communicating with stakeholders throughout the project can help you minimize ERP implementation cost overruns and maintain their support, which is essential for lasting success. 

Fashion Industry ERP Implementation Best Practices

Following these best practices can help you ensure a smooth implementation and improve your chances of lasting success.

Managing the Risk Factors in ERP Implementation for the Apparel Industry

Before beginning your ERP system implementation, it's essential to conduct a risk analysis. This process will help you identify and plan for all the potential risks you may face during the implementation process. Then, in the event these risks do appear, you have an effective strategy to minimize their impact and keep the implementation process rolling.

Adapting and Measuring Success

Even after a successful implementation, you need to measure your system's effects to prove its value. Concrete, quantifiable data, such as revenue increase and cost savings, are the easiest to measure because they provide hard evidence for your ROI. 

That said, qualitative data can also help you justify your investment. Soft benefits like customer experience improvements, brand image and employee engagement can help you understand whether your new software is making the impact you want it to.  

BlueCherry^® ERP Drives Results for Leading Fashion Brands

If your company is looking for an innovative ERP designed for the fashion industry, BlueCherry^® Suite may be the solution for you. Our comprehensive solution is available both in the cloud and on-premise, so you can choose the configuration that best suits your business model.

See how BlueCherry^® can help your brand weather the coming storm. Contact us today to schedule a free demo. Our sales reps will walk you through the solution and answer any of the questions you may have.