Planning for an ERP implementation is often difficult, and selecting the right implementation approach is an important part of that process. Project leaders must carefully evaluate potential approaches to help ensure project success.
Two potential approaches are the big bang approach and the phased approach. Each comes with pros and cons, so leaders must consider organizational needs, the project budget, the timeline and required resources. They should also consult the project team, the vendor, the implementation partner and key stakeholders.
Here's more about the big bang approach vs. the phased approach and the pros and cons of each.
The big bang approach
Pursuing the big bang approach can result in major rewards, but doing so is risky.
When a project team follows the big bang approach, the team configures the entire ERP system before go-live. The goal is to implement the entire ERP system and any supporting applications all at once, including migrating data and sunsetting the old systems right after go-live. The major benefit of this approach is that the project team completes the process in one phase, so employees can start using all the new functionality immediately.
With the big bang approach, the project team doesn't have to integrate old systems. Ideally, the team will only need to provide post go-live support as employees start using the new system and potentially discover issues.
However, the cons of a big bang ERP implementation are significant. Pursuing the big bang approach results in a project with very large scope, which increases the risk for cost, timeline and resources.
With the big bang approach, employees must wait until the entire implementation is complete to use the new ERP system, so they can't give feedback about the system that could potentially help the project team.
If the project team discovers significant issues during a big bang implementation, the team may have to pivot and move to a phased approach. If this is the case, they would have to redo many planning exercises, including determining new timelines, budgets and resource requirements. These unexpected planning activities will also negatively affect the project timeline because team members will have less time for implementation work.
The phased approach
The phased approach for an ERP implementation involves less overall risk but can still involve potential problems.
The phased approach brings several benefits to the ERP implementation process.
With the phased approach, the project team implements the ERP system in multiple phases, so company employees can access new functionality after each phase. Employees can give feedback about the new ERP system as the implementation progresses, which could potentially help the project team plan for future phases. For example, employees may ask the project team to implement certain functionality as soon as possible.
In addition, using the phased approach leads to smaller phase scope. The project team can more easily estimate the tasks and dependencies, budget, and required resources, and the smaller scope of the phases makes it easier to recover from unexpected issues.
Another advantage of the phased approach is that the project team depends on key resources for less time, which reduces the risk that a team member will leave the project before a phase is complete.
However, the phased approach has its disadvantages as well. While the phased approach helps reduce risk, the scope of one of the phases may still be very large. For example, the team may implement much of the new ERP system's foundational functionality during the first phase, which would include implementing many features to make the new ERP system viable. The scope of that phase would likely be sizable.
However, if the team implements too few features during the first phase, employees may feel dissatisfied with the new system, which could negatively affect adoption. Employees may also feel dissatisfied if the phased approach requires them to continue using old systems until the team has implemented needed functionality in the new ERP system.
In addition, the team may need to plan for and perform integration work to support old systems.