As part of the ERP implementation process, company leaders and other key stakeholders will likely want to confirm that the software is performing as expected. An audit can help provide insight into whether the implementation was a success.
Learning more about the ERP implementation enables the project leader to find out what the implementation team did well and areas where they should improve for the next major software implementation, such as missed requirements. The post-implementation audit can also provide guidance for how to address shortcomings in the ERP project.
Project leaders should consider including the following steps in a post-implementation ERP audit.
1. Examine overall company performance
New ERP software is expected to improve the company's overall performance. A new ERP system can lead to more efficient processes or better reporting and dashboards.
However, the project's scope affects the scale of the impact of the ERP implementation. For example, phase one of an ERP implementation plan might set the groundwork for future phases but provide negligible improvements in the short term.
The audit can help confirm how the ERP platform is performing in comparison to the initial plan.
2. Identify potential security issues
The audit should include a review of the ERP software's configuration to further examine how it protects company data, including data storage and encryption of data as it moves between users and the ERP system.
The audit could also examine the system's access management and the approvals required for a new user to access the system, particularly the approvals for accessing sensitive information, like personal employee data.
3. Evaluate data integrity
Auditing data integrity can potentially include examining data from the old system that is now stored in the new ERP platform. Evaluating data integrity can give insight into the success of the training users received, the system's overall usability and whether processes are working as expected.
For example, multiple employees consistently making the same errors may indicate a training issue.
4. Examine workflow approvals
The audit provides an opportunity to confirm that the system's workflows are adding value and users are following them.
For example, auditors may want to verify that the approval rules are configured correctly and users are obeying the rules. If the company requires a hierarchy of approvals for expenses over specific amounts, auditors should confirm that the approvals aren't taking too long, as delays might encourage users to conduct manual overrides. If manual overrides occurred, auditors should investigate who performed the override and whether that user was authorized to do so.
5. Perform a financial audit
The cost of an ERP implementation is often a significant investment, so the auditors may want to review the actual costs versus the budgeted costs.
Part of the audit can include confirming that all major expenses received the proper approval and the project did not include any fraud or spending irregularities. For example, auditors may want to confirm that project leaders and key stakeholders disclosed any personal connections with vendors working on the project.
6. Review key requirements
Since an ERP implementation project is so costly and involves a great amount of effort, it typically begins with the creation of a document that justifies the need for a new ERP system. The document may be a formal business case or be based on requirements outlined in the requirements documents.
In both cases, the auditors should use this document to evaluate whether the implementation has achieved the key requirements. For example, a company may have invested in a new ERP software to try to improve its inventory control, and an auditor's report can indicate whether inventory control has gotten better.
7. Confirm project approval processes
Auditors may want to review the steps that took place before and during the project to confirm that all necessary approvals were received. This can include reviewing the vendor selection process to confirm that the team followed all required steps, including avoiding any favoritism for a vendor or third-party contractor.
The auditors can also confirm that the team reviewed all milestones and received all necessary approvals before they moved on to the next step of the project.
This step is critical in a large implementation in which early problems can have a significant effect as the project progresses. Key stakeholders should review the project's status at major milestones to confirm that the project is on the right track and the team is adequately tracking and addressing major risks.
8. Close out a successful project
Auditors should confirm that the project was closed in accordance with company policies and procedures.
This process may include finalizing all working documents, receiving and recording all signoffs, and making sure all expenses are promptly paid.