The final step in the implementation process is the day of system go-live. On this day, the manufacturing or distribution organization will switch from its former software system to a new ERP software solution to serve as the transactional backbone of the organization. On this day, all of the company’s former problems will go away, 100 orders above the daily average will be processed and shipped, and worker productivity will increase, on average, 75%. This is what any company who has just completed a software implementation should expect, right? Wrong. Initial system go-live is a critical step in the migration from one software system to another, but it is unrealistic for the organization to expect that all of its troubles will be solved on the initial go-live date. What then, should the organization expect on the go-live date in terms of customer orders, worker productivity, and return on investment?
From a customer orders standpoint, the organization should expect to enter, pick, pack, and ship customer orders on the initial go-live date. We frequently hear terrible stories in the ERP industry of companies investing six to nine months of employee time and money in a software implementation only to go live and not ship orders for another two, three, or four days, causing complete chaos for customer service personnel and the organization’s customers. I can honestly say that in nearly twenty years of business, we have been very fortunate to have every one of our customers ship orders on their initial go-live date. With sufficient testing and training, there is absolutely no reason why orders should not be shipped on the go-live date. That being said, companies should also expect the volume of orders shipped on the initial go-live date to fall slightly below average. Issues (hopefully minor) will arise, questions will come up, and some employees will not have a full, 100% understanding of the new pick, pack, and ship process within the new system; however, things will improve, the process will continue to be practiced, and overall operations will become much more efficient over time. One of our customers had an average of roughly 300 orders shipped per day under their old system. When they went live in January 2009, orders shipped fell to below 200 the first day of system go-live (a Monday), climbed above 250 the following day, and reached above 300 by Wednesday. Within two weeks after go-live, the company was shipping nearly 500 orders per day. Again, companies should fully expect to ship orders on the initial go-live date but should also expect to see an initial decline followed by a steady increase in shipping volume over the following weeks.
The organization should also expect overall worker productivity to decline on the day of go-live and then steadily increase in the following weeks. The transition from one software solution to another is not always easy for or widely accepted by the organization’s employees. No matter how much training end users receive during the implementation process, they are always going to have a multitude of questions upon initial go-live. They will, however, learn how to perform their daily tasks in a productive and efficient manner with the new software solution and will more than likely become more productive over the course of a workday than they previously had been under the old software platform. Workers starting to use a new ERP solution are like toddlers – they need to learn how to crawl before they can walk or run.
Lastly, what can the organization expect in terms of return on investment on the day of initial system go-live? The answer, bluntly, is nothing. Realizing a return on investment for purchase of an ERP solution takes time. Some companies, depending on the nature of their business, realize a return on investment in a variety of different ways and over a variety of times. Larger organizations can achieve a sizeable return on investment by eliminating staff due to streamlined processes and operations under the new software solution. One of our customers, for example, was able to eliminate 30% of its customer service personnel within 4 months of go-live due to improved visibility to customer information and more efficient order processing. Smaller businesses can achieve a return on investment through increased productivity, reductions in employees’ time spent on a given task, and improved inventory accuracy and data integrity. Even the task of closing an accounting period can save a CFO hours of time using a sophisticated and fully-integrated ERP system. Organizations of all sizes can and should achieve a sizeable return on investment. Such a return, unfortunately, is not going to occur on the initial go-live date. For more information on calculating a return on investment for purchase of an ERP software solution, click here.
Initial system go-live is a critical step in the overall implementation process. Companies should be realistic with their expectations but should also demand reasonable results from their software supplier. Orders should be processed and shipped, and end users should be sufficiently trained to make it through the day.