There has been a huge confusion amongst the enterprises on which way to go – ‘Big Bang’ or ‘Phased’ when it comes to ERP implementation. The “big bang” ERP implementation strategy go-live instantly, where every module of an ERP system is implemented instantly. The other approach is to go stepwise implementation - whether by country, state, location, region, sites, and nature of business, functional area or by business preferences. For small enterprises the big bang approach is more feasible, whereas for complex enterprises some degree of phasing is acceptable.
Let’s find out which way to go and the related benefits and disadvantages associated with both the implementation processes.
1. Risks Associated
In ERP ecosystem big bang implementations is considered as riskier affair than phased implementations due to following reasons:
- Reverting to the old system is difficult in case anything goes wrong. There’s a ‘no return point’ in this implementation from which reverting back is not possible.
- Risk of serious damage is more, just because there are many aspects that can go wrong. The failure in one section can have serious reverse effects elsewhere.
- Complete testing is quite tough to perform; and there is always the possibility that the separate elements may not work together on switching to a new system.
- This process may place a great strain on other segments of the company, which may include the IT department and the system vendor etc.
On the other hand, the phased approach focuses on discrete business segments, so chances of any serious problem are limited. In this approach reverting to an older system is easier. Temporary interfaces between systems are required in this phase. Lower the number of interfaces, lesser the risk of failure.
2. Multiple Business Segments
It could be complex to deal with multiple sites or business units, which the business may have. In a phased approach it is easier to manage multi-site or multi-segment implementations.
It is advisable for an organization having multiple huge websites across a location to opt for a phased approach to implement ERP solutions.
The only exception to this could be those enterprises that have satellite or regional sites dependent on the hub. It can be easier to opt for the big bang phase for such enterprises and it may go easy with this implementation phase due to the interdependencies involved.
3. Temporary Interfaces
Phased approach requires interim interfaces to offer a temporary working solution. A temporary interface is an association between two systems required temporarily until the complete ERP is implemented. Temporarily built interfaces are expensive to implement, and, by their nature, they do not hold any term value. They are just temporary kiosks for implementing the entire process.
4. Time Slot
Every project is driven by some deadline and time constraints. On average, the phased approach takes longer compared to the big bang approach in terms of elapsed time. Under these circumstances when it is measured in years and not months, project fatigue can be the issue, and it can also negatively impact the overall performance of the staff and enterprise on keeping it in a prolonged state of change or transition. Employee burnout and loss of concentration may become the risks associated.
Aspects like acquisitions, new projects, regulatory adherence, and capital expenditure programs can also impact the timescale for an ERP implementation. Before planning any ERP strategy these aspects must be considered as it all could influence the big bang versus phased decision immensely.
5. Effect on the Enterprise
Any such implementation can impact the overall performance of the project team and more on the enterprise; and the selection of implementation options can also make a huge difference.
A focused effort is necessary from the project team for the time slot of a big bang project, while the rest of the enterprise will only be engaged to any significant proportion just before it go-live. On the other hand, a phased approach means less strain on the project team as there’s not much to do in this. They would have more time to focus on other activities, to work on other projects or doing the regular routine tasks.
System support while the cutover and early live time, which is also known as the stabilization period, is of the essence. A big bang approach puts additional strain on the business and the project team in the time of cutover – just because there are so many activities going on simultaneously. It’s imperative to assess how much the project crew members can manage when planning for big bang approach over multiple regions, countries, or business units.
The big bang approach can develop a sense of urgency in the entire enterprise and create a momentum that cannot be possible to acquire in long-running phased projects.
A phased implementation can result in early yields, which develop confidence and help in selling the benefits to the rest of the enterprise. In addition, less experience in early stages can result in negativity in the ERP process, and in some cases the implantation plan can be undermined.
6. Costs Factors
Costs factors are the most prominent ones when it comes to taking any vital and critical business decision. Phased implementations may take longer and require more time from ERP vendors.
This means:
- Additional external expenses (on ERP providers)
- Additional internal expenses (where staffs of the project team is involved for longer, with the related expenses of backfilling that staff)
- Some other expenses for temporary interfaces
There can be occasions when a phased rollout can save on external consultancy expenses. For instance, implementing a complete ERP rollout region by region may require the project team to have some degree of expertise and experience to cut down the dependency on ERP vendors with the processing of the rollout.
It is advisable to have a minute contemplation on all the above all factors given your business needs, before actually selecting any of the two ERP implementation options for your own enterprise.