What is the ERP Implementation Process for Charities and Socially Minded Businesses?

Enterprise Resource Planning (ERP) systems have emerged as a cornerstone of modern organisational operations. 

In the context of charities and socially minded businesses, these comprehensive software systems integrate various parts of the organisation, such as finance, grant management, fund management, budget to actual reporting, SORP and funder reporting, and constituent relationship management, into a unified digital platform. Crucially, they assist with aligning both internal and external stakeholders are the same numbers, rather than different teams, individuals and departments have disparate spreadsheets.  This is the ‘single source of truth’ (SSOT) model.

The role of ERP systems in streamlining processes, enhancing data visibility, and supporting strategic decision-making cannot be overstated. However, the journey to harnessing the full potential of an ERP system is a multifaceted one, and requires you to follow the correct ERP implementation process in business processes.

Check out our implementation service page to find out how Cloud Doing Good's approach can benefit you.

Introduction to ERP implementation

In today's rapidly evolving business landscape, where efficiency, agility, and data-driven insights are paramount, ERP systems have proven indispensable. 

The ERP implementation process stands as a pivotal phase in the life cycle of these systems, as it marks the transition disparate data silos and excel spreadsheets across an organisation to a more joined up approach within the organisation. Often, this evolution is characterised as finance or digital transformation.

This article explores the intricacies of ERP implementation, delving into its components, types, and challenges, while highlighting its undeniable significance for charities and socially minded organisations.

Understanding ERP Implementation

Defining ERP Implementation

At its core, ERP implementation refers to the systematic process of deploying and integrating an ERP system within an organisation. 

This involves a series of strategic steps aimed at configuring the software to align with the unique requirements of the organisation. 

From defining workflows to adopting the software and meeting the specific needs of the organisation (more on this later), the implementation process sets the stage for improved efficiency, collaboration, and data management. 

It's not merely about installing software; it's about reshaping the organisation's digital infrastructure to enhance its overall capabilities.

The Importance of Aligning ERP Implementation with Business Goals

One of the critical aspects of ERP implementation is ensuring that the ERP software matches the broader charity objectives.  In the charity context, where the focus is on mission outcomes as well as financial costs, the actual to budget reporting and data visualisation aspects are often crucial. 

A well-implemented ERP system should not only automate and streamline processes but also actively contribute to achieving strategic goals and the alignment of impact with the costs of achieving those impacts, in a transparent and easy to understand way.  This benefits internal stakeholders (eg budget holders) and external stakeholders (eg funders and grant making bodies).

Failing to establish this alignment could result in underutilization of the ERP system and missed opportunities for transformative growth in impact. Our implementation guide is a useful supplement to this article.

Types of ERP Implementations

In the realm of ERP implementation, various approaches can be undertaken, each with its own advantages and considerations. 

The Big Bang Approach

The Big Bang approach involves a comprehensive and immediate switch to the new ERP system across the entire organisation. 

The Phased Approach

On the contrary, the Phased approach implements the system gradually, module by module, allowing for a more manageable transition. Very often, the general ledger, purchase ledger and sales ledger, along with associated processes would be considered a good place to start.

The Parallel Approach

The Parallel approach sees the new system running alongside the existing one for a certain period, ensuring a fallback option if issues arise. 

The Pilot Approach

The Pilot approach entails deploying the ERP system in a single department or branch, testing its effectiveness before broader implementation.

The Suite Success Approach

The Suite Success approach entails taking leading practices from thousands of other organisations, including similar organisations and using this as a baseline.  Then exceptioning off this as needed for the particular organisation.  Normally it combines with ‘Financials First’, so getting the core financials (general ledger, purchase to pay processes, order to cash processes) running first, then stairwaying in additional processes over time. With a team of certified NetSuite consultants, the Suite Success approach is a surefire way to get the most from your ERP system. 

Here at Cloud Doing Good, we strongly favour and only use the Suite Success Approach. If you want to discuss this approach in greater detail, please feel free to contact us.

The Key Phases of ERP Implementation

Now that we have established the significance of ERP systems and their alignment with charity objectives, let's delve into the core stages of the ERP implementation process. 

These phases form the backbone of a successful implementation journey, ensuring that the chosen ERP system becomes a transformative tool rather than a mere piece of software.

1. Pre-Implementation Planning

    The first crucial step in the ERP implementation process is meticulous pre-implementation planning. This phase lays the groundwork for the entire project and involves:

    Assessing Organisational Needs and Selecting the Appropriate ERP System

    Before embarking on the implementation journey, organisations need to assess their unique organisational needs. This involves identifying pain points, bottlenecks, and areas ripe for improvement. Whilst every organisation is unique, often, similar organisations may have faced and dealt with similar challenges. 

    Therefore one of the absolutely key factors is whether to ‘build from scratch’ or adopt proven leading practices from a system already running similar organisations.  This is the ‘adopt not adapt’ question.  

    Here are Cloud Doing Good, we utilise an approach that is based on ‘adopt not adapt’, taking proven leading practices and then exceptioning as needed. 

    Assembling an Implementation Team and Defining Roles

    Implementing an ERP system is a collaborative effort that requires the expertise of various individuals.  A finance led approach to ERP implementation can be used, in which case ERP implementation becomes a tool for aligning the organisation simply and easily around ‘single source of truth’ numbers.  It avoids the costs and complexities of competing, self-generated excel spreadsheets within different departments and joins up both activity and measurement.  This can extend to both finance and non financial metrics. 

    Crucially, with a modern cloud ERP system, there is the possibility to view finance transformation on a cloud ERP system as a finance led project.  It is also possible to run a more traditional ‘IT led’ approach, particularly if the ERP software that is ultimately selected is either on premises or does not have a strong configuration engine, and significant ongoing IT resource involvement is likely to be needed.

    With some of the more developed cloud ERP systems with pre-built structure and a strong configuration engine, it may not be necessary to have a full time project team.  

    Whatever approach is used, clear roles and responsibilities need to be defined to ensure smooth coordination throughout the implementation process.

    Setting a Budget and Timeline for the Implementation

    Implementing an ERP system comes with financial and temporal implications. Establishing a realistic budget and timeline is essential. 

    The budget should encompass not only software licensing costs but also expenses related to customisation, training, and potential contingencies. A well-defined timeline helps in managing expectations and keeping the project on track.

    It is crucial to consider not just upfront software licensing costs but the maintenance side of the system, and in particular the costs that may be associated with new version releases.  A strong, modern cloud-based ERP system should include all new releases at no additional cost, including, crucially, customisation carry forward.

    2. Requirements Gathering and Analysis

      With old, traditional on premises software the next phase would be extensive and expensive requirements gathering and analysis

      This would involve:

      Identifying and Documenting Current Business Processes

      An organisation spending large amounts of time and cost documenting department's workflows, data flows, and interdependencies need to be mapped out in detail. 

      This understanding would then form the baseline against which the new system's capabilities will be evaluated.

      ‘Adopt Not Adapt’ Cloud ERP evaluation

      A more modern approach would be to recognise that Cloud ERP systems are available that are already up and running across thousands, if not tens of thousands of organisations. 

      Why reinvent the wheel?  Why build your own ‘nuclear submarine’ from scratch?

      A strong, cloud aware approach would be based around understanding the different Cloud ERP systems that are available and which ones most closely fit your needs with the least adaption.  

      This is the ‘adopt not adapt’ approach.

      3. System Selection and Customisation

        So the focus is on selecting the most suitable pre-built ERP system, with the easiest customisation for organisation specific exceptions:

        Evaluating ERP Vendors and Selecting the Best-Fit Solution

        The market offers a plethora of ERP solutions from various vendors. Evaluating these options against the established requirements is crucial. 

        Factors like ease of use, scalability, vendor reputation, the strength of the configuration engine, whether new releases including customisations are automatically included, will the implementation team be accountants and ongoing support should heavily influence the final decision.

        Adapting the ERP System to Match Specific Charity Processes

        Rarely does an off-the-shelf ERP system perfectly align with an organisation's unique processes. 

        Customisation involves tailoring the software to meet specific needs. This can range from creating new modules to altering existing workflows. Striking the right balance between customisation  and maintaining the system's integrity is key.

        Also at this stage, the degree to which the system is pre-configured for similar types of charities should also be considered.  An ERP system that is already running in other charities and ideally similar types of charities is likely to be more cost effective and involve less risk to implement for your organisation.

        Ensuring Seamless Connectivity with Existing Software Systems

        In today's tech-savvy landscape, ERP systems often need to seamlessly integrate with other existing software. This could include CRM systems, e-commerce platforms, or legacy ERP software. 

        Ensuring these integrations are smooth is vital to avoid disruptions in data flow and user experience.  In this day and age, as a minimum, your cloud ERP system should have an ‘open API’ allowing it to communicate with other applications using standard protocols. 

        4. Data Migration

        Planning and Executing Data Migration from Legacy Systems to the ERP System

        Data migration is a critical phase that involves transferring data from existing legacy systems to the new ERP system. This transition must be executed seamlessly to prevent loss of vital information and ensure a smooth transition. 

        The planning phase involves mapping out data sources, deciding on migration methods, and establishing a clear timeline. 

        The subsequent execution phase involves the actual movement of data, often necessitating data transformation and validation.

        Data Cleansing and Validation to Ensure Accuracy

        During migration, it's not uncommon to encounter duplicate, outdated, or inaccurate data. Data cleansing involves identifying and rectifying such discrepancies. 

        After data is cleansed, validation procedures ensure that the migrated data is accurate and consistent. 

        A robust data migration strategy enhances the quality of data within the ERP system, contributing to accurate reporting and decision-making.

        A key question will be the quality of the implementation team that will be working with your finance team.  Do you get to meet the team during the procurement process?  Are the team  both qualified accountants and systems experts?  Particularly in the crucial space of finance data and management reporting, the strongest ERP implementation teams will include systems accountants and not view the project as an ‘IT’ project, but rather a finance transformation initiative. 

        5. Training and Education

        Providing Comprehensive Training to End-Users on the New System

        Transitioning to a new ERP system necessitates providing comprehensive training to end-users. Training programs should cover various aspects, from basic navigation to advanced functionalities. 

        Users must gain confidence in operating the system effectively and efficiently, minimising disruptions to daily operations.

        Addressing Concerns and Promoting User Adoption

        Resistance to change is a common hurdle during ERP implementation. Addressing user concerns, alleviating apprehensions, and highlighting the benefits of the new system are crucial steps in promoting user adoption. 

        An engaged and enthusiastic user base plays a significant role in the successful utilisation of the ERP system's capabilities.

        6. Testing

        Unit Testing

        Thorough testing is imperative before full deployment. Unit testing examines individual components of the ERP system to ensure they function as intended. 

        Integration Testing

        Integration testing evaluates the interaction between different modules and functionalities. 

        User Acceptance Testing

        Finally, user acceptance testing involves end-users assessing the system's usability and confirming that it meets their operational needs.

        Identifying and Resolving Issues Before Full Deployment

        Testing can reveals glitches, bugs, or functionalities that require refinement. The identification and resolution of these issues are crucial before moving towards the final deployment phase. 

        Addressing these concerns ensures a smooth user experience and minimises disruptions once the ERP system goes live.

        An ‘adopt not adapt’ approach is also relevant at this stage: if the system is adopted in a form that is already running for thousands of other organisations, the possibility of significant issues is much reduced. 

        7. Go-Live and Deployment

        Gradual System Rollout or Immediate Switch to the New System

        The deployment phase can take different forms based on the implementation approach chosen earlier. A gradual rollout involves implementing the ERP system in phases, allowing different departments or functions to acclimate to the changes before full adoption. 

        In contrast, an immediate switch involves an organisation-wide transition to the new system at once. 

        The approach chosen should align with the organisation's readiness and risk tolerance.  The most common approach would be ‘financials first’: to bring on-line the general ledger, sales and purchase ledgers with relevant statutory and management reporting.  This is the heart of the transaction finance system.  W

        8. Post-Implementation Support and Optimisation

        Providing Ongoing Support to Address User Queries and Technical Issues

        Even after successful implementation, users might encounter queries or challenges. 

        Post-implementation support involves providing timely assistance to address these concerns, ensuring that users can fully leverage the ERP system's capabilities.

        Some vendors provide a ‘hypercare’ period, where the period after successful implementation continues to be viewed as part of the project, with the same systems accountants continuing to be involved.  This contrasts with the more traditional IT ERP software vendor approach, where on cutover, the customer is immediately transitioned into a call centre (often now called a ‘customer success team’) environment.  

        Any ERP project evaluation should consider whether hypercare is included or not. 

        Continuous Optimisation of the ERP System Based on User Feedback and Changing Business Needs

        ERP systems are not static; they must evolve with the organisation. Continuous optimisation involves incorporating user feedback and adapting the system to changing business requirements. 

        With a modern cloud ERP system, new releases including customisations should be carried forward and all included. This provides price/cost security and is one of the key benefits of cloud 


        In the world of modern organisations and charities, where efficiency, data accuracy, transparency and informed decision-making are paramount, the ERP implementation process emerges as a critical undertaking. 

        This journey, comprising a series of carefully orchestrated phases, is far more than a technical transition; it's a strategic initiative that holds the potential to reshape an organisation's finance operational landscape.

        Throughout this article, we've underscored the significance of aligning an ERP implementation with the overarching goals of an organisation. 

        A key consideration is the extent to which an organisation wishes to ‘adopt not adapt’ an existing, proven ERP system and associated processes.  Cloud ERP allows for organisations to ‘adopt not adapt’ without the complexities of a bottom up IT build of a system.  =

        In conclusion, the ERP implementation process is a journey that requires careful consideration, executive  buyin, and a clear vision of the desired outcomes. By embarking on this journey with an understanding of each phase, organisations can harness the full potential of their ERP systems. 

        As organisations navigate the challenges and embrace the opportunities of the modern digital age, a well-executed ERP implementation stands as a testament to adaptability, innovation, and the pursuit of excellence.

        In the context of charities and socially minded organisations, ERP offers a foundation to align both finance and non finance metrics. Contact us to find out how an ERP implementation can benefit you.

        Summarising the Key Phases of the ERP Implementation Process

        Pre-implementation planning:

        • Consider whether you want an ‘adopt not adapt’ approach and if so, the extent to which ERP software vendors align with your chosen approach. 
        • Consider the ERP implementation team and particularly whether the team includes systems accountants.

        Post-implementation support:

        • Ensure continuous optimisation for success.
        • Each phase has a unique role in project success.

        Key phases include:

        • Initial discovery and alignment of the system with your organisations individual needs.
        • Migrating data smoothly.
        • Thoroughly training users.
        • Rigorous testing procedures.

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