How to successfully implement ERP Projects
Interview with Detlef Beiter

The SPH Editorial Department asked Detlef Beiter, Chairman of the Management Board and CEO of SPH AG, which key points should be kept in mind when starting an ERP project.

Mr Beiter, as CEO of SPH AG and based on your wide experience with major projects in various positions of your career, what recommendations can you give to companies for the introduction of a new ERP system? What are the key points that companies should bear in mind?
Enterprise Resource Planning projects are often a key milestone for companies on their way to optimising and digitalising new business processes and thus the basis for new business models. They renew the core of the company’s IT or replace it completely, with company-wide impacts.

Why should the top management be involved throughout the entire project term?
The decision in favour of an ERP project, the selection of the adequate software provider and the appropriate service provider for the implementation require thorough groundwork and have little chance of success without the continuous involvement of the top management. Sometimes, once the project is underway, management withdraws and focuses its attention on the few hours of a monthly steering committee meeting, instead of continuously optimising the defined project master plan and adapting it to the requirements.
Such highly demanding IT and change projects involve almost all parts and departments of the company and a large number of consultants from the IT service providers. Unfortunately, experience has shown that in the course of large, long-term projects, conflicting objectives, differing views and misunderstandings can sometimes arise within organisations. In this context, the active involvement of top management is crucial for the success of the project. Therefore, top management is required to actively use its authority to set guidelines and to cooperate internally with stakeholders and service providers in a very trustful way and to act as a balancing pole of interests with these key people. In this way, the people working on the project can avoid potential friction and problems at an early stage and maintain the team spirit, calmness in the project and goal orientation. It should also be ensured that the priority of the ERP project is not changed in favour of other important projects.
The management must be aware that an ERP project is not just an IT project, but a project that challenges and changes the entire company and all departments involved. This needs to be actively encouraged and structured by top management.
An ERP project is an important opportunity to transform an organisation and shape its competitiveness for the future. This means that ERP projects require clear objectives and priorities, as well as timely decision making. These tasks should be in the hands of the top management!

What should be kept in mind when planning human resources?
Sufficient human resources in the company and on the part of the service provider are important throughout the course of the project. This often creates new roles for staff, for which they need to be trained and into which they can grow as the project progresses. This should be clarified before the start of the project to ensure a smooth start. In addition, good project and staff planning by the company and the service provider should be developed before or at the start of the project, so that during the course of the project the different departments are aware of the availability of the staff involved in the project in the different departments. The need for cooperation from departments may vary depending on the phase of the project. Very often, the relevant departments are more involved at the beginning and end of a project. This capacity planning is especially important for the employees themselves, as otherwise false expectations of the departments can lead to goal conflicts and demotivation of the people involved in the project. Over the past decades, the focus has been on core competences, leaving no resources for additional essential projects.
The skills of the staff involved are also of great concern. A strong project manager is required who is able to coordinate a very complex project and different interests. A basic willingness for changes on the part of all those involved, as well as charisma with regard to the product and new processes are an advantage. Project roles within the project organisation should be clearly defined at the start of the project and the necessary capacity should be available.

What impact does corporate culture have on the success of the project?
Often, companies already have highly trained staff with good project management skills, but it makes sense to coordinate with the IT service provider and implementation partner at an early stage to discuss and decide on the ERP implementation method and strategy. In addition to setting up a common project platform, e.g. Azure Dev Ops, in which all project activities such as user stories, interface specifications, test scenarios and logs are recorded, a detailed definition of the services to be provided by the implementation partner, but also by the customer and other partners involved in the project, should be made in advance in order to avoid misunderstandings later on. This is usually done in the form of a comprehensive Statement Of Work (SOW), which includes a complete list of services from all project participants.
A particular challenge is open and honest communication with top management, which depends on the corporate culture, management style and interaction within the company. There is often a lack of seniority and the courage to openly discuss mistakes and problems with the decision-makers and the implementation partner, and to propose measures. The question of how to deal with company policy and, if necessary, how to involve the works council should preferably be clarified in advance.

How important is strategy when introducing an ERP system?
Before introducing a new ERP system, a decision should be taken about the strategy, i.e. in which sequence the system is introduced. Areas such as finance are often prioritised and experience gained is taken into account when other areas go live. However, organisational criteria such as business units, national subsidiaries or functional areas can also be used for the breakdown. Although this will result in temporary interfaces to existing legacy systems, increase complexity at this point and create additional effort, it will reduce the overall risk. Sufficient time should be allowed to develop the right strategy, and the service provider’s experts should be involved.

Why can a standard software be more efficient in some cases?
As the primary goal of a new ERP solution, the introduction should be as close as possible to standard. This requires the ERP platform to cover the requirements to the greatest possible extent, including any industry solutions. If members of staff require additional adjustments and programming, there is a risk of prolonging the project and incurring additional costs. Often, these modifications are explained by the work methods and processes that people are used to. These methods are usually the result of missing functionality in legacy ERP systems. Typically, employees aim to develop processes that are as efficient as possible for their company, or at least for their department, and they try to achieve this by making specific adjustments. However, when implementing a new system, customisation should be reconsidered in favour of standard processes. Today’s ERP systems have reached a very high level of process maturity.
This can make standard software more efficient and economical. Of course, it is crucial for success that the users are involved in the introduction of the software and the changes that come with it. This requires a lot of tact and leadership. Managers need to take an active and open approach to this challenge and task, so that resistance to the project does not arise and the success of the project is not jeopardised.
In this context, it is important to have a continuous change management process in place, as the implementation of ERP systems often involves changes to processes and organisational procedures, as well as a new template design and usability. This has an impact on employees. In some cases, tasks become redundant and are taken over by the system; other tasks are shifted to other areas or departments. Management should guide these changes in a sensitive and intelligent way, so that a good system becomes standard and people remain motivated.
Particularly in the case of joint implementation of several corporations in a group of companies, the harmonisation of business processes between the group companies holds additional potential for a system introduction close to standard.

When is the right time for the first training?
Training for an understanding and efficient operation of the new ERP system is often underestimated and planned too late or without sufficient time. For the acceptance of the new system and thus of the project as well as for the project work, comprehensive training in a very early phase is immensely valuable. This allows the project to gain momentum and the employees will get to know and appreciate the potential of the new system. With this understanding, it also becomes clearer which extensions and changes to the standard are really necessary. Timely training allows staff to become actively involved in the system at an early stage.

Why is an intensive and timely testing phase so important?
In addition to the functional and process testing to be carried out in the implementation phase, complex processes, including interfaces with already migrated legacy data, will be tested in the downstream testing phase.
Test case scenarios should include all essential functions and business processes (E2E) for the test phase of the project. For this purpose, the project platforms should offer comprehensive options for controlling, documenting and evaluating the tests, including automated test execution. Otherwise, missing functions or errors will not be detected at this important stage and will only be discovered in live operation – supposedly minor details that can sometimes lead to major deficits in the overall processes. Everything that is adequately tested at this stage will later provide security in live operation. This applies not only to the system, but also to all users and affected business processes.
An explicitly defined and long test phase before going live ensures that all business-critical processes and the connection to external systems can be tested for completeness and stability.

What opportunities does timely master data optimisation provide?
Data transfer should also be understood as an opportunity to optimise master data. The quality of master data is an important success factor when implementing a new ERP system. Unfortunately, the quality of this data is sometimes inadequate and needs to be brought up to a good level. This should not be left until it is too late. Old master data often needs to be cleansed of duplicates and enriched with additional data or created from scratch. Different versions of master data do not make this task any easier. The cleaner the database before migration, the lower the error rate and the less effort it will take to clean it up afterwards.
In order to do this well, experienced SPH project managers are committed to actively raising these issues with their clients and guiding them through the projects, taking the lead. In addition, SPH’s management supports the client’s top management throughout the project, maintaining a trustful exchange and advising on optimisation potential. All these aspects must be taken into account.

That is why SPH AG has developed its own tried and tested project methodology – SPIM. SPIM creates time and budget transparency in every phase of the project. SPIM guarantees a high level of security in the functional and technological implementation of business requirements.
We provide companies in the fashion, retail and mail order industry with IT solutions to optimise processes and system landscapes. We support you in your digital transformation, from strategy to implementation to go-live.
Our specialist industry knowledge and long experience, combined with the highest levels of competence and a deep understanding of our customers, ensure that projects are delivered quickly, transparently and cost-effectively.

What is your conclusion of the current situation on the market?
The fashion industry needs to take into account new trends that have become our new normal over the past two years. These trends are, on the one hand, a partial decline in demand and a significant shift to digital buying and selling and, on the other hand, a higher importance of sustainable products – retail is undergoing a transformation where experience is becoming more and more important. This complex change is affecting every facet of the market, challenging companies to make their business processes faster, more flexible and more cost-efficient. Digitalisation has become one of the most important success factors and is therefore essential for survival. This is why it is so important to seize the opportunity now to address these issues and extend your market advantage with a modern, future-proof ERP solution.