The Role of BPO in Enterprise Resource Planning (ERP) Implementation

Enterprise resource planning (ERP) systems are powerful tools for organizations, capable of enhancing operational efficiency, reducing expenses, and optimizing business processes. Nevertheless, introducing an ERP system is a multifaceted endeavor that demands meticulous planning, harmonized efforts, and effective teamwork.

Business process outsourcing (BPO) is pivotal in an ERP implementation initiative. Service providers expertly integrate particular business processes within the organizational framework.

This article discusses the role of BPO providers in solving challenges related to ERP implementation. Keep reading!

The challenge of implementing ERP systems

ERP systems are comprehensive software solutions that integrate and streamline various business processes across departments, such as finance, human resources (HR), manufacturing, and supply chain management. In 2022, the ERP market was valued at $54.76 billion. Implementation involves installing, configuring, and deploying an ERP system.

ERP implementation can be complex and challenging; organizations often encounter various obstacles. In fact, 55% to 75% of ERP implementations fail or do not meet the intended goals. Companies such as Hershey’s, Nike, and Lidl have experienced severe repercussions due to unsuccessful deployments.

Some common challenges with ERP implementation include:

• Poor planning and project management. Inadequate planning and project management can lead to scope creep, missed deadlines, and budget overruns. Effective project management is crucial for keeping implementation on track and meeting goals.
• Lack of executive support. Without strong support from senior leadership, ERP implementation might face employee resistance and struggle to gain traction within the organization. Executive buy-in is essential for driving change and overcoming barriers to adoption.
• Data migration issues. Data migration is a critical aspect of ERP implementation, and challenges can arise due to low data quality, incompatible data formats, or technical difficulties. Poor data migration can lead to errors, inconsistencies, and disruptions in business operations.
• Customization overload. While customization may be necessary to tailor the ERP system to business requirements, excessive customization can complicate the implementation process and increase maintenance costs. Finding the right balance between customization and standardization is key.
• User resistance and training needs. Employees might refrain from adopting the new ERP system, particularly if they perceive it as disruptive or difficult to use. Effective change management strategies, including comprehensive training and communication, are essential for overcoming resistance and fostering user adoption.
• Integration challenges. Integrating the ERP system with existing systems and third-party applications can be complex, especially when using multiple systems or data formats. Integration issues can lead to data silos, inefficiencies, and interoperability problems.
• Vendor issues. Organizations might encounter challenges related to the ERP vendor, such as delayed product delivery, inadequate support, or unexpected costs. Choosing a reliable vendor with a proven track record and robust support services can help mitigate these risks.
• Performance and scalability. As firms grow and evolve, the ERP system must be able to scale to accommodate increasing data volumes, user counts, and business complexity. Performance or scalability issues can impact productivity and hinder business growth.

How BPO companies support ERP implementation

Addressing ERP implementation challenges requires thorough planning, communication, stakeholder engagement, and collaboration among all parties involved. BPO companies can offer valuable support in overcoming the challenges associated with ERP implementation.

So, what is BPO’s role in ERP implementation? To answer this question, we must first discuss why numerous ERP implementations fail—they have inadequately defined business requirements.

During an ERP rollout, business requirements denote the existing processes the system must align with and the intended modifications for future advantages. Thoroughly documenting and utilizing current processes to shape precise requirements and functional specifications is crucial for success.

BPO teams dedicate significant time to crafting standard operating procedures (SOP) for clients. They meticulously document every departmental process to ensure proper ERP implementation. They also account for exceptions, variations, and sporadic events within business operations.

BPO teams employ professional consultants who possess an innate comprehension of company operations acquired from years of collaborating with various organizations. They are adept at extracting necessary information from employees, delving into how different scenarios are managed and exceptions handled.

Top-tier outsourcing providers can replicate processes and re-engineer them to align with business objectives. The ERP implementation process typically involves several key phases that BPO companies can help with:

• Process assessment and documentation. BPO partners are experts in process analysis and documentation. They can provide leadership, structure, and oversight to ensure the ERP project meets its objectives. They can also assess current business processes, identify inefficiencies, and document ERP system requirements.
• Change management. Implementing ERP solutions requires significant changes to business processes and workflows. BPO partners can support change management efforts by helping communicate developments to employees, providing training and support, and addressing concerns or resistance.
• Data cleansing and migration. BPO partners can assist with data cleansing and migration tasks, including extraction, transformation, and loading (ETL). They can help ensure data integrity and accuracy during the migration process.
• Configuration and customization. Specialized BPO partners can assist with configuring and customizing the ERP system to meet the organization’s specific requirements. This process includes setting up modules, defining workflows, and configuring user interfaces.
• Testing and quality assurance. BPO partners can participate in various testing phases of the ERP implementation, including unit testing, integration testing, and user acceptance testing. They can help identify and report bugs or issues and work with the implementation team to resolve them.
• Training. BPO partners can assist with training efforts by providing training materials, conducting learning sessions, and offering ongoing support to users as they transition to the new ERP system. They can address questions and concerns and guide users in using the system effectively.
• Post-implementation support. After implementing the ERP system, BPO partners can provide ongoing support to help address any issues or questions. This service includes troubleshooting technical problems, providing user support, and adjusting configurations.
• Process optimization. After implementing the ERP system, BPO partners can help identify process optimization and improvement opportunities. They can analyze system usage data, gather user feedback, and suggest changes to create efficiency and enhance productivity.
• Vendor management. BPO companies can liaise with ERP vendors on behalf of the organization, helping to manage vendor relationships, escalate issues, and ensure that the organization receives the support and assistance it needs throughout the implementation process.

Other benefits of leveraging BPO for ERP implementation

Besides overseeing specific business processes, a BPO partner specializing in ERP implementation offers several other benefits. Here are a few of these BPO advantages:

• Flexible functions. BPO companies can offer flexibility and scalability in resource allocation, allowing organizations to scale up or down as needed during the ERP implementation process. They can also provide resources and expertise to address unexpected challenges or workload fluctuations.
• Technical expertise. BPO companies often employ experts who can address technical challenges related to ERP implementation, such as system integrations, so businesses can focus on what matters.
• Regulatory support. BPO companies can help ensure the ERP system meets regulatory requirements and industry standards. They can provide expertise on compliance issues and help implement controls and processes to ensure regulatory compliance.
• Cost-efficient services. BPO partners can help organizations reduce costs associated with ERP implementation. By leveraging the third party’s existing infrastructure, resources, and expertise, client organizations can avoid investing in additional internal resources or hiring specialized consultants.
• Faster deployment. BPO partners have experience implementing ERP systems and can help expedite deployment. Their streamlined approach and knowledge of potential pitfalls and challenges can help organizations achieve faster time to value.

The bottom line

ERP implementation is a complex and challenging process that requires careful planning, coordination, and collaboration. When done successfully, it can increase efficiency, productivity, and competitiveness.

Partnering with a BPO provider can help organizations streamline the ERP implementation process, leverage external expertise, and mitigate the risks associated with complex implementation projects. However, it is important to choose a BPO partner with relevant experience, domain expertise, and a track record of successful ERP implementations.

Unity Communications provides companies of different sizes with instant access to proven talent. Let’s connect to learn more about our outsourcing services.