The ERP Implementation Lifecycle
Successful ERP implementation follows a structured lifecycle. Whether you're implementing SAP, Dynamics 365, or Odoo, the fundamental phases remain the same. This guide walks through each phase with practical advice for manufacturing companies.
Phase 1: Project Initiation & Planning (Weeks 1-6)
This phase sets the foundation. Get it wrong, and everything else suffers.
Key Activities: - Establish project governance (steering committee, project manager, key users) - Define scope, objectives, and success criteria - Build the detailed project plan with milestones - Conduct current-state process mapping - Begin master data assessment and cleansing strategy
Critical Success Factors: - Executive sponsor actively participates in steering committee (not just signs off) - Key users committed at minimum 20% of their time - Scope is documented and signed off — changes go through formal change control - Realistic timeline that accounts for your team's availability
Common Pitfalls: - Underestimating the data cleansing effort (plan for 30-40% of total effort) - Not involving shop floor users early enough - Trying to replicate every existing process in the new system
Phase 2: System Configuration & Development (Weeks 4-16)
This is where the system takes shape. Configuration decisions made here determine how the system works for years.
Key Activities: - Configure organisational structure (legal entities, plants, warehouses, work centres) - Set up master data templates and begin data loading - Configure core modules: MRP, production planning, inventory, purchasing, quality, finance - Develop integrations (CAD/PLM, MES, e-commerce, banking) - Build reports and dashboards
Manufacturing-Specific Decisions: - BOM structure: How many levels? Phantom assemblies? Configurable BOMs? - Routing complexity: Standard vs. alternative routings? Subcontracting? - Costing method: Standard cost vs. actual cost vs. average cost? - MRP parameters: Safety stock, reorder points, lot sizing rules, planning horizons - Quality integration: Inspection at receipt, in-process, final? Automatic vs. manual?
Configuration Principle: Configure before customise. Every customisation adds cost to every future upgrade. Challenge "we've always done it this way" — the ERP's standard process may be better.
Phase 3: Testing (Weeks 12-20)
Testing is where most manufacturing ERP projects either prove their value or reveal their gaps.
Testing Layers: 1. Unit Testing — Each configured process works individually 2. Integration Testing — End-to-end process flows (order-to-cash, procure-to-pay) 3. Data Migration Testing — Migrated data is complete and accurate 4. User Acceptance Testing (UAT) — Real users perform real scenarios 5. Performance Testing — System handles expected transaction volumes
Manufacturing Test Scenarios to Never Skip: - Full production order lifecycle (plan → release → issue materials → report → close) - MRP run with realistic demand and supply data - Quality inspection with pass/fail outcomes - Month-end close with WIP valuation - Multi-level BOM explosion
Phase 4: Go-Live Cutover (Weeks 18-22)
The cutover period is the most intense 2-4 weeks of the entire project.
Go/No-Go Decision: 2 weeks before go-live, assess against objective criteria: - All critical processes tested and signed off - Data migration rehearsal completed successfully (minimum 3 rehearsals) - Training completed for all user groups - Support plan and escalation procedures in place - Rollback plan documented and tested
Cutover Activities: - Final data migration (inventory counts, open orders, open POs, GL balances) - System validation and reconciliation - User access provisioning - Communication to all stakeholders - Parallel running (if applicable)
Phase 5: Hypercare & Stabilisation (Weeks 22-30)
The first 30 days after go-live require intensive support.
Hypercare Structure: - Week 1-2: On-site support, daily stand-ups, rapid issue resolution - Week 3-4: Transition to remote support, issue severity classification - Month 2-3: Optimisation, performance tuning, process refinement
Issue Severity: - Critical (4-hour response): System down, production stopped - High (8-hour response): Major process blocked, workaround possible - Medium (24-hour response): Process inconvenience, workaround exists - Low (backlogged): Enhancement, minor cosmetic issue
After Go-Live
Implementation doesn't end at go-live. The first 90 days determine long-term success. Read our guide on the First 90 Days After ERP Go-Live.