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? Which key points should companies keep 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 requires thorough preliminary work and has little prospect of success without the continuous involvement of the top management. Sometimes, the management withdraws when the project has started and reduces their attention to the few hours of a monthly steering committee meeting instead of continuously optimising the defined project master plan and adapting it to the requirements.
In such highly demanding IT and change projects, almost all sections and departments of the company and a large number of consultants of the IT service providers are involved. Unfortunately, experience has shown that sometimes in the course of major, long-term projects, conflicts of objectives, different views and misunderstandings can arise in the companies. In this context, the active commitment of the top management is crucial for the success of the project. Therefore, the top management is requested to actively assume its authority to establish guidelines and to cooperate in a very trusting manner internally with the stakeholders and with the service providers and to act as a balancing pole of interests with these key people. This allows the people working on the project to avoid potential friction and problems at an early stage and to maintain the team spirit, the calmness in the project and goal orientation. Furthermore, it should be ensured that the priority of the ERP project is not changed in favour of other important projects.
The management must be aware of the fact that an ERP project is not just an IT project but rather a project that challenges and changes the entire company with all departments concerned. This has to be encouraged and structured actively by the top management.
An ERP project is an important opportunity to transform companies and shape their competitiveness for the future. This means that ERP projects require clear objectives and prioritisation as well as prompt decision-making. These tasks should be in the hands of the top management!

What should be kept in mind in view of human resources planning?
Sufficient personnel resources in the company and on the part of the service provider are important throughout the entire course of the project. This often creates new roles for staff, for which they need to be trained and into which they can grow in the course of the project. This should definitely be clarified before the start of the project in order to ensure a smooth start. Apart from that, good project and personnel planning on the part of the company and the service provider should be developed before or at the start of the project so that throughout the course of the project, the individual departments are aware of the availabilities for the members of staff involved in the project in the various departments. The demand for cooperation from the departments can vary depending on the project phase. Very often, the related departments are more involved at the beginning and at the end of a project. Above all, this capacity planning is important for the members of staff themselves as otherwise false expectations of the departments may lead to conflicts of objectives and demotivation of the people involved in the project. Over the past decades, the focus was on the core competences so that there were no resources left 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. The project roles within the project organisations should be clearly defined at the beginning of the project and the required capacities should be available.

What impact does corporate culture have on the success of the project?
Often, companies already have highly trained staff with good knowledge of project management, although 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 establishing a joint project platform, e.g. Azure Dev Ops, in which all project activities such as user stories, interface specifications, test scenarios and protocols are recorded, a detailed definition of the services to be provided by the implementation partner, but also by customers and other partners involved in the project, should be made in advance in order to avoid misunderstandings later on. Usually this is done in the form of a comprehensive Statement Of Work (SOW), which includes a complete list of services from all project participants.
A special challenge is the open and honest communication with the top management.The decisive factor here is the corporate culture, the management style and interaction within the company. There is often a lack of seniority and courage to openly address mistakes and problems with the decision-makers and the implementation partner and to suggest measures. The question of how to deal with the company’s 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 preferred; for the Go-Live of further sections, the experience gained will be taken into account. However, organisational criteria such as business areas, national subsidiaries or functional areas can also be used for a breakdown. Although this leads to temporary interfaces to the existing legacy systems, increases complexity at this point and creates additional effort, it reduces the overall risk. Sufficient time should be allocated for the development of the right strategy, and the experts of the service provider 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, they risk a longer project term and additional costs. Often, these modifications are explained by the work methods and processes people are used to. These methods usually resulted from missing functionalities in old ERP systems. Usually, employees aim to develop processes that run as efficiently as possible for their companies or at least for their department, which they try to achieve through specific adjustments. When introducing a new system, however, individually adapted processes should be reconsidered in favour of standard processes. Today’s ERP systems reach a very high level of maturity in their processes.
This makes a standard software sometimes more efficient and economical. Certainly, it is crucial to success that the users are involved in the introduction of the software and the associated changes. A lot of tactfulness and leadership qualities play a major role here. The managers must meet this challenge and task actively and openly so that no resistance to the project arises and the success of the project is not put at risk.
In this context, it is important to have a continuous change management process, as the introduction of ERP systems often involves changes to processes and organisational procedures, which are also associated with a new template design and usability. This has consequences for the members of staff. In some cases, tasks become unnecessary and are taken over by the system; other tasks are shifted to different areas or departments. The management should accompany these changes in a sensitive and intelligent way so that a good system is introduced as standard and the employees 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 indeed strictly necessary. Timely training allows staff to actively work on the system at an early stage.

Why is an intensive and timely testing phase so important?
In addition to the functional and process tests to be carried out in the implementation phase, complex processes including the interfaces with already migrated legacy data are carried out in the downstream test phase.
Test case scenarios should contain 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 the automated test implementation. Otherwise, missing functions or errors are not recognised at this important stage and will only be identified 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 Go-Live ensures that all business-critical processes and the connection of external systems can be tested for completeness and stability.

What opportunity does a timely optimisation of master data offer?
The data transfer should definitely also be understood as an opportunity for optimising master data. The quality of master data is an important success factor when introducing a new ERP system. Unfortunately, the quality of this data is sometimes insufficient and needs to be brought up to a good level. This should not be dealt with too late. Old master data must often be freed from duplications and enriched with further data or generated anew. Different versions of master data do not make this task any easier. The cleaner the database before the migration, the lower the error rate and thus the effort for the clean-up afterwards.
In order to manage this task well, it is the commitment of experienced SPH project managers to actively point out these issues to their clients and guide them through the projects, thus taking the lead. Furthermore, the SPH management provides support to the customer’s top management throughout the entire project, maintaining a trustful exchange, and gives advice on optimisation potential. All these aspects need to be taken into account.

Therefore, SPH AG has developed its own, thoroughly tested, project methodology – SPIM. SPIM creates time and budget transparency at every stage of the project. SPIM guarantees a high level of safety 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 with the digital transformation, from strategy to implementation to go-live.
Our specialist industry expertise and long-term experience, combined with maximum competence and a profound understanding of our customers ensure that projects are implemented in a fast, transparent and cost-effective way.

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 affects the entire market in all facets and challenges companies to become faster, more flexible and more cost-efficient in their business processes. 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 superiority in the market with a modern, future-proof ERP solution.