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Crestwood Associates

How to Insure That Your Microsoft Dynamics GP Implementation Will Cost More Than You Planned (or How to Blow your ERP Budget in 6 Easy Steps): PART I


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    You’ve heard the horror stories… ERP implementations gone wild!  You end up spending two to three times what you had budgeted.  Well it doesn’t have to happen and it really shouldn’t.

    The good news is that Microsoft Dynamics GP is designed to make the implementation as easy as possible.  And Microsoft has gone further to help assure successful and on-budget implementations through its Best Practices documentation called Sure Step.  But there are still some “gotchas” that you need to watch for.

    Six things that can historically lead to over-budget implementation costs:

    1. Not carefully defining the overall organization structure.  How you first setup Microsoft Dynamics GP will have a lot to do with the success of the system.  Do you have multiple companies?  Do you need separate databases?   What financial reporting segments do you need to represent lines of business, cost centers or other major categories?  What is the most appropriate Chart of Accounts?  How you define your organization within GP drives data collection and financial reporting.  Will your existing structure work?  Or are there changes you would like to make? Because if there are, now is the time to do them.  And you can anticipate what the future might bring and allow for that.  Many parts of Dynamics GP can be reconfigured or changed after the fact.  But some are more difficult, and making those changes can equal dollar signs.  Spend the necessary time up front to make sure you have the underlying structure to support your company needs now and in the future.  One easy strategy?  Think hard about what you want to get out of your system, then work backwards to figure out what you’ll want to put in.
    2. Converting all historical data.  Depending on what system you are currently using, converting historical data can be smooth.  For example, migrating historical data from QuickBooks to Dynamics GP has been made relatively easy.  But if you are coming off other accounting systems, it can be more complex.  Now Dynamics GP does provide a module called Integration Manager that can be used for a one time conversion of historical data.  And there are other third party products available as well.  But still this is an area that can lead to significant costs.  So think hard about what you really need to bring over.  Why do you need it? How will it provide value to you (be honest, and specific).  Determine how accurate and “clean” the old data is.  If there are issues with it, why bring it over?  A compromise might be to bring over historical GL financial data (for comparative financial statements), and master records such as customers and vendors.  If you can retain your old system for reference purposes, you can minimize what you bring over and the associated cost.  Be mindful of what you need and what your options are in this area.  More isn’t always better… sometimes it’s just more.
    3. Wanting every report you ever had.  Some people will insist on recreating every report they ever had on their old system, without thinking about if it is still needed, who uses it, and if there is an existing report in Dynamics GP that will do what you need.  It is true that you should focus closely on the output that you need from the new system– be that forms such as invoices that your customers see, or key reports that your internal staff need day to day accounting functions and operational analysis.  But focus on what data you need, not necessarily the format of the report.  You may find yourself asking for more and more reports you used to have, when they are really not needed or addressed through another existing report.

    As a Microsoft Dynamics GP Partner, we pride ourselves in keeping at or under the budget we have for our ERP implementations.  By keeping an eye on these few critical areas, you can go a long way to having a successful on-time and on-budget implementation.

    In Part II of this blog (due out next week), we’ll discuss three more great ways to tank your ERP implementation budget.  Stay tuned!

    Feel free to contact me with any questions you may have: Rick Feterick, Crestwood Associates LLC, 847-394-8820 x48 or [email protected].

    by Crestwood Associates LLC – Indiana Microsoft Dynamics GP Partner.

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