ERP Implementations: Understanding Technical Versus Business Go-Live

Many life science companies rely on enterprise resource planning (ERP) to help manage and integrate essential parts of the business. Implementing an ERP solution is a major undertaking for any organization. Even when the right ERP option is selected, implementation must consider the needs of the specific business, and in particular the regulated environment that our pharma and biotech clients operate within. A poorly planned and coordinated implementation can put the entire project and the business in jeopardy.

Robert Cantow is one of Converge’s supply chain practice directors and has 30+ years of experience designing, transforming, and managing complex global supply chains in the medical devices, pharma and biotech industries.
Rashi Gupta is a consultant focusing on supply chain operations. She also provides project management support for ERP implementations and commercial product launches.

Our clients typically engage an integrator to implement the ERP solution. While integrators may bring a deep understanding of the software and configuration, many lack industry-specific knowledge of the capabilities required by biopharma companies. As a result, they often focus primarily on the technical configuration and integration of the systems. Consequently, we see situations where even after implementation our clients are unable to properly use and realize the full potential of the software. The originally envisioned business benefits from the system are then limited or delayed. In the worst case, the paper-based and spreadsheet systems that existed prior to implementation are retained as primary business process tools.

“Technical” Versus “Business” Success in ERP Implementation

The ability for end users to adopt and properly utilize ERP solutions can make the difference between implementation success and failure. In supporting our clients, we have come to recognize two forms of system go-lives, both of which are essential for a successful ERP implementation.

Technical Go-Live

Technical go-live is comprised of activities required to get the software properly configured, tested, and integrated. It involves:

  • Identifying architectural requirements and defining system design and configurations
  • Defining interactions between the new ERP and existing systems
  • Ensuring end user security and data integrity
  • Migrating legacy data into the test environment and later into the production environment
  • Performing system validation and system integration testing, including user acceptance testing

Business Go-Live

Business go-live involves activities that enable business users to understand and effectively use the solution to complete work and achieve the desired business benefits. Efforts include:

  • Ensuring end users understand ERP functionality (both what the solution will do and what it won’t do)
  • Identifying business requirements and creating user requirements specifications (URS)
  • Defining how new ERP-enabled business processes will operate, and developing standard operating procedures (SOPs) for those new business processes
  • Ensuring data is available and sufficient to perform the new processes
  • Providing timely user training to the appropriate end users

ERP Implementation Lessons from the Field

In one recent engagement, our client was conducting a phased ERP implementation across their manufacturing facilities and supply chain functions. The ERP implementation partner understood the software capabilities well, but due to budget and time constraints primarily focused on the technical aspects of go-live. Consequently, business functions were working in silos. The material setup was fragmented, leading to issues in planning for demand, supply, and manufacturing scheduling. To add to the difficulties, business processes were not well-defined pre-implementation. A lack of process clarity in the pre-existing paper-based systems was carried forward to the ERP solution. Additionally, although a subset of master data was prepared and used to complete system and user testing, a great deal of the additional data required to conduct business going forward was not made available in the ERP system. As a result, after a successful technical go-live, no business transactions occurred in the system for months, until the balance of the relevant data was available. Overall, the outcome was less than successful.

To contrast, in another engagement, our client was implementing their ERP solution’s Inventory Management Module in preparation for commercial launch. The client had a well-established paper-based system and processes, and business users were educated with the desired system capabilities. Although the ERP implementation firm had no prior experience in the life sciences industry, a core team of business users from relevant functions was assembled from the start of the implementation project. They attended a vendor-led session to learn about system configuration options and provided input for required system functionality. Additionally, all the relevant master data was cleaned and migrated prior to go-live. Thus, business processes could be transacted in the system as intended, simultaneously achieving successful technical and business go-lives.

What You Can Do to Ensure a Successful Business Go-Live

Many factors can help ensure a successful business go-live. Selecting the right implementation partner is a good start. Choose a vendor who knows your industry and its unique requirements.

You can also plan to involve other experienced internal or external resources. Industry knowledge makes it easier to understand and prioritize business needs.

Assemble a cross-functional core team representing all the relevant business functions affected. This team will help identify desired system capabilities.

In addition, ensure that you set a realistic timeline to allow sufficient time for the necessary activities and for end users to prepare and train for system adoption. These steps, among many others, can help your organization with a successful ERP implementation.

Key Takeaways

  • Recognize that a successful ERP implementation requires both a successful technical go-live and a successful business go-live. Too much focus on just the technical aspects can result in delayed business benefits or even implementation failure.
  • Many ERP implementers bring substantial expertise with the software, and implementers can over-emphasize technical go-live activities at the expense of the business go-live. Time and budget constraints often encourage implementers to view technical go-live as the primary goal.
  • It is just as (or more) important for emerging life science companies to realize a successful business go-live for ERP implementation, to ensure that users can conduct business within the system as intended and that your substantial financial and resource investments provide true business value.