We discuss Enterprise Resource Planning Systems (ERP), and strategies for implementing them. Implementation can be broken down into two major strategies.
The Big Bang strategy focuses on switching from the legacy system to the new ERP system in one shot, or “Big Bang”. This means switching from the old to the new system across all departments, and at all levels, all at once.
There are a number of advantages to the Big Bang strategy. It tends to have a lower implementation cost because implementation occurs over a shorter time frame. The number of issues that inevitably crop up tend to occur during this shorter period of time. If everything goes according to plan, systems implemented under the Big Bang strategy are up and running on the first day, and legacy systems do not need to run simultaneously with the new system.
There are also a number of potential disadvantages to the Big Bang strategy. Because a Big Bang implementation occurs at all levels of the organization and across departments, there is a higher chance of technical problems, which makes implementation riskier. There is also a near term impact on productivity because there is a shorter time to o train employees on the new system. (International Business Systems 2013)
The Phased Implementation strategy focuses on phasing out portions of the legacy system and phasing in the new system in stages, or phases, instead of replacing the entire system all at once.
There are a number of advantages to implementing the Phased Implementation strategy. There is a lower risk to implement this strategy because only a portion of the system is being replaced at any given time, instead of the entire system. If there is a problem, there is more time to resolve the issues and test. There is also more time to train employees.
There are also a number of potential disadvantages to the Phased Implementation strategy.
It takes longer to implement because portions of the system are being replaced. This means that the company has to temporarily connect the old system to the new system as the new system is being phased in. It is also possible that there will be disruptions to inter-departmental business processes during this process. (International Business Systems 2013)
The article notes that neither strategy is better than the other. Whether an organization uses the Big Bang strategy or the Phased Implementation strategy depends on the business requirements of the organization itself, the scale of the organization, IT infrastructure and preparedness.
International Business Systems. How to Implement ERP for Your Business: All at Once or In Phases? August 02, 2013. http://globial.com/globialtalksbusiness/how-to-implement-erp-for-your-business-all-at-once-or-in-phases/ (accessed March 02, 2014).