The 6 Stages of ERP Implementation

An Enterprise Resource Planning (ERP) implementation can be a complex process that impacts many different areas of your business. As with any major project, a clear and well-designed implementation plan is crucial. Dividing it into clear stages is a proven way to help make sure you succeed.

What is an ERP Implementation?

An ERP system brings together key business functions – such as finance, human resources, sales, and manufacturing – into a single, unified platform, driving greater efficiency and productivity. The process of ERP implementation involves planning, configuring, and rolling out the system to align with business needs. Given that an ERP solution automates and supports a wide range of operations, implementation is typically a complex project that takes several months.

For a smooth and successful deployment, businesses must first define their specific requirements, assess how processes can be optimised to leverage the system’s capabilities, configure the ERP system accordingly, and conduct thorough testing before making it available to users. Managing each stage effectively requires careful coordination, strategic planning and a structured, phased approach to ensure everything stays on track and delivers the expected benefits.

The 6 ERP Implementation Stages

A standard ERP implementation plan is typically broken down into six key stages, each with distinct objectives. While the exact structure may differ depending on the company’s needs and some steps may overlap, the general ERP implementation lifecycle consists of discovery and planning, design, development, testing, deployment, and ongoing support.

1. Discovery & Planning

The first stage of ERP implementation focuses on research, system selection, and laying the groundwork for the project. This involves forming a dedicated project team, setting clear objectives, and defining the system’s detailed requirements.

The project team plays a central role in shaping the implementation, overseeing the timeline, allocating resources, managing daily operations, and making critical product and configuration decisions.

This team usually consists of an executive sponsor, a project manager, and representatives from key departments that will use the ERP system. Senior management involvement is essential to securing necessary resources and ensuring company-wide adoption of the new system. The team may engage an external ERP consultant or implementation partner to provide specialist expertise in system configuration and deployment. Internal experts, such as IT professionals and report developers, should also be included to support technical aspects and customise reporting tools.

A key goal at this stage is to analyse existing challenges, process inefficiencies, and specific requirements for the new ERP system. If the organisation has previously developed an ERP business case, it may have already outlined high-level goals such as a faster financial close, improved operational visibility, or preparation for a future IPO. These objectives will help refine the system design and shape workflow improvements.

During this phase, businesses often finalise their ERP selection as their requirements become clear. A crucial decision is whether to opt for an on-premises or cloud-based ERP system. On-premises solutions require purchasing and installing software and hardware within the company’s data centre, offering greater control but requiring significant IT expertise. Cloud-based ERP, on the other hand, is typically provided as a subscription service accessed via the internet, making it quicker to implement and reducing the burden on internal IT teams.

2. Design

The design stage builds on the detailed requirements and analysis of existing workflows to create a comprehensive blueprint for the new ERP system. This phase focuses on developing more efficient processes that fully leverage the system’s capabilities. Involving end users during this phase is crucial, as they have firsthand knowledge of current business operations. Their input not only helps refine the design but also fosters a sense of ownership, making it more likely that they will embrace the system once it goes live.

A gap analysis is often carried out at this stage to pinpoint any discrepancies between existing processes and the ERP’s standard functionalities. This can highlight areas where customisation may be necessary or where workflows should be adjusted to align more closely with the system’s best practices. The implementation team can then work with the ERP vendor or an external partner to ensure the new system is tailored to meet the organisation’s specific needs.

3. Development

With clear design requirements in place, the development phase can get underway. This stage involves configuring the ERP system and, where necessary, customising it to align with the redesigned workflows. It may also require integrating the new system with any existing business applications that will remain in use. For organisations implementing an on-premises ERP, this phase also includes installing the hardware and software infrastructure required.

Alongside software development, the team should create training materials to support users in transitioning to the new system. Another critical task at this stage is planning data migration, a complex process that involves extracting, transforming, and loading data from multiple sources – each with its own formats and potential inconsistencies. The project team must decide which data to migrate, ensuring only relevant information is transferred rather than attempting to move all historical records, many of which may no longer be useful. (More on data migration below.)

4. Testing

The testing and development stages often run in parallel. The project team may, for example, test individual modules, identify necessary adjustments, implement fixes, and then retest to ensure everything works correctly. In some cases, one module may still be under development while another undergoes testing. The initial phase should focus on verifying core system functionality, followed by more comprehensive testing that assesses the ERP’s full capabilities. This includes allowing selected employees to use the system for their daily tasks to ensure it meets practical business needs. Additionally, testing should cover data migration accuracy and incorporate early-stage user training.

Most ERP vendors provide tools to support both pre- and post-deployment training. However, alongside vendor resources, organisations should make full use of the training materials developed during the implementation process. Tailoring these materials to reflect employees’ specific workflows and responsibilities ensures they are well prepared to adopt the new system with confidence.

5. Deployment

This is the moment you’ve been working for – the go-live of your ERP system. Despite thorough preparation, be ready for potential challenges, as there are many moving parts and some employees may struggle to adapt initially. The project team should be on hand to provide guidance, answer questions, and resolve any early issues. If troubleshooting proves complex, your implementation partner can offer additional support. Keep in mind that it may take time for employees to fully adjust before the system delivers the expected efficiency gains.

Certain data can be migrated in advance, while time-sensitive information – such as active transactions – should be transferred just before going live.

Some organisations opt for a full-scale deployment of all ERP modules at once, while others take a phased approach, prioritising essential functions first and rolling out additional features later. To mitigate risk, some businesses choose to operate their legacy systems alongside the new ERP for a transitional period. However, running both systems simultaneously can increase costs and slow down productivity, so careful evaluation is needed.

6. Support & Updates

Supporting for your ERP system post-deployment is essential for keeping users happy and maximising the benefits to the business. During this phase, the project team’s role transitions to monitoring, gathering user feedback, and making necessary refinements. Some additional configuration or development work may be required as new features are introduced or adjustments made to improve usability. And new employees will need training as they join the organisation.

For businesses using an on-premises ERP system, regular software updates will need to be installed, and hardware upgrades may become necessary over time. In contrast, cloud-based ERP solutions typically receive automatic updates from the vendor.

Best Practices for ERP Implementation

Having a structured, phased approach to ERP implementation is important, but it’s not enough on its own. To ensure success, businesses must follow best practices at every stage of the process. Key considerations include:

Prioritise planning. It can be tempting to dive straight into the design and development stages, but skipping or rushing the initial planning phase can lead to major setbacks later. This stage is the foundation of the entire project, ensuring leadership support, clear objectives, and sufficient budget and staffing.

Emphasise support and training post-deployment. Some project teams see the system go-live as the final milestone. But for end users, it’s just the beginning. Ongoing support, troubleshooting, and system updates are crucial to long-term success. Equally important is comprehensive user training. Employees need to be comfortable navigating the system and adapting to new workflows. If external consultants were involved in implementation, their absence post-deployment should not leave employees struggling. A structured support and training plan will help the business fully capitalise on the ERP system’s benefits.

Be strategic about data migration. One common mistake is transferring all historical data to the new ERP without assessing its relevance. Much of this information may be outdated or redundant – does a decade-old order history add value? Are all listed suppliers still active? The implementation process is an opportunity to clean and refine company data. A clear migration plan should focus on filtering out obsolete records, correcting inaccuracies and ensuring only essential data is transferred to the new system.

Maintain clear and consistent communication. Open communication is essential at every stage of ERP implementation. Employees should be regularly informed about the purpose of the new system, the expected benefits, and key milestones throughout the process. Equally important is gathering feedback – listening to users before and after deployment helps identify concerns early and makes adoption easier.

Implementing an ERP system may be one of the most significant investments your business makes in terms of time, money, and resources. Its success ultimately depends on how well you plan, deploy and maintain it. Beyond the initial go-live, continuous evaluation and optimisation – along with gradually introducing new features – will help ensure long-term success and maximum ROI.

ERP Implementation Stages FAQ

Which phase of ERP implementation is the most challenging?

The difficulty of each stages depends on various factors, including the complexity of the chosen system. However, the planning and discovery stage is often one of the most demanding. Securing buy-in from stakeholders, ensuring the necessary time and budget allocation, and agreeing on a realistic project timeline can all be difficult. Also, rushing into later phases without a well-defined plan increases the risk of issues arising further down the line.

How can we prevent ERP implementation delays?

Make sure the first (discovery and planning) stage is as comprehensive as possible. This includes developing a realistic timeline and ensuring sufficient resources are allocated from the outset. With the number of moving parts in an ERP implementation, it’s easy for projects to overrun simply because the initial timeframe was too optimistic. Review progress at key milestones so the team can reassess the timeline and make adjustments if necessary.

Do the implementation stages differ between cloud ERP and on-premises ERP?

While both deployment models follow the same broad implementation phases, the tasks within each stage can differ significantly. A key distinction is during the early phase, where on-premises ERP requires hardware installation, which often extends the project timeline. On-premises systems typically demand more hands-on IT involvement throughout, for example, for configuration, maintenance, and updates.

Why is executive sponsorship crucial in the early ERP phases?

Strong executive support is critical to the success of an ERP implementation. With the project likely to be competing for resources with many different priorities, having a senior leader such as a CEO or CFO as a champion ensures it receives the necessary support. Without executive sponsorship, project managers and departmental leaders may struggle to secure resources and get employees on side.

What does the ERP implementation lifecycle involve?

The ERP implementation lifecycle refers to the process of deploying an ERP system within a business. It is a structured journey comprising several phases, including discovery and planning, design, development, testing, deployment, and ongoing support. The duration of this lifecycle varies depending on the complexity of the business – but most ERP implementations take between six and twelve months.

What is the first phase of ERP implementation?

The first stage of ERP implementation is discovery and planning. During this phase, a dedicated project team is assembled to establish a structured ERP rollout plan that will guide the entire implementation process. Key activities include holding initial meetings, assessing existing challenges, outlining objectives, and documenting requirements. This phase also involves selecting the right ERP system, ensuring it aligns with the organisation’s needs and long-term goals.