ERP Go-Live Day of Reckoning | Velosio

“Go-Live” is the final post of our ERP implementation series. If you want to learn more about prior ERP implementation phases, look at:

As the end goal of the entire implementation, the cut-over to the new ERP and go-live processing are the most important tasks in an ERP implementation.

If you’ve gotten to this point, the following tasks have probably been completed:

The system is configured per Fit/Gap requirements
Important functionality is tested and documented
Data and history loading have been completed and reconciled
Day one reports are completed and reconciled
All end users are trained

An implementation process flow example appears below. The process flow consists of five phases. Go-live is in the last implementation phase.

Note that the Go-Live and Project Close phase includes final deployment and conversion. Each of those two sub-phases need to be successfully completed before the cut-over and go-live can proceed.

In this context, final deployment means that all transaction cut-off processes have been set and workpapers completed. The workpapers need to be reviewed and tied back to the legacy system to ensure transaction integrity. If the data conversion and load process is completed correctly, only a week or two of data should be involved.

Any transaction activity remaining in the legacy system not already posted into the new ERP needs to be posted prior to live processing. Transaction activity posting can be completed via a file import or through manual data entry.

Many times, a combination of both methods is used. For example, if only a few vendors or customers were set up between the time of the final data load and the cut-over, it doesn’t make much sense to build a data import file, load it and reconcile. On the other hand, legacy processed transactions are nearly always imported due to the transaction volume involved.

Best Practices

This post discusses some best practices that can help ensure an effective go-live with minimal disruptions, during the cut-over period. Some “pitfalls” are also discussed which if not mitigated, often result in post go-live anxiety and processing errors.

Over the course of dozens of ERP implementations, five top go-live best practices have emerged:

Visible executive ownership
Build a detailed cut-over plan
Align resources and assign responsibilities
Address any open items
Build a back-out plan

Visible Executive Ownership

Visible executive ownership is the number one success driver across all ERP implementation phases. Executive ownership and buy-in are important components of the go-live process. Be sure to review the cut-over and go-live plans with executive team members.

See if they can live with cutting off all processing for a day. Since they’ll probably not be really excited about that, be sure your plan provides continuous parallel processing support if needed. Be sure though, that if parallel processing is needed, the executive team understands there is a genuine cost to this decision in complexity, time, and dollars.

While it may not be too popular with the staff, do the cut-over on a weekend to mitigate these issues.

Build a Detailed Cut-Over Plan

Building an accurate and complete cut-over plan is an important Go-live task. At a minimum, the cut-over plan should include the following:

Cut-off of all company processes with a financial impact
Complete final data and history load including reconciliation
Identifying pre-post cut-over transactions and reconciling the transactions
Cut-over review and approval process

Develop a transaction cut-off plan for the applicable departments. Department examples include warehouse receiving and shipping, accounting, accounts payable, sales order processing and accounts receivable. Ensure that the cut-off workpapers instructions are clear and review them with the applicable department managers.

Complete final history loading and reconciliation. Load and reconcile history up to the accounting period end before the cut-over. Using this approach keeps the level of reconciliation to a minimum. As a backup plan, you can load prior period history after the cut-over. Just remember though, that any financial reporting will need to be re-run in the new system. Keep masterfile changes in the current system such as new items, vendors and customers to the minimum required.

To learn more about data conversion and history loading see Data And History Load: How Much Is Enough?

When cutting over to a new system, the ability to capture pre and post cut-off transactions is crucial. The data collected is used in the transaction reconciliation process. Be sure that cut-off activity is documented in an accurate and organized manner using workpapers.

The Right Microsoft Partner Can Drive Business Success

When everything is completed, reconcile the transactions using the workpapers.

For example, review pre-cut-off transactions using the workpapers. In addition, run legacy system reports that would clearly identify those transactions if they were entered.

Complete the same process in the new ERP for post cut-over transactions. Generate the same types of reports. Reconcile the pre and post cut-over transactions to be sure that there are no or duplicated missing transactions.

Develop a process for cut-over review and approval. Focus on the transaction cut-offs. Remember, you can always load data history after the cut-over and post any corrections in the GL.

It’s much more important that transaction cut-offs are clearly documented, and any issues addressed.

Define the conditions to be satisfied prior to an approval to move forward with the cut-over and go-live.

Don’t shortcut the cut-over plan. The more effort that you put into the plan will translate into a more streamlined reconciliation process. Additionally, be sure that your workpapers are organized and accurately prepared. Your auditors will have a keen interest in reviewing this information during the YE audit.

Align Resources and Assign Responsibilities

Align your cut-over resources. Select personnel from each department involved. When possible, use manager level staff for this purpose. Assign responsibilities related to workpaper and source document collection, report review and reconciliation.

Have the accounting staff provide support to be sure that everything has been collected and reconciled properly.

Address any Open Items

If there are any open items related to the implementation, they should be completed prior to the cut-over. Use common sense here though. For example, some open-end user training issues are probably not as important as ensuring the system is functioning correctly and accurately, and that cut-off analyses have been successfully completed.

Review any open items with the executive team. Work with them in determining the next step (approval). If you’re uncomfortable, back off the cut-over date. No real damage is done in delaying the cut-over, except possibly incurring some additional costs. Remember though, you can only play this card a couple of times before it gets old, and the executive team becomes impatient.

Unfortunately, unrealistic implementation schedules are frequently set. More times than not, this practice results in short-cutting which causes already completed tasks having to be re-done. Short cuts and chaotic task completion do not support a timely implementation or cut-over. In fact, unrealistic implementation expectations rarely achieve the timelines set. When a company adopts an unrealistic implementation timeline, the chances of delaying the cut-over increase significantly.

Build a Back-Out Plan

A back-out plan is like insurance. You don’t want to ever use it, but if you need it, you’ll be happy you have it. Sometimes, a go-live approval is made and shortly thereafter, it becomes obvious that processing in the new ERP cannot continue.

In this situation you need to implement a back-out plan. Implementing the back-out plan is different than delaying the cut-over and should be used as a last resort.

Build a plan that describes how transactions processed in the new system will be identified, entered into the legacy system, and reconciled. The plan should include reconciliation processes like those used in the cut-off analysis.

When possible, use automated methods to load large amounts of data. Develop and test these methods in advance. If the data volume is relatively small, complete the process manually.

For the first couple of days after the cut-over keep transactions and masterfile changes such as setting up new items, vendors, and customers to a minimum. Just in case.

Enabling the Modern Worker with the Microsoft Platform

Another strategy to consider is using parallel processing after the cut-over. Parallel processing essentially means entering the transactions into both the legacy system and new ERP for several days or weeks. The transactions are reviewed and reconciled daily to ensure accuracy. At the end of the parallel processing period, the legacy system is “turned off” and transactions are processed in the new ERP only.

Again, before to committing to this strategy be sure that the executive team understands any processing and cost ramifications.

Finally, don’t delay the decision to implement the back-out plan. If things are not going well, pull the plug. While this decision may not sit well with the executive team, each day that you delay only makes the recovery process that much more difficult.

Conclusion

The cut-over is the most important part of an ERP implementation. Plan it right the first time and avoid headaches. Spend the time to build an effective and accurate cut-over plan.

Anticipate success, but plan for the worst-case scenario. Prepare a back-out plan and don’t be afraid to implement it.

Using best practices and being aware of pit-falls can help you realize and accurate cut-off and successful Go-live.