Agile ERP
Im­plementation Implement complex Projects flexibly and proactively

Agility as a Key Competence: reacting quickly to new Requirements

Which animal comes to mind first when you think of Australia? Most likely the kangaroo! 🦘 But have you ever heard of the agile wallaby? The agile wallaby is native to tropical areas of Australia and is smaller and lighter than the kangaroo. As it is particularly nimble and can jump far, it is able to escape quickly if it encounters predators such as foxes or dingoes. This gives the agile wallaby an advantage and ensures its survival.

In the project context, the term “agile” stands for the mobility of organizations and people. Agile teams react proactively, quickly and flexibly to changes and unforeseen events.

This means that agile ERP project teams are able to make adjustments in the shortest possible time if the requirements or framework conditions of the project change. For many companies today, agility is even an essential key competence - especially with regard to digital transformation.

Agile Projects: Flexibility and Proactive Action through short Work Sprints and Iteration

How do agile ERP projects differ from traditional projects?

Agile project management is a way of working in which projects are implemented across teams in short, time-limited stages. The work stages are therefore also referred to as “sprints”. This also means that you do not plan the entire project process directly, but can always focus on precisely defined sections of the project and make adjustments depending on the situation. It is possible to refine project details independently and to set new priorities again and again.

The agile project methodology is based on iteration, as the individual project phases occur several times. Each individual iteration has an individual schedule and a goal. The intermediate results are always presented and evaluated transparently during the course of the project.

Waterfall Method: clearly defined Goal and high Planning Reliability

For comparison: in the traditional waterfall method all requirements and functionalities are specifically defined in advance and then developed and implemented in a single long implementation cycle. This method has proven itself for the implementation of ERP solutions that are close to the standard. The project phases can be clearly delineated so that you know exactly where you stand in the project at all times. Overall, you have a high degree of planning reliability.

Opportunities and Challenges of Agile ERP Implementations

An agile ERP implementation offers a lot of opportunities, but also presents your team with particular challenges, which are less common with the traditional method.

Opportunities (compared to the traditional Waterfall Method)

1. Higher flexibility
   A major advantage of agile ERP implementation is that the team is able to react more quickly if requirements change. There is short-term planning and thinking: nothing is set in stone, so to speak. This makes it much easier to make changes during the implementation process - also in terms of project scope. New requirements can be implemented directly in the next sprint.

2. Lower project risks
   As agile ERP implementations are carried out in short sprints, the risk of project delays and errors is often lower. Thanks to the short cycles and continuous tests and feedback loops, problems can be identified and resolved quickly. This prevents, for example, the concept not meeting the requirements at all or requirements being forgotten. With the agile methodology, the most you waste in the event of a misconception is the resources of a single sprint. This is because the error would be noticed and corrected when the sprint result is analyzed. If, on the other hand, an error is not noticed until the end of a waterfall project, it is usually much more expensive to correct it.

   

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3. Team building and improved collaboration
   In agile ERP projects, small, cross-functional teams work together from start to finish. These working groups are made up of team members with different expertise, which promotes collaboration between the different departments in the company. Through regular communication and coordination, departments and teams can work together even more effectively.

4. Strengthened trust and acceptance among users
   With traditional ERP implementation, the cooperation of end users is only required at a late stage: they are often suddenly presented with ready-made software that they have to work with from then on. This can overwhelm them, which is why they sometimes reject the system out of reflex. In an agile ERP project, the key users take part in the regular tests in the sprints, and after the sprint, all users can use the new subsystem directly. All those involved are therefore involved at an early stage and can get used to the new ERP system step by step. They also have the opportunity to provide feedback and have a say when it comes to the direction in which the system develops.

5. Innovation
   The agile way of working goes hand in hand with the strive for continuous improvement. Nowadays, it is important for companies to respond to customer demands (which can change constantly) in a real-time manner. Agility supports precisely these aspects by encouraging constant experimentation and feedback flow.

6. Further development of skills
   Since the agile project methodology strives for continuous improvement, a high willingness to learn is assumed and encouraged. This offers employees the opportunity to expand and deepen their skills, knowledge and competencies. The keyword is lifelong learning.

Challenges of the Agile Method

1. Less predictability and control
   Even if an agile project methodology is not complicated, it places high demands on the mindset and qualifications of those involved as well as on the corporate culture. As the end result is not fixed from the outset, neither a price nor an end date can be set. Nevertheless, a cost framework can of course be defined.

   By the way: if you tried to commit to something at the beginning, this would lead the agile principle ad absurdum. The management in particular (especially the finance and IT departments) have no choice but to accept this uncertainty.

2. Effort required to establish the agile mindset

   All team members must be familiar with the agile way of working and thinking and embrace it. This requires a rethink and possibly even a change in corporate culture. At this point, the support of management is also required. It is also necessary for the team to continuously adhere to this over the course of the project. This requires a great deal of discipline from those involved.

3. Strong dependencies between the parties involved
   The project team must constantly work together with the end users to achieve the best possible result - if there are problems in communication, this affects the project result.

Agile ERP Implementation in Companies: fast, uncomplicated Decision-making

All in all, the agile approach offers great advantages when it comes to implementing complex projects that cannot be planned in detail. In complex ERP projects, there are a large number of unknowns, resulting in dynamic interactions. The most important thing here is quick, uncomplicated decisions. Traditional, very long project phases, on the other hand, harbor an increased risk of bad investments.

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Conclusion: “It depends”

Despite all the advantages of the agile method, you should always carefully weigh up and decide on a case-by-case basis which approach is optimal for your ERP implementation. As already mentioned, an agile ERP implementation can always be a good idea if your company needs to respond quickly to changing requirements and wants to achieve a particularly high level of user acceptance.
On the other hand, the waterfall approach is suitable for ERP projects where the requirements are precisely defined, a clear plan is required and a standard solution is implemented. There are few “surprises” within these projects.