Big Bang or Phased Implementation
Fundamentally, there are two main strategies for ERP implementation:
a Big Bang strategy, where all locations, processes, and functionality are included in one unified implementation project, and a Phased strategy, where—put simply—the elephant is divided into smaller, more digestible pieces.
The primary advantages of a Big Bang strategy are that it takes less time to complete a full implementation across all locations, enabling synergy gains to be realized more quickly. Likewise, the number of interfaces can be minimized compared to phased strategies.
However, the disadvantages of the Big Bang strategy are that it is highly resource-intensive during the project and places significant demands on strong project management and firm anchoring of the project at the highest executive level. The scope and complexity of processes combined with political disagreement across locations can significantly increase the risks associated with this strategy.
The phased strategy can, for example, be structured as a Slim Big Bang, where the implementation is carried out for all locations within the same project, but with limited functionality and business processes in the first phase. In subsequent phases, the scope of functionality and processes is expanded. Another approach is the Common Core/Rollout strategy, where a solution template is developed after implementing in the parent company. This template is then used for rolling out the ERP solution to individual locations, with one or more locations per phase or cycle.
The phased strategy can, of course, be a combination of these variants.
We most often see the Big Bang strategy used in companies with no or very few foreign locations, where the ERP solution must be implemented and where processes and functions are largely identical across locations. If Big Bang is to be implemented in a company with multiple locations, it requires standardized and harmonized processes across the organization.
A Common Core/Rollout approach, based on a shared common core or template, will typically include a subset—larger or smaller—of the full parent company solution, depending on which processes and functions need to be supported in the rollout. For a manufacturing company with factories abroad, the template will typically be quite extensive, whereas it will be smaller if only sales subsidiaries/offices are included. The template is often developed as part of the first rollout wave.
Choosing an implementation and rollout strategy is unique to each company. The optimal strategy for a given implementation project depends on many factors. There are advantages and disadvantages to all strategies, but the factors to consider include:
- The balance between global and decentralized management
- Political and managerial support across locations
- The extent of shared processes and functions
- The degree of homogeneity within the organization
- The size of the company and its locations
- The number of countries, languages, and cultures involved
- Experiences from previous cross-organizational projects
- Existing ERP solutions
- Competitive and market pressures
- Economic potential
- Availability of budget and resources
Crucially, by establishing a common ERP platform with central master data and identical processes, the company achieves far greater transparency—both for management control and operational execution. Procurement, production, inventory, and sales can be coordinated across companies and countries, global customers and suppliers can be analyzed, financials can be consolidated more easily, and the validity of group-level management reporting becomes significantly higher.
At the same time, the cost of maintaining and further developing the overall ERP platform is reduced when using a shared platform, as economies of scale mean that the cost per user decreases as the user base grows.
