Vild Nord: Why conduct a preliminary analysis before your ERP project?

Preliminary analysis. Yes, we know. It sounds like a major project preceding an even larger project. But actually, we would argue that the preliminary analysis does not create unnecessary additional work. On the contrary, it ensures that you gain visibility on the gaps between as-is and to-be, so you can create a roadmap for how to get to where you want to be. So, what does a good preliminary analysis consist of, and what value can it provide? You will learn more about this in the article here – where we also persuaded Vild Nord to share their experiences. 

As a CFO or Finance Manager, when you are about to launch an ERP project, several concerns may arise. Naturally. Very few people have completed an ERP implementation, and if you have, you may have only done it once – a long time ago.

And we all know that when it comes to digitizing and automating support processes in the finance function, development is racing ahead.

Therefore, you can see a preliminary analysis as a kind of insurance that provides you with a plan and a validation hereof. Practically speaking, it gives you ...

1. Certainty about what can be done as standard, for example, when we talk about Business Central implementation
2. Help to ensure that you get the most out of your ERP system and its functionality
3. Visibility on the benefits realisation of the ERP project
4. Insight to do more than just a 'lift and shift' with your ERP implementation
5. A realistic estimate of the time and resources needed to complete a successful ERP project
6. A requirements specification – if necessary
7. The opportunity to revisit the long-term strategic direction with the transformation.

Those were the main points. In the following sections, we will delve deeper into the benefits you get from a preliminary analysis, while also discussing what it should contain.

If you are moving to a standard cloud ERP system, it is important that the preliminary analysis not only addresses the technical aspects, but is holistic in terms of what is needed for the transformation to be successful. A good preliminary analysis therefore requires a focus on all three cornerstones: processes, systems and organisation. To ensure the business-oriented perspective.

That being said, preliminary analyses can vary widely, and there can be many questions. Therefore, it is an important task to define the questions you want answered in the preliminary analysis.

For example, if you are implementing Business Central, you might benefit from getting answers to the following six questions:

1. What could the future IT system landscape look like?
2. Which ERP system should we choose – is Business Central the right one for us?
3. Which additional modules/surrounding systems should we use?
4. What optimisation or business projects are planned for the coming years?
5. How should the projects be prioritised?
6. What special needs will there be for a Business Central implementation?

These six questions help you become aware of the gaps between as-is and to-be, so you can create a roadmap for how to get to where you want to be. This is often essential for the success of the upcoming ERP project, as it ensures you choose the right strategy.

For example, the preliminary analysis might reveal that before the ERP implementation, you need to clean up your master data across the interdependent systems, as new functionality and/or integration may not work optimally otherwise.

Additionally, you will clarify whether your business has specific requirements for the solution that an ERP provider must consider in their offer for the ERP implementation.

A good preliminary analysis balances the necessary level of detail and does not consist of countless pages of text. And here, the description of all standards is a place where you can save your efforts.

Especially if you are implementing, for example, Dynamics Business Central or Dynamics F&O, it is not necessary to have a multi-page requirements specification for the ERP provider. Instead, focus on what goes beyond the expected standard solution, such as integrations, support for specific approval processes, use of alternative invoice templates for factoring etc.

Because, particularly in a modern cloud world, everything that surrounds the system is even more crucial for achieving success.

That being said, if you are in a company with many years behind it, moving away from a large, sprawling legacy system, then your ERP project is inherently a technical project. Therefore, it makes sense that your company should undertake a more grandiose preliminary analysis, including a thorough requirements specification.

This is because your need is significant to frame the requirements for your new ERP system, which must handle the same complexity as the old one. And the preliminary analysis should be predominantly technical in nature.

You know what you've got. But do you know what you want in the future?

A question that can be difficult to answer – also when it comes to ERP solutions. And precisely because Vild Nord was unsure of how they wanted their future setup, they had a preliminary analysis conducted.

In this section, you can read about what they gained from that investment.

"It was attractive for us to have a preliminary analysis conducted for four reasons. First, it would give an indication of what our future setup could look like. Second, an indication of what the financial aspect of it would be. Third, it would give us the opportunity to test the match with our external partner before the upcoming ERP project. And fourth, because we would be able to send the preliminary analysis to several ERP providers and compare offers if we did not wish to continue with the same advisor," says Kenneth.

As Kenneth talks about the process, it becomes clear that he has a lot of good things to say about having a preliminary analysis conducted. For him, it has been about getting a fresh perspective on the existing ERP setup as well as creating the framework to bring employees' insights to the table and room to elevate to a strategic level – because Vild Nord is growing ... well, extremely fast.

So the ERP solution they dreamed of needed to be one they could not outgrow right away.

"One of the surprising insights we gained from the preliminary analysis was how complex our existing setup actually was. And it became evident that it was more cumbersome than the alternative we could see in the future. Moreover, the preliminary analysis led us to pause or stop the implementation of several third-party software solutions that were supposed to integrate with our current ERP system. Because it would not make sense in the future ERP solution. This was because the preliminary analysis confirmed that Business Central – with all functions combined – was the right ERP system for us. Something we had actually concluded earlier, but which we were reassured and confirmed through the preliminary analysis," Kenneth elaborates.

He smiles and continues: "Regarding employee involvement, the feedback on the process has been very positive. They specifically mentioned that 'they were happy to see that the conversation they were a part of was concretized in the preliminary analysis.' They found that they were asked good questions –  some of which they had not thought of themselves, but which were incredibly relevant. So having employee interviews as part of the approach has been beneficial – both to bring necessary insights to the table and to give co-ownership of the upcoming ERP project."

At Vild Nord, primarily two departments were involved – Finance and Logistics & Production – as these are the two departments with the highest system requirements and the most interaction: "The interview process also gave them some room to describe and explain the state of affairs more clearly because it is easier to say to someone from outside. Which, in my opinion, only contributes positively to our upcoming ERP solution," Kenneth emphasises.

Kenneth suggests investing in a preliminary analysis: "Some might doubt whether it adds value and be tempted to skip it. But the preliminary analysis allows for both concretising the project and allocating budget and resources. And you have a different overview when you have moved some of the decisions to before the start of the actual ERP project."

Kenneth continues: "And in my opinion, it is always value-adding to get an external perspective. It helps you as a manager, as well as the company, to get out of the details and focus on the strategic level."