Hey {{first_name|there}},
This topic has been requested by so many people in the group, I had to delve into it.
ERP implementations can make or break your career in finance.
There are so many things that could go wrong with the implementation and it can cost millions of dollars to the business.
I have broken down this topic into two series:
1 - What you need to know before you start: terminology and concepts you need to know before we dive into next week’s episode.
2 - ERP implementation blueprint: what steps you need to take to make sure you nail your implementation.
Below I found a stat that shocked me from a Deloitte report on ERP implementations.
75%+ of ERP implementations fail. Most of it is not linked to technology.
When I started working on our ERP project, I thought it was just another system; something you buy, plug in, and watch everything run smoother.
I could not have been more wrong.
I quickly learned that:
· An ERP is not a product; it’s actually a platform.
· It doesn’t come pre-built; you need to build it yourself.
· It’s not just IT’s problem; it becomes the backbone of your business.
So if you’re a finance leader thinking about implementing one (or about to be voluntold to lead the project), this is everything I wish someone had told me upfront.
Let’s dive in.
🛠 THE CFO EFFECT PLAYBOOK (Part III)
Step One: ERP Basics
What exactly is an ERP?
ERP stands for Enterprise Resource Planning.
It’s the central nervous system of your company, connecting finance, operations, inventory, procurement, fulfillment, and reporting under one roof.
When it works, it’s magic: every transaction flows seamlessly across teams.
When it doesn’t, it creates chaos at scale.
Why companies implement ERP systems
Most companies implement an ERP for three reasons:
1. Scale and complexity: Multiple warehouses, channels, or product lines make spreadsheets unsustainable.
2. Visibility: Leadership needs real-time data instead of weekly reconciliations.
3. Control: ERPs bring consistency, compliance, and auditability.
If those are your pain points, you’re probably ready.
If not, maybe wait.
Implementing an ERP too early can slow you down instead of speeding you up.
Rule of thumb:
If your month-end close still works smoothly in Excel, don’t rush.
If your month-end close feels like a war room, start planning.
❌ When you don’t need an ERP
Not every company needs a full system overhaul.
Before you take the leap of faith, ask yourself:
Are we solving for scale or for sloppiness?
Have we maxed out our current tools (QuickBooks, Shopify, Airtable, Google Sheets)
Are we missing insights because of systems, or because of people and process?
An ERP is like upgrading from a car to a jet.
If you don’t have a trained pilot, you’re increasing risk.
Step Two: How it works
The core modules
Most ERPs are modular. You start small and expand.
Typical modules include:
Finance & Accounting: general ledger, AP/AR, fixed assets, and reporting.
Inventory & Warehouse: stock levels, movements, and locations.
Procure-to-Pay: purchase orders, vendor management, approvals.
Order-to-Cash: invoicing, fulfillment, collections.
Manufacturing / Production: bill of materials, work orders, scheduling.
CRM & Projects: customer management, job tracking, revenue recognition.
FP&A / BI: budgeting, forecasting, analytics.
Most mid-market companies start with finance, inventory, and order-to-cash, then layer the rest as they scale.
The big surprise: The ERP is an empty box
Here’s the first shocker: when you “buy” an ERP, you’re not buying a finished product.
You’re buying an empty box that you have to build yourself.
Every company fills that box differently:
You define how invoices are approved.
You design how inventory flows.
You set up the chart of accounts and reporting structure.
That’s why ERP implementations take months (sometimes years).
In other words, you’re designing how your company operates.
What’s a “Go-Live”?
“Go-Live” is ERP jargon for the day your new system officially replaces the old one.
It’s the moment when:
Historical data has been migrated.
Workflows are live.
Everyone stops using spreadsheets and runs the business through the ERP.
If you’re not ready, it’s chaos.
If you are, it’s one of the most rewarding milestones you’ll ever hit.
Good CFOs plan go-live like an audit: with checklists, rehearsals, and contingency plans.
Data migration: The hidden nightmare
Data migration means moving all your historical data: vendors, customers, SKUs, transactions, into the new system.
It’s messy.
You’ll discover duplicates, missing values, old codes that don’t match your new structure.
Expect it to take three times longer than planned.
Start cleaning data early, test in batches, and validate everything before go-live.
Bad data will make even the best ERP useless.
Step Three: Consultant language
Unless you have in-house ERP experts, you’ll need consultants to guide the process and implement the ERP.
There are two main pricing models:
1. Fixed fee (Project Quote):
You agree on a price for a defined scope.
✅ Predictable cost, easier to budget.
❌ Risk that consultants rush or cut corners to protect their margin.
2. Time & Materials (T&M):
You pay hourly for actual work done.
✅ Flexible, transparent, pay only for time used.
❌ They can overspend hours or push unnecessary work to increase billing.
Whatever model you choose, scope management is everything.
Define a detailed scope of work, track progress weekly, and approve every change request (every tweak costs money).
And most importantly, learn alongside them.
The less you depend on consultants, the faster you’ll get value and the less you’ll spend.
Common ERP terms you should know
A few words you’ll hear often during an ERP project:
Go-Live: the day your ERP officially replaces legacy systems.
Data Migration: importing historical data into the ERP.
Sandbox: a safe testing environment where you can try things without breaking production.
Scope of Work (SOW): the contract that defines what’s included (and what’s not).
Change Request: any formal change to the scope (almost always adds cost).
Hypercare: the intense post-go-live period when bugs surface daily.
Power Users / Champions: internal ERP experts who train and support others.
Integration: connections between your ERP and other systems (Shopify, CRM, WMS, etc.).
Learn this language early; it’s how you stay in control.
The Real Goal of an ERP
The purpose of an ERP isn’t automation.
It’s alignment, across data, processes, and people.
When designed well, an ERP unifies your company around a single source of truth.
When done poorly, it fragments your operations even more.
So before you start, be crystal clear on why you’re implementing it.
Visibility? Scalability? Control? Speed?
That “why” becomes your North Star through the entire project.
The Practical Takeaway
ERP systems are empty frameworks, not plug-and-play tools.
Don’t rush in. Small teams with simple operations often don’t need one yet.
Data migration is brutal. Start cleaning early.
Consultants need management. Scope tightly, review weekly, and learn the system yourself.
Understand the jargon: it’s your project, control language.
Go-Live isn’t the end. It’s the start of running your business on a new backbone.
Remember: the ERP’s success depends more on people and process than on software.
My Final Word
An ERP won’t save your company, but it will expose how it really operates.
If your processes are messy, your data inconsistent, or your people unaligned, the ERP will magnify it all.
That’s why the CFO’s role isn’t just to approve the budget, but to architect the backbone of how information flows through the business.
Before you start, ask yourself one question:
Are we implementing this to gain control or to hide chaos under new software?
Because an ERP is only as good as the discipline behind it.
Build it with clarity, consistency, and collaboration, and it will become your company’s nervous system.
Build it in a rush, and it becomes an expensive monument to indecision.
P.S.: If you can leave a quick review below, it would mean the world to me, plus that will help us improve. ⬇️
What did you think of this week’s edition?
Next Week’s Episode:
🔜 ERP implementation blueprint
Every growing company reaches the same breaking point:
The spreadsheets no longer reconcile.
The data doesn’t match.
Everyone’s running their own version of the truth.
That’s when someone says, “We need an ERP.”
And they’re right. But they’re probably underestimating it.
Because here’s the reality no one talks about:
Over 75% of ERP implementations fail.
Not because of the software, but because companies treat it like a tech project instead of what it really is: a business transformation.
Next Sunday, I’ll show you exactly how to design an ERP that becomes your company’s backbone:
✅ How to scope your ERP like a CFO, designing for the future instead of replicating the past
✅ How to fix your people and processes before touching the system
✅ How to test, train, and build company-wide champions that ensure adoption actually sticks
✅ How to architect your ERP for FP&A visibility from day one
An ERP implementation not managed properly will amplify the noise in your business.
When it’s built right, it becomes your operating advantage.
If you’re ready to make sure your next ERP implementation actually works and builds the discipline your business needs to scale, you don’t want to miss this episode.
♻️ Share the Movement
If this helped you think differently, pay it forward:
👉 Share this on LinkedIn with a note like:
“ Stop reporting the past, and start architecting the future.”
Disclaimer:
This content is for informational and educational purposes only and should not be construed as financial, legal, or professional advice. Always consult with a qualified advisor before making any business or financial decisions. The author and publisher disclaim any liability for actions taken based on this content.
Talk soon,
