Practical -2

Aim: Study on ERP System Selection & Implementation

System Selection:
An ERP system selection methodology is a formal process for selecting an enterprise resource
planning (ERP) system. Existing methodologies include:

SpecIT Independent Vendor Selection Management.

Kuiper's funnel method.

Dobrin's 3D decision support tool.

Clarkson Potomac method.

A proper system selection methodology

To address the common mistakes that lead to a poor system selection it is important to apply key
principles to the process, some of which are listed hereunder:
Structured approach
The first step in selection of a new system is to adopt a structured approach to the process. The
set of practices are presented to all the stakeholders within the enterprise before the system
selection process begins. Everyone needs to understand the method of gathering requirements;
invitation to tender; how potential vendors will be selected; the format of demonstrations and the
process for selecting the vendor. Thus, each stakeholder is aware that the decision will be made
on an objective and collective basis and this will always lead to a high level of co-operation
within the process.
Focused demonstrations
Demonstrations by potential vendors must be relevant to the business. However, it is important
to understand that there is considerable amount of preparation required by vendors to perform
demonstrations that are specific to a business. Therefore it is imperative that vendors are treated
equally in requests for demonstrations and it is incumbent on the company [and the objective
consultant assisting the company in the selection process] to identify sufficient demonstrations
that will allow a proper decision to be made but will also ensure that vendors do not opt out of
the selection process due to the extent of preparation required.

Objective decision process

"Choosing which ERP to use is a complex decision that has significant economic consequences,
thus it requires a multi-criterion approach." There are two key points to note when the major
decision makers are agreeing on selection criteria that will be used in evaluating potential
vendors. Firstly, the criteria and the scoring system must be agreed in advance prior to viewing
any potential systems. The criteria must be wide-ranging and decided upon by as many objective
people as possible within and external to the enterprise. In no circumstance should people with
affiliations to one or more systems be allowed to advise in this regard.
Full involvement by all personnel
The decision on the system must be made by all stakeholders within the enterprise. "It requires
top management leadership and participation it involves virtually every department within the
company". Representatives of all users should:

Be involved in the project initiation phase where the decision making process is agreed;

Assist in the gathering of requirements;

Attend the Vendor Demonstrations;

Have a significant participation in the short-listing and final selection of a vendor.

System Implementation:
ERP covers the technique and concepts employed for the integrated management of business as
a whole,
ERP packages are integrated software packages that support the above ERP concepts.
ERP lifecycle is in which highlights the different stages in implementation of An ERP.

Different phases of ERP

Pre evaluation Screening
Evaluation Package
Project Planning

 GAP analysis
Reengineering
Team training
Testing
Post implementation

Compan
y
Manage
ment

Go
ahead

PreEvaluation
Package
Screening
Evaluation
Project
Planning

ERP
Vendors

Gap Analysis

Reengineerin
g

Configuration

Implementati
on Team
Training

Testing

End-User
Training

Going Live
Post
Implement
ation
Phase

Pre-Evaluation Screening Or Pre-Implementation

Pre-Evaluation Screening is the phase which starts when company decides to go for a
ERP System, the search for perfect solution starts.

It is very time consuming process to select few where all claims be the best, it is just
superficial study of package.

Not all packages are same each has its own weakness and strength.

While making the analysis it is good to investigate the origins of the different packages.

Some packages can be good in some areas while in other sectors they may not.

Once few packages are screened detailed evaluation process starts.

Decision for perfect package

Number of ERP vendors

Screening eliminates the packages that are not at all suitable for the companys business
processes.

Selection is done on best few package available.

Package must be user friendly

Regular up gradation should available.

Package Evaluation

Package Evaluation process is one of the most imp phase of the ERP implementation ,
because the package you select will decide failure or success of project.

There is little room for error in this as ERP packages are so expensive once purchased
can not switch to another.

While making the analysis the imp point is nothing is perfect , imp here is whether it is a
perfect fit or good fit.It is impossible to get a system which will perform exactly as the
company does business but aim is to get least no of differences

Project Planning Phase

This is the phase which plans that designs the implementation process.

In this phase details of how to go about implementation, schedules and deadlines etc are
decided.

Roles and responsibilities are identified and assigned.

This is phase which will decide when to begin, how to do it and when the project is
supposed to be completed and what to do in contingencies. Their is a committee for this
and which is suppose to meet periodically throughout cycle to review process and chart
future course of action

Project Planning phase (Project schedule)

This is the phase that designs the implementation process.

In this phase the details of how to go about the implementation are decided.

Time schedules, deadlines, etc for the projects are arrived at & the project plan is
developed.

Roles are identified & responsibilities are assigned.

The resources that will be used for implementation efforts are decided & the people who
are going to be in-charge of implementation are identified.

Team members are selected & task is allocated.

This phase decides when to begin the project, how to do it & when is it suppose to be
completed.

Planning is done by the committee constituted by team leaders.

Project Planning phase (Decision of the phase)

This phase plans what to do in case of contingencies, how to monitor the progress of the
implementation.This phase also decides what control measures should be installed &
what corrective measures or actions should be taken when things get out of control.

Project Planning phase (Team leader)

The project planning is usually done by a committee constituted by the team leaders of
each implementation group.

The committee will be headed by the ERP in-charge (i.e. the CIO or COO).

The committee will meet periodically to review the progress & chart the future course of
action.

PROJECT PLANNING
PHASE
Project schedule

DESIGN IMPLEMENTATION
TIME SCHEDULES, DEADLINES,
PROCESS
ETC
RESOURCES ARE NEEDED AND
IMPLEMENTATION IDENTIFIED
Decision of phase
CONTINGENCIES, MONITOR THE
PROGRAM, CONTROL MEASURES ,
Team leader
CORRECTIVE ACTIONS
PLANNING IS DONE BY TEAM
LEADERS
COMMITTEE
WILL BE HEADED BY
INCHARGE

GAP ANALYSIS

Gap analysis is a phase in the ERP implementation, where the organization tries to find out
the gaps between the companys existing business practices & those supported by the ERP
package.

This is the process through which companies create a complete model of where they are now
& where they want to head in the future.

LIVE W/O A FUNCTION

RE-ENGINEERING:

It is in this phase that the human factors are taken into account.

Two different connotations

1st one is the controversial, involving the use of ERP to aid in downsizing efforts.

There have been occasions where high level executives have invoked the reengineering
slogan & purchased an ERP package with the aim of reducing number of employees.

While every implementation is going to involve some change in job responsibilities, so it

is the best to treat ERP as an investment as well as cost-cutting measure, rather than a
downsizing tool.

Downsizing is a business practice that may have its place, but it should not be cloaked
within the glossier slogan of reengineering.

The 2nd use of the word re-engineering in the ERP field refers to an ERP implementation
model initially designed & used.

REENGINEER
Human factor taken
into account
ING
Downsizing effort
Downsizing effort
BPR approach

TEAM TRAINING:

When the configuration is taking place the implementation team is being trained not how
to use the system, but how to implement it.

This is the phase where the company trains its employees to implement & later run the
system.

The ERP vendors & the hired consultants will leave after the implementation is over.

Good in-house team

For the company to be self sufficient in running the ERP system, it should have a good
in-house team that can handle the various situations.

Thus, it is very vital that the company recognizes the importance of this phase & selects
those employees who have the right attitude- people who are willing to change, learn new
things & are not afraid of technology- & good functional knowledge.

TESTING:

This is the phase where you try to break the system.

Here we reach a point where we are testing real case scenarios.

The system is configured & now we must come up with extreme case scenarios- system
overloads, multiple users logging on at the same time with the same query, users entering
invalid data, hackers trying to access restricted areas & so on.

The test case must be designed specifically to find the weak links in the system & these
bugs should be fixed before going live.

POST IMPLEMENTATION (MAINTENANCE MODE):

Important factors

One important factor that should be kept in mind is that the post implementation
phase is very critical.

Once the implementation is over the vendors & the hired consultants will go.

Necessary enhancements & upgrades

There should be people within the company who have the technical processes to
make the necessary enhancements to the system as & when required.

The system must be upgraded as & when new versions or technologies are
introduced.

Training is needed

Everyone who uses these systems needs to be trained on how they work, how they
relate to the business process & how a transaction ripples through the entire
company whenever they press a key.

The training will never end; it is an ongoing process; new people will always be
coming in & new functionality will always be entering the organization.

Maximum value for these input

Living with ERP system will be totally different from installing them.

However, an organization can only get the maximum value of these inputs if it
successfully adopts & effectively uses the system.

POST
IMPLEMENTATION
Most important & critical
factor
Vendors & consultants will go
Necessary enhancements &
Training
needed
upgrades isare
made for those
who
use the
Training
is ansystem
ongoing process
Maximum value for this input