ERP Implementation Lifecycle

Phases of ERP Implementation

Pre Selection screening

Hundreds of ERP vendors select five Eliminate those ERP not suitable for companys business process Study the strength and weakness of the ERP package eg: PeopleSoft is strong in HR but not in manufacturing, Baan is strong in manufacturing than in finance Selection based on
Product literature of the vendors How each ERP package evolved to which business it is best suited Help from external consultants ERPs used by similar companies Cost and time Implemenation hurdles

Package evaluation
Package to be implemented is decided in this phase Do it right the first time Little room for error While analyzing one has to keep in mind that
There is no PERFECT PACKAGE need is to find the perfect fit/ best fit / Good fit Not a one man decision Representatives(experts) from various departments

Selection/ evaluation criteria have to be prepared

Package evaluation
Evaluation criteria
Functional fit with companys business process Degree of integration between various components of the ERP system Flexibility and scalability User friendliness Quick implementation Ability to support multi site planning and control Technology -> Client server capabilities, DB independence, Security Availability of regular upgrades Amount of customization required Local support infrastructure Availability of reference sites Total cost Licensing + training + implementation + Maintenance + Customization + H/w requirements

Project Planning
Designing the implementation process Usually done by committee containing team leaders of each implementation group headed by ERP in charge (COO) It includes
Preparing time schedules and deadlines Roles and responsibilities Organizational resources People to head implementation Implementation team members and task allocation Preparing for contingencies Means of monitoring the implementation process Corrective actions when things get out of control

Gap Analysis
Most crucial phase for the success of the ERP implementation Creating a simple model of where we are now and in which direction we want to head in future Studying any functional gaps; Best ERP caters only 80% of companys needs Remaining 20%
Live with it Hopes of an upgrade (Low cost but risky) Third party product to fill the gap Design a custom program Altering ERP source codew

Re-Engineering
Human factors are taken in to account Two perspectives
Downsizing efforts but cost a cost cutting tool BPR approach
ERP and BPR are separate but closely related Technical implementation Business process integration

Configuration
Synchronizing company practices with ERP implementation rather than customizing Understand the various business processes and mapping them
Prototype in controlled environment helps to solve problems before actual go-live For eg: A accounting practice cannot be configured in the system

Implementation team training

Testing

Going live

End user training

Post implementation

Why do ERP implementation fail ?

Lack of top management buy-in, commitment and support
Mgmt not convinced about the importance of ERP and how it can be used as competitive weapon Not aware of benefits of ERP system and dangers of not having an ERP system If management supports employees also actively involve Detailed planning on procedures to be followed, tools to be bought and budget allocation Extensive research Provision to revise and update implementation process Research on ERP packages select one that matches companys requirements Never rush in purchasing decision Resistance of the users
Fear and Ignorance about the tool Fear of additional work or unemployment

Improper training and Budgeting

Use of wrong ERP tool

Lack of training

Myths regarding ERP Workforce wiling to learn new things and change to new technologies To change employee mindset top management support and proper training

Work culture of the organization

ERP Package selection

Why ERP?
Productivity improvements
Eliminating Data redundancy Steam lining processes Best Business practices

Increased Business Agility (capability of rapidly and efficiently adapting to changes)

Improved productivity + reduced Development time less time to market ERPs ability to better manage problems and fix solutions better customer satisfaction

Error reduction
Automate monotonous and repetitive tasks reduced error

Information integration
Legacy system info not up-to-date, current or accurate ERP latest info in any format instantly

Automation
Automate business processes and workflow reduces data entry errors and data duplication Improved development productivity

ERP Package selection and evaluation

Selection process Selection committee Handling the vendors Role of technology Selection criteria

Selection process
Hundreds of ERP vendors select five Eliminate those ERP not suitable for companys business process Study the strength and weakness of the ERP package eg: PeopleSoft is strong in HR but not in manufacturing, Baan is strong in manufacturing than in finance Selection based on
Fitness for the company Product literature of the vendors How each ERP package evolved to which business it is best suited Help from external consultants ERPs used by similar companies Cost and time Implementation hurdles

Once screening is done, respective vendors can be called for demos/ presentation

Selection committee
Selection committee to do evaluation process Comprises of Functional experts from various depts., the top managements (preferably COO) and consultants Should include representative of user community Managers, supervisors, clerical staff, QA people etc Usability, Performance and scalability apart from functional requirements

Handling the vendors

Vendors swamp with colorful presentation You should have pre prepared questions that addresses your concern Prepare minutes and make vendor sign it. Vendors
Show testimonials and practical demonstration References from other company where the ERP has been implemented Failure cases and reasons for failure Send marketing and technical representatives

Role of technology
Technology environment of the company
Business is being done H/w and S/W utilities Scrapping or upgrading the old system ? Select the components required from vendor Vendors assurance in writing that the existing system will be integrated smoothly and seamlessly with purchased components

Selection criteria
Multi language and multi curency spport Package should be international vendors should have global presence X installation out of which Y in your business sector Cost of package should be less than x Rupees Possible incremental module addition Implementation and post implementation support Commitment on training Interfacing with existing system Easy customization Vendors policy regarding updates, versions etc

Selection criteria
Independent research agencies