Description
This is a presentation describes ERP implementation methodology in detail right from identifying needs for implementing ERP package to user training.
ERP IMPLEMENTATION
ERP Implementation Methodology
Identification of the Needs for Implementing an ERP Package
The first step for implementing an ERP package is to identify the reasons for going in for an ERP solution for your business. This step prepares you for some basic questions like :
•Why should I implement an ERP package ?
•Will it be significantly improve my profitability?
•Will it lead to reduce delivery time for my products? •Will it enhance my customer satisfactions level in terms of cost , delivery time, service and quality? •Will it help reduce the cost of my products? •Will it enables me to achieve the same business with reduced manpower? •Will it enable me to re-engineer my business processes?
Along with it the other factors that should be taken into consideration are: • Need for quick flow of information between business partners • Effective management information system for quick decision making • Elimination of manual preparation of various statutory statements • Need for a high level of integration between various business functions
Evaluating the As-is Situation for Your Business
? In this step one needs to thoroughly understand
what existing business processes the organization is following to transact it’s business. ? The various business functions should first be enumerated . ? For example, procurement, production, sales , etc. ? Now the process used to achieve the business transaction should be listed in detail . ? The technique of process mapping can be used here .
The process map should give you the following details for any business process: •The total time that business process take to complete •The total no. of decision points involved •The number of departments or /geographical locations that the business process involves •The flow of information •The number of reporting points
Deciding Upon the Desired ‘Would Be’ Situation for Your Business
? In this step , we decide on what we want our
business process to finally look like. ? Here we use the techniques of benchmarking to ensure that the target set are comparable to best in the industry. ? Benchmarking can be done on various aspects of the business like cost , quality , lead time, service , etc.
Re-engineering of the Business Process to Achieve the Desired Results ? To achieve the new business process we
reengineer the existing processes in such a manner that ? The business process cycle time is reduced significantly ? The number of decision points are reduced to the bare minimum ? The flow of information is streamlined i/e. there is no unnecessary to-and fro flow of information between departments.
Evaluation of various ERP packages
In this step various ERP packages available in the market are evaluated with respect to the following aspects: ? Global Presence: Check the performance and acceptability of the package globally. ? Local Presence: Check how the package is performing in the local market – this gives an idea as to how well a package is taking care of the country specific business needs.
?Target
market: See which segment of the industry is basically aiming at . Some packages , for example are specific to process industry type of applications where as other caters specifically to discrete manufacturing . Choose a package that has a strong hold in your type of industry. ?Investment in R&D: Evaluate the package from point of view of investments the ERP vendor is making in R&D to continuously upgrade their product. A good investment in R&D is a healthy indication of the longevity of the package. ?Price: This is of course the main criterion that decides which package you will finally go in for.
?Modularity:
this aspect needs to be considered when you want to implement only some particularly some functions in the ERP package . The availability of the package as independent modules is a must in this case. ?Obsolescence: While considering the package it is essential to see what would be active life of the product before it becomes obsolete. As mentioned above the investment in R&D directly contribute to upgrade a package from time to time thus increasing it’s useful life.
?Cost
of implementation With large scale integration of ERP packages and the consequent complexity built into them, it has become essential to consider the cost of implementation which in some cases can be phenomenal. ?Post implementation support: Before deciding on an ERP Package it is advisable to check quality and range of post implementation that the vendor provides for it’s package.
Ease of implementation : This factor needs to looked into details because a quick , smooth and hassle free implementation is the key to successful transition from the legacy system. This in turn ensures that your business is not adversely affected in the transition period.
Finalizing of ERP Package
? After a through evaluation of all ERP packages
vis-à-vis the key factors of your business , the package best suited to your business needs is selected. ? The process of finalizing can be simplified by forming a matrix of key factors. ? You can then rate all the packages under these heads.
Installing the requisite hardware and network
? In this step one has to install the hardware
and network required for the chosen ERP package. ? The installation of the has to be well planned generally hardware arrive in time and lies idle due to delays in in the implementation . ? Also the induction of the hardware should be in phase manner to avoid the blockage of capital.
Finalizing the implementation consultants
? The factors which go into the selection of the
consultant are: ? Skill set available with the consultant (application Area) ? Installation base of consultant ? Industry specific experience(knowledge of various industry specific business processes) ? Finance involving in hiring the particular consultant
Implementation of ERP package
? The 15 broad steps involved in the
implementation of the ERP package are as follows. ? Each step is to be added in the process of implementation.
1]Formation of implementation team
? It is of great importance to form an
implementation team consisting of knowledge users from all functions along with IT personnel and personnel from implementation consultant. ? From the people chosen , the project manager and project leaders and the module leaders should be identified and also a steering committee should be formed .
The functions of steering committee are :
• To monitor the progress of implementation • To see that the schedule of the implementation is adhere to
• Resolve any problems that come up in the due course of the implementation
•Allocation of resources for the implementation
2]Preparation of implementation plan:
? An important task is preparation of detailed
implementation plan that covers the total implementation process. ? Here various project management techniques like CPM, PERT charts can be used .
The implementation plan should have clear components and should include the schedule for the following: • Training of the project team • Mapping of business processes on to the software
• Function wise implementation
• Customization • Uploading of data • Test runs • Parallel run
• Crossover
3]Mapping of business processes on to the package
? This is a crucial stage where the
reengineering processes are mapped on to the software . ? In mapping the implementation team tries to fulfill the user requirements by making use of standard functionality available in the software . ? However if the requirement are not covered by software fully , then next step of implementation i.e. gap analysis comes into picture.
4]Gap analysis
? As mentioned above the user requirements that
cannot be mapped directly on the standard system form a basis of gap analysis. ? Here all such uncovered requirements are complied into a gap analysis report
The gaps then are classified into following three heads: •1] Gaps which can be taken care of with little programming.
•2]Gaps which are involved extensive programming efforts and hence required extra resources
•3] Gaps which can not be taken care of in the system
For the first Category , The project team directly take actions and resolve the issue.
For second and third category of gaps , how ever the steering committee comes forward and decides on extra resource allocation or process change respectively.
5]Customization
? Once the process mapping and gap analysis is
done , the actual customizing starts. ? In this step first the customizing needs are chalked out and then the actual job is handed over to the respective functional teams.
6]Developments of user specific reports and transactions:
? As mentioned under gap analysis any user
requirements not covered by standard systems need to be provided by extra programming efforts. In this step the required reports and transactions are created.
7]Uploading of data from existing Systems
? With customizing in place , the system is now
ready to receive the master and transaction data from the existing system. ? In this step programmed transfer of data takes place from the existing system to new system. ? To avoid wrong tabulation of master data transfer process needs to be thoroughly checked in the trial runs at times it to involves a lot of programming efforts.
8]Test Runs
? In this step , the test runs on the system are
started . ? Sample transactions a tried to see whether the customizing and the master data uploading is error –free. ? The result of sample transaction is evaluated and any changes required in setting to get the desired results are incorporated
9]User Training
The training of the users can be started alongside the test runs.Users belonging to different functionalities are trained in their respective functions .Normally user training includes: ? Logging in and logging out ? Getting to know the system ? Navigating through the various menu paths ? Trying sample transaction in respective function
10]Parallel Run
? With the successful test runs and user training
in place , the parallel run of the system can now started . ? In the parallel run , the business transactions are carried out in both through the existing as well as through the new system. ? The implementation team then takes care of any lacunae which comes to light during the parallel run.
11]Concurrence from user on satisfactory working of system
? If the parallel run is the satisfactory and error –
free , error that have come up have resolved , the user may be asked for their final approval.
12]Migration to new system
? When the parallel run has been successfully tried
for reasonable length of time and when the user and the implementation team fell absolutely confident , it is time to go live.
13]User Documentation
? User Documentation includes the details on
hoe to carry out the various transactions . ? It is different from regular ERP package documentation in the sense that it is more specific in nature than general documentation. ? It only covers alternatives that are being used in particular business so as to make it easy for the user to understand and use them.
14]Post implementation Support
? Post implementation Support usually involves
queries from user, minor changes in the report formats , as well as small changes in layout of various printed formats like purchase orders etc.
15]System Monitoring and fine Tuning
? In this phase the IT people monitor the system
closely to see the performance aspects and fine tune the database and other administrative aspect of the system so that the user can derive the best performance from it.
doc_680241282.ppt
This is a presentation describes ERP implementation methodology in detail right from identifying needs for implementing ERP package to user training.
ERP IMPLEMENTATION
ERP Implementation Methodology
Identification of the Needs for Implementing an ERP Package
The first step for implementing an ERP package is to identify the reasons for going in for an ERP solution for your business. This step prepares you for some basic questions like :
•Why should I implement an ERP package ?
•Will it be significantly improve my profitability?
•Will it lead to reduce delivery time for my products? •Will it enhance my customer satisfactions level in terms of cost , delivery time, service and quality? •Will it help reduce the cost of my products? •Will it enables me to achieve the same business with reduced manpower? •Will it enable me to re-engineer my business processes?
Along with it the other factors that should be taken into consideration are: • Need for quick flow of information between business partners • Effective management information system for quick decision making • Elimination of manual preparation of various statutory statements • Need for a high level of integration between various business functions
Evaluating the As-is Situation for Your Business
? In this step one needs to thoroughly understand
what existing business processes the organization is following to transact it’s business. ? The various business functions should first be enumerated . ? For example, procurement, production, sales , etc. ? Now the process used to achieve the business transaction should be listed in detail . ? The technique of process mapping can be used here .
The process map should give you the following details for any business process: •The total time that business process take to complete •The total no. of decision points involved •The number of departments or /geographical locations that the business process involves •The flow of information •The number of reporting points
Deciding Upon the Desired ‘Would Be’ Situation for Your Business
? In this step , we decide on what we want our
business process to finally look like. ? Here we use the techniques of benchmarking to ensure that the target set are comparable to best in the industry. ? Benchmarking can be done on various aspects of the business like cost , quality , lead time, service , etc.
Re-engineering of the Business Process to Achieve the Desired Results ? To achieve the new business process we
reengineer the existing processes in such a manner that ? The business process cycle time is reduced significantly ? The number of decision points are reduced to the bare minimum ? The flow of information is streamlined i/e. there is no unnecessary to-and fro flow of information between departments.
Evaluation of various ERP packages
In this step various ERP packages available in the market are evaluated with respect to the following aspects: ? Global Presence: Check the performance and acceptability of the package globally. ? Local Presence: Check how the package is performing in the local market – this gives an idea as to how well a package is taking care of the country specific business needs.
?Target
market: See which segment of the industry is basically aiming at . Some packages , for example are specific to process industry type of applications where as other caters specifically to discrete manufacturing . Choose a package that has a strong hold in your type of industry. ?Investment in R&D: Evaluate the package from point of view of investments the ERP vendor is making in R&D to continuously upgrade their product. A good investment in R&D is a healthy indication of the longevity of the package. ?Price: This is of course the main criterion that decides which package you will finally go in for.
?Modularity:
this aspect needs to be considered when you want to implement only some particularly some functions in the ERP package . The availability of the package as independent modules is a must in this case. ?Obsolescence: While considering the package it is essential to see what would be active life of the product before it becomes obsolete. As mentioned above the investment in R&D directly contribute to upgrade a package from time to time thus increasing it’s useful life.
?Cost
of implementation With large scale integration of ERP packages and the consequent complexity built into them, it has become essential to consider the cost of implementation which in some cases can be phenomenal. ?Post implementation support: Before deciding on an ERP Package it is advisable to check quality and range of post implementation that the vendor provides for it’s package.
Ease of implementation : This factor needs to looked into details because a quick , smooth and hassle free implementation is the key to successful transition from the legacy system. This in turn ensures that your business is not adversely affected in the transition period.
Finalizing of ERP Package
? After a through evaluation of all ERP packages
vis-à-vis the key factors of your business , the package best suited to your business needs is selected. ? The process of finalizing can be simplified by forming a matrix of key factors. ? You can then rate all the packages under these heads.
Installing the requisite hardware and network
? In this step one has to install the hardware
and network required for the chosen ERP package. ? The installation of the has to be well planned generally hardware arrive in time and lies idle due to delays in in the implementation . ? Also the induction of the hardware should be in phase manner to avoid the blockage of capital.
Finalizing the implementation consultants
? The factors which go into the selection of the
consultant are: ? Skill set available with the consultant (application Area) ? Installation base of consultant ? Industry specific experience(knowledge of various industry specific business processes) ? Finance involving in hiring the particular consultant
Implementation of ERP package
? The 15 broad steps involved in the
implementation of the ERP package are as follows. ? Each step is to be added in the process of implementation.
1]Formation of implementation team
? It is of great importance to form an
implementation team consisting of knowledge users from all functions along with IT personnel and personnel from implementation consultant. ? From the people chosen , the project manager and project leaders and the module leaders should be identified and also a steering committee should be formed .
The functions of steering committee are :
• To monitor the progress of implementation • To see that the schedule of the implementation is adhere to
• Resolve any problems that come up in the due course of the implementation
•Allocation of resources for the implementation
2]Preparation of implementation plan:
? An important task is preparation of detailed
implementation plan that covers the total implementation process. ? Here various project management techniques like CPM, PERT charts can be used .
The implementation plan should have clear components and should include the schedule for the following: • Training of the project team • Mapping of business processes on to the software
• Function wise implementation
• Customization • Uploading of data • Test runs • Parallel run
• Crossover
3]Mapping of business processes on to the package
? This is a crucial stage where the
reengineering processes are mapped on to the software . ? In mapping the implementation team tries to fulfill the user requirements by making use of standard functionality available in the software . ? However if the requirement are not covered by software fully , then next step of implementation i.e. gap analysis comes into picture.
4]Gap analysis
? As mentioned above the user requirements that
cannot be mapped directly on the standard system form a basis of gap analysis. ? Here all such uncovered requirements are complied into a gap analysis report
The gaps then are classified into following three heads: •1] Gaps which can be taken care of with little programming.
•2]Gaps which are involved extensive programming efforts and hence required extra resources
•3] Gaps which can not be taken care of in the system
For the first Category , The project team directly take actions and resolve the issue.
For second and third category of gaps , how ever the steering committee comes forward and decides on extra resource allocation or process change respectively.
5]Customization
? Once the process mapping and gap analysis is
done , the actual customizing starts. ? In this step first the customizing needs are chalked out and then the actual job is handed over to the respective functional teams.
6]Developments of user specific reports and transactions:
? As mentioned under gap analysis any user
requirements not covered by standard systems need to be provided by extra programming efforts. In this step the required reports and transactions are created.
7]Uploading of data from existing Systems
? With customizing in place , the system is now
ready to receive the master and transaction data from the existing system. ? In this step programmed transfer of data takes place from the existing system to new system. ? To avoid wrong tabulation of master data transfer process needs to be thoroughly checked in the trial runs at times it to involves a lot of programming efforts.
8]Test Runs
? In this step , the test runs on the system are
started . ? Sample transactions a tried to see whether the customizing and the master data uploading is error –free. ? The result of sample transaction is evaluated and any changes required in setting to get the desired results are incorporated
9]User Training
The training of the users can be started alongside the test runs.Users belonging to different functionalities are trained in their respective functions .Normally user training includes: ? Logging in and logging out ? Getting to know the system ? Navigating through the various menu paths ? Trying sample transaction in respective function
10]Parallel Run
? With the successful test runs and user training
in place , the parallel run of the system can now started . ? In the parallel run , the business transactions are carried out in both through the existing as well as through the new system. ? The implementation team then takes care of any lacunae which comes to light during the parallel run.
11]Concurrence from user on satisfactory working of system
? If the parallel run is the satisfactory and error –
free , error that have come up have resolved , the user may be asked for their final approval.
12]Migration to new system
? When the parallel run has been successfully tried
for reasonable length of time and when the user and the implementation team fell absolutely confident , it is time to go live.
13]User Documentation
? User Documentation includes the details on
hoe to carry out the various transactions . ? It is different from regular ERP package documentation in the sense that it is more specific in nature than general documentation. ? It only covers alternatives that are being used in particular business so as to make it easy for the user to understand and use them.
14]Post implementation Support
? Post implementation Support usually involves
queries from user, minor changes in the report formats , as well as small changes in layout of various printed formats like purchase orders etc.
15]System Monitoring and fine Tuning
? In this phase the IT people monitor the system
closely to see the performance aspects and fine tune the database and other administrative aspect of the system so that the user can derive the best performance from it.
doc_680241282.ppt