ERP Implementation: As a Project

ERP implementation lifecycle focus on the ERP project which is carried out to make ERP up and

running. ERP project is likely to go through different phases like any other project. Most often

these phases do not necessarily depend on one another in a sequence, i.e. one phase might start

before previous phase has finished.

Enterprise Resource Planning (ERP) systems have fundamentally changed the work of IT

organizations. The sheer size and complexity of ERP implementations makes managing these

projects difficult. There are really two basic sides to ERP management, people and technology.

An ERP package touches the entire organization and can affect nearly every employee. And in

some cases, an ERP project manager may not be able to know who will be affected, which can

lead to some nasty surprises. One mismanaged ERP implementation left a southeastern

electronics manufacturer unable to accept deliveries and nearly closed a plant.

It's also difficult to get a clear vision of the technological portion of the implementation because

of the vast combination of hardware and software involved. The project manager must cope with

thousands of parts. Whether you are implementing one module or multiple modules, you must

ensure consistency and full integration across the various subprojects, which is an enormous

effort, even for an experienced system architect.

A list is presented below on the basis of a survey of experienced ERP project managers from

various corporate IT departments and Big 5 consulting companies, and assembled an unofficial

list of the major problems faced by ERP project leads and managers. Almost everyone

mentioned size first. Staff problems and organizational politics also ranked in the top ten.

Top 10 ERP Project Management Headaches

Rank Issue

1 Project Size

2 Staffing (Includes Turnover)

3 Risk Management

4 Unreasonable Deadlines

5 Funding

6 Organizational Politics

7 Scope Creep

8 Unexpected Gaps

9 Interfaces

10 Resistance To Change

Lifecycle of ERP Implementation/ Phases of ERP Implementation Project:

An ERP Implementation Project Lifecycle generally includes the following phases.

Pre-evaluation Screening

Package Evaluation

Project Planning Phase

Gap-Analysis

Reengineering

Configuration

Implementation Team Training

Testing

Going Live

End-user Training

Post-implementation

Pre-evaluation Screening: When the company has decided to implement the ERP the search

for the convenient and suitable ERP package begins.

Package Evaluation: The objective of this phase is to find the package that is flexible

enough to meet the company’s need or in other words, software that could be customized to

obtain a ‘good fit’.

Project Planning Phase: This is the phase that designs the implementation process. Time

schedules, deadlines, etc. for the project are arrived at. The project plan is developed in this

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

project plan is developed, roles are identified and responsibilities are assigned.

Once the packages to be evaluated are identified, the company needs to develop selection

criteria that will permit the evaluation of all the available packages on the same scale.

Gap-Analysis Flexibility and scalability

Complexity

User friendliness

Quick implementation

It is better to have a selection committee that will do the evaluation process.

This phase will also plan the ‘What to do’ in case of contingencies; how to monitor the

progress of the implementation; The phase will plan what control measures should be

installed and what corrective actions should be taken when things get out of control.The

project planning is usually done by a committee constituted by the team leaders of each

implementation group headed by CIO.

Gap Analysis: This is the most crucial phase for the success of the ERP implementation.

Simply it is the process through which companies creating a complete model of where they

are now, and in which direction they want to head in the future. The trick is to design a

model which both anticipates and covers any functional gaps. Some companies decide to live

without a particular function.

Other solutions include:

Upgrade

Identify the third party product that might fill the gap

Design a custom program

Altering the ERP source code, (the most expensive

alternative; usually reserved for mission-critical

installation)

Reengineering: This phase involves human factors. In ERP implementation settings,

reengineering has two connotations. The first connotation is the controversial one, involving

the use of ERP to aid in downsizing efforts. In this case ERP is purchased with aim of

reducing the number of employees. Every implementation will involve some change in job

responsibilities as processes become more automated and efficient. However it is best to

regard ERP as investment and cost-cutting measure rather than a downsizing tool. ERP

should endanger business change but not endanger the jobs of thousands of employee.

The second use of the word ‘reengineering’ in the ERP field focuses on the Business Process

Reengineering (BPR).

The BPR approach to an ERP implementation implies that there are two separate, but closely

linked implementations-

Technical Implementation

Business Process Implementation

The BPR approach emphasizes the human element of necessary change within organizations.

This approach is more time consuming and has received a lot of criticism for creating a big

budget and extended projects. But those who support it argue that you cannot ignore human

element.

Configuration: This is the main functional area of ERP implementation. The Holy Grail

(unwritten rule) of ERP implementation is, synchronizing existing company practices with

the ERP package rather than changing the source code and customizing it to suit the

company. In this case business process has to be understood and mapped in such a way that

the incoming ERP solutions match up with the overall goals of the company. It is not

required to shut down company operations while you do a mapping process. Instead a

prototype (a simulation of the actual business processes of the company) will be used. The

prototype allows for thorough testing of the “to be” model in a controlled environment.

Configuring the system reveals both the strength and the weaknesses of the company

business processes. It is important for the success of ERP implementation that those

configuring the system are able to explain what won’t fit into the package where the gaps in

functionality occur.ERP vendors are constantly make efforts to lower configuration costs.

Strategies that are currently being done include automation and pre – configuration.

Implementation Team Training: Synchronously when the configuration is taking place, the

implementation team is being trained. This is the phase where the company trains its

employees to implement and later, run the system. 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

solutions. Thus the company must realize the importance of this phase and selects right

employees with good attitude.

Testing: This is the point where you are testing real case scenarios. The test cases must be

designed to specifically to find the weak links in the system and these bugs should be fixed

before going live.

Going Live: This is the phase where all technicalities are over, and the system is officially

declared operational. In this phase all data conversion must have been done, and databases

are up and running; and the prototype is fully configured and tested. The implementation

team must have tested and run the system successfully for some time. Once the system is

‘live’ the old system is removed and the new system is used for doing business. The

implementation team must have tested and run the system successfully for some time. Once

the system is ‘live’ the old system is removed and the new system is used for doing business.

End-user Training: This is the phase where the actual users of the system will be trained on

how to use the system. The employees who are going to use the new system are identified

and their skills are noted.

Based on their skill levels are divided into groups. Then each group is given training on the

new system. This training is very useful as the success of the ERP system is in the hands of

end-users. The end-user training is much more important and much more difficult than

implementation team training since people are always reluctant to change.

Post-implementation: This is the very critical phase when the implementation phase is over.

There must be enough employees who are trained to handle the problem that might be

occurred when the system is running. There must be technical people in the company who

have the ability to enhance the system when required. Living with ERP systems will be

different from installing them. Projects for implementing the ERP systems get a lot of

resources and attention. However an organization can only get the maximum value of these

inputs if it successfully adopts and effectively uses the system.

Strategies of ERP Implementation

The following table is showing integration among “Steps of ERP Implementation Project” and

“Strategies of ERP Implementation Project”.

1. Strategic

Planning

2. Procedure

Review

3. Data

Collection and

Clean-Up

4. Training and

Testing

5. Go Live and

Evaluation

Assigning A

Project Team

Reviewing

Software

Capabilities

Collecting and

Converting

Master Data

Pre-test the

Database

Develop A Final

Go-Live

Checklist

Examining

Current Business

Processes and

Information Flow

Identify Manual

Processes

Master Data

Cleansing Verify Testing

Evaluate the

Solution

Setting

Objectives

Develop

Standard

Operating

Procedures

Master Data

Migration Train the Trainer

Developing A

Project Plan

Adding New

Data

Performing Final

Testing

5. Go Live and Evaluation

Big Bang Approach:

In Big Bang integration testing, all components or modules are integrated

simultaneously, after which everything is tested as a whole.

In this approach individual modules are not integrated until and unless all the

modules are ready.

In Big Bang integration testing all the modules are integrated without

performing any integration testing and then it’s executed to know whether all

the integrated modules are working fine or not.

This approach is generally executed by those developers who follows the ‘Run

it and see’ approach.

Because of integrating everything at one time if any failures occur then it

become very difficult for the programmers to know the root cause of that

failure.

In case any bug arises then the developers has to detach the integrated modules

in order to find the actual cause of the bug.

Phase by Phase Approach: A phased approach is based on the principle that any project

may be broken down into a series of steps i.e. phases. Each phase has a clear start point,

some well-defined tasks, and a defined end point. It is usual to review each phase to enable

those responsible for the project to make informed decisions about what to do next and why.

The end of a particular project phase will often be the production of a particular

deliverable. The deliverable can be a document such as a progress report, or a tangible

product such as an architect's model of a building.

The benefits of using a phased approach include:

reducing risk by working through the project step by step

ensuring the involvement of the right people at the right time

with the right tasks

reducing the complexity of planning and control by adopting a

two-level planning approach

maximizing control through the use of formal phase reviews

encouraging careful specification of requirements

encouraging the breakdown of work into understandable

packages

Waterfall Approach: Waterfall is a linear approach to development. In this methodology,

the sequence of events is something like:

Gather and document requirements

Design

Code and unit test

Performing system testing

Performing user acceptance testing (UAT)

Fix any issues

Deliver the finished product

In a true Waterfall development project, each of these represents a distinct stage of software

development, and each stage generally finishes before the next one can begin. There is also

typically a stage gate between each; for example, requirements must be reviewed and

approved by the customer before design can begin.

Vanilla Approach: An approach to investing or to business decision-making that is basic

and common. Some investors and businesses excel because they choose an ordinary, vanilla

strategy, while others succeed through innovation. In derivatives trading, a vanilla strategy is

the use of two different plain vanilla instruments, such as swaps, at the same time.

Oracle Application Implementation Methodology (Oracle AIM): The Application

Implementation Methodology (AIM) for Oracle Financial Services Analytical Applications is

designed to effectively plan and manage Oracle Financial Services implementations for Risk

and Regulatory Compliance. This methodology, offered by Oracle Financial Services

Consulting, is executed in phases, providing a systematic and end-to-end approach for

implementation. It addresses planning, managing, execution, design, construction, testing,

and support. The Application Implementation Methodology for Oracle Financial Services

delivers high-quality data to facilitate improved decision making.

The implementation phases of AIM include:

Start-up: This phase ensure that the basic prerequisites for onsite

implementation are accomplished. These activities need to be understood by

the user and implementation teams before initiating implementation.

Information study: This phase involves gathering information on a

customer's current business operations and their OLTP systems. It also

addresses collecting information based on the requirements specifications

and source extraction specifications.

Harmonization: This phase involves integrating Oracle Financial Services

Analytical Applications with the customer's information needs and addresses

customization requirements.

Testing and Go Live: This phase ensures that the system is ready to go live,

when the system functions meet customer specifications.

Project Management Tools: Some software help us to plan and design various phases and

tasks of a project. These are user friendly. Some popular project management tools are

Microsoft Projects

Open Source Project Management Tools (Such as, ProjectLibra,

OpenProject)

Success Factors of ERP Implementation

The following factors play major role in ERP Implementation:

Strong Executive Sponsorship

Focused Project and Scope Management

Minimize / Eliminate Customizations

Approved Solution Design

User/SME Participation and Engagement

Process Owner Led User Training and Sign-off

Documented User Procedures

Targeted Data Migration Strategy

Thorough System Testing

Knowledge Transfer

Roadblocks of ERP Implementation

The main obstacles of ERP Implementation are described below:

Resistance to Change: It is true that implementation of an ERP means change. The basis of

ERP is a complete remodeling of the company’s business processes. Change on this level

isn't comfortable and it will produce resistance. Part of the ERP implementation process is

meeting and overcoming the resistance to change. Without that, the ERP process will fail no

matter how technically successful the implementation is.

Inadequate Sponsorship: A successful ERP implementation needs strong, consistent

support from the top of the organization. Without that the implementation may lack the drive

to push through the inevitable barriers/roadblocks.

Unrealistic Expectations: ERP isn't a silver bullet that will solve all the companies’

problems and it isn't easy to implement. It's important that the organization’s expectations

don't outrun the reality of ERP.

Poor Project Management: A project as complex as implementing ERP needs competent

project management. This usually means assigning an experienced project manager to ride

shotgun on the project full time. Not having effective project management makes it very hard

for an ERP project to succeed.

No Compelling Case for Change: ERP means change, big change. There has to be a clearly

understood need for change to drive the ERP implementation forward. If there is no good

reason to change, or, more commonly, if the case for change isn't effectively communicated,

it is very hard to keep the momentum necessary for an effective ERP programmer.

Project Team Lacks Skills: The people working on the project must be capable of handling

the project, both the IT part and the business parts. One of the most common failings is to

consider an ERP implementation as an IT project and try to let IT run everything. This does

not work because the IT department is limited in view and in business related skills. The

project team needs a much broader perspective and skill set.

Scope Creep: While you can't know everything in advance, you should have the scope of

your ERP implementation well-designed well before you begin. Changing requirements in

the middle of the project adds time, money and confusion to the project. You can realistically

expect to make some changes, but strive to keep them as minor as you can.

No Change Management Program: Fundamentally, ERP is about business process change.

Without changes in the way you do things, you'll get only minimal benefits from an ERP

implementation, no matter how “successful.” Change doesn't happen naturally. It has to be

actively managed and a large part of an ERP implementation is managing change in a

consistent, systematic manner. It's important that the process for handling changes to

business processes is laid out at the beginning of the ERP effort and that it is adhered to

throughout the process.

No end to end Process View: The implementation team needs to focus on the entire process,

not just concentrate on certain areas. It is important that the people leading the effort have a

full 360-degree view of the implementation process and keep all aspects of the project in

mind at all times.

IT Perspective Not Integrate: This is the opposite of putting the ERP implementation under

the IT team and it is equally a barrier to a successful ERP project. Here IT is mostly ignored

in favor of emphasis on other parts of the project. IT may not be the totality of the ERP

implementation, but it plays a vital role and IT considerations can't be ignored.

Barriers/Roadblocks to ERP implementation have to be recognized and overcome in order to

have a successful project. The first step is to recognize the barriers/roadblocks. The next step

is to deploy your team in such a way that the barriers/roadblocks can be overcome.

Why most of the Projects Fail?

You may be wondered but it is true that 80% of projects fail due to some common reasons. The

reasons are very common and not too difficult to solve.

Let’s have a look on those problems:

1. Poorly Managed

2. Undefined

Objectives and

Goals

3. Lack of Management

Commitment

4. Lack of a Solid Project

Plan 5. Lack of User Input

6. Lack of

Organizational

Support

7. Centralized Proactive

Management

Initiatives to Combat

Project Risk

8. Enterprise

Management of

Budget Resources

9. Provides Universal

Templates and

Documentation

10. Poorly Defined Roles

and Responsibilities

11. Inadequate or

Vague

Requirements

12. Stakeholder Conflict

13. Team Weaknesses

14. Unrealistic

Timeframes and

Tasks

15. Competing Priorities

16. Poor Communication

17. Insufficient

Resources (Funding

And Personnel)

18. Business Politics

19. Overruns of Schedule

and Cost

20. Estimates for Cost

and Schedule are

Erroneous

21. Lack of Prioritization

and Project Portfolio

Management

22. Scope Creep 23. No Change Control

Process

24. Meeting End User

Expectations

25. Ignoring Project

Warning Signs

26. Inadequate Testing

Processes 27. Bad Decisions