UNIT - 2

ERP Implementation Lifecycle

• There are two basic characteristics to all ERP implementation projects

1.Objectives

2.Phases ( or events)

Objectives of ERP implementationThe objectives include characteristics such as:

• Speed

• Scope

• Resource

• Risk

• Complexity

• Benefits

Different Phases of ERP implementation Life Cycle• Pre-Evaluation Screening• Package Evaluation• Project Planning Phase• Gap Analysis• Reengineering • Customization• Implementation Team Training• Testing• End-User Training • Going Live • Post Implementation Phase

Company Management

ERP Vendors Pre-Evaluation Screening

Package Evaluation

Project Planning

Gap Analysis Reengineering Configuration

Implementation Team Training Testing End-User Training

Go ahead

Going Live

Post Implementation Phase

ERP implementation Lifecycle

Life cycle

1. Pre-Evaluation Screening

• 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 external study of package.

• Each package 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.

2. Package Evaluation • Package Evaluation process is one of the most

important 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 important point is nothing is perfect , important 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.

Few important points to remember while evaluating software include:

• Flexibility & Scalability.• Degree of integration between the various components• Complexity• User Friendliness• Technology• Quick Implementation• Amount of Customization Required• Ability to support multi-site planning & control.• Local support infrastructure .• Total cost i.e license , training, customization etc.

3. Project Planning Phase

• This is the phase which plans and designs the implementation process.

• Details of how to go about implementation ,Time schedules and deadlines are decided.

• Roles and responsibilities are identified and assigned.• This phase will decide when to begin, how to do it and

when the project is supposed to be completed and what to do in emergency.

• Their is a committee for this and which is supposed to meet periodically through out cycle to review process and chart future course of action .

PROJECT PLANNING PHASE

Project schedule

Decision of phase

Team leader

DESIGN IMPLEMENTATION PROCESS

TIME SCHEDULES, DEADLINES, ETC

RESOURCES ARE NEEDED AND IMPLEMENTATION IDENTIFIED

CONTINGENCIES, MONITOR THE PROGRAM, CONTROL MEASURES , CORRECTIVE ACTIONS

PLANNING IS DONE BY TEAM LEADERS

COMMITTEE WILL BE HEADED BY INCHARGE

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

4. GAP ANALYSIS

• Importance of Gap Analysis– Gap analysis is a phase in the ERP

implementation, where the organization tries to find out the gaps between the company’s 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.

GAP ANALYSIS

Importance Main objective Different ways of finding

FIND OUT THE GAPS BETWEEN BUSINESS AND ERP PACKAGE

COMPANY CREATES A MODEL

DESIGN A MODEL

COVERS ANY FUNCTIONAL GAP

ALTERING THE BUSINESS TO FIT THE PACKAGE

UPDATING SOFTWARE

IDENTIFYING A PRODUCTDESIGNING A PROGRAM

LIVE W/O A FUNCTION

ALTERING SOURCE CODE

5. RE-ENGINEERING:

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

2. Two different connotations (association or suggestion )3. 1st one is the controversial, involving the use of ERP to aid in

downsizing efforts.4. The 2nd use of the word re-engineering in the ERP field refers to an

ERP implementation model initially designed & used.ton

• The BPR approach to an ERP implementation implies two separate, but closely linked implementations involved on an ERP site i.e. a technical implementation & a business process implementation.

• The BPR approach emphasis the human element of necessary changes within the organization, which is generally more

RE-ENGINEERING

Human factor taken into account

Downsizing effort

bPR APPROACH

6. CONFIGURATION

• IMPORTANCE OF CONFIGURATION

– This is the main functional area of the ERP implementation.

– Business processes have to be understood & mapped in such a way that the arrived solution matches with the overall goals of the company.

• THE PROTOTYPE

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

b. The prototype allows for thorough testing of the ‘to be’ model in a controlled environment.

c. As the ERP consultants configure & test the prototype they attempt to solve any logistical problems inherited in the BPR before the actual go-live implementation.

• STRENGTHS & WEAKNESSES

a. Configuring a company’s system reveals not only the strengths of a company’s business process but also- & perhaps more importantly- its weakness.

b. It is vital to the health of the company & to the success of the ERP implementation that those configuring the system are able to explain what won’t fit into the package & where the gaps in functionality occur.

CONFIGURATION

Main functional area

Solution match with goals

Prototype-allows for thorough testing

Attempt to solve logistical problem

Configuring reveals strengths & weaknesses

Important for success of ERP implementation

7. IMPLEMENTATION TEAM TRAINING

• 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.

IMPLEMENTATION TEAM TRAINING

Team is being trained for implementation of system

Run the system

Vendors & consultants leave after implementation is over

Good in-house team for handling various solutions

Select employees who have:

RIGHT ATTITUDE

WILLING TO CHANGE

LEARN NEW THINGS AND NOT AFRAID OF TECHNOLOGY

8. 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.

9. GOING LIVE• On the technical side, the work is almost complete-

data conversions is done, databases are up & running, & on the functional side, the prototype is fully configured & tested & ready to go operational.

• The system is officially proclaimed operational, even though the implementation team must have been testing it & running successfully for some time.

• But once the system is ‘live’, the old system is removed & the new system is used for doing business.

10. END USER TRAINING:

• Success & failure– The success or failure of an ERP system depends on how the actual users

use the system.– The most successful implemented ERP packages fail due to lack of end

user training.

• People are divided into groups– ERP system changes the job descriptions of the people, so it is important

to identify the people who are going to use the system. The current skills of the people are identified & they are divided into groups.

– Every group is provided training on the new system.

• Training sections– The training section gives the overall view of the system & how the

individual actions will be affecting the entire system.

– Every employee is also provided with the training of the job profile which he is going to perform.

– The training section should address about the new technologies & how people will be successful in making the change over.

– Atleast the end user training is important because the success of an ERP system depends upon it & this phase is equally difficult.

END USER TRAINING

Success or failure

Lack of training

Change job description

Groups all formed & training provided

Training gives over all view of system

Employee provided training

Address new technologies

Important & equally difficult

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 ( flow) 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 & upgrades are made

Training is needed for those who use the system

Training is an ongoing process

Maximum value for this input

Why ERP implementation fails?

• Lack of top management commitment and support

• Improper planning and budgeting

• Use of wrong ERP tool

• Lack of training

• Work culture of the organization