ERP Implementation Fundamentals :ERP Implementation Fundamentals


Agenda :Agenda What is an ERP System? Why implement an ERP system? How should ERP systems be implemented? Conclusion


What is an ERP System – definitions :What is an ERP System – definitions Simplistic Definition ERP - Enterprise Resource Planning Detailed Definition “ERP software is a multi-module application software that integrates activities across functional departments, from product planning, parts purchasing, inventory control, product distribution, to order tracking. ERP software may include application modules for the finance, accounting and human resources aspects of a business. ”


Historical system architectures :Historical system architectures Historically, companies created “islands of automation”. A hodge-podge of various systems that operated or managed various divergent business processes. Sometimes these systems were integrated with each other and sometimes they weren’t. Sometimes they were loosely interfaced and sometimes they were more tightly interfaced.


What is an ERP – Key Characteristics :What is an ERP – Key Characteristics Integration Seamless integration of all the information flowing through a company – financial and accounting, human resource information, supply chain information, and customer information.


What is an ERP – Key Characteristics :Packages Enterprise systems are not developed in-house Information System life cycle is different Mapping organizational requirements to the processes and terminology employed by the vendor and Making informed choices about the parameter setting Organizations that purchase enterprise systems enter into long-term relationships with vendors. Organizations no longer control their own destiny. What is an ERP – Key Characteristics


What is an ERP – Key Characteristics :Best Practices ERP vendors talk to many different businesses within a given industry as well as academics to determine the best and most efficient way of accounting for various transactions and managing different processes. The result is claimed to be “industry best practices”. The general consensus is that business process change adds considerably to the expense and risk of an enterprise systems implementation. Some organizations rebel against the inflexibility of these imposed business practices. What is an ERP – Key Characteristics


What is an ERP – Key Characteristics :Some Assembly Required Only the software is integrated, not the computing platform on which it runs. Most companies have great difficulty integrating their enterprise software with a package of hardware, operating systems, database management systems software, and telecommunications suited to their specific needs. Interfaces to legacy systems Third-party bolt-on applications Best of Breed Strategy What is an ERP – Key Characteristics


What is an ERP – Key Characteristics :Evolving Enterprise Systems are changing rapidly Architecturally: Mainframe, Client/Server, Web-enabled, Object-oriented, Componentization Functionally: front-office (i.e. sales management), supply chain (advanced planning and scheduling), data warehousing, specialized vertical industry solutions, etc. What is an ERP – Key Characteristics


Typical architectural components :Typical architectural components CRM Foundation Marketing Sales eCommerce Business Applications Interaction History Universal Work Q 1-to-1 Fulfillment Assignment Engine Escalations TCA Installed Base Tasks Notes Resources Calendar Territories Finance HR


Why implement an ERP System? :Why implement an ERP System? To support business goals Integrated, on-line, secure, self-service processes for business Eliminate costly mainframe/fragmented technologies Improved Integration of Systems and Processes Lower Costs Empower Employees Enable Partners, Customers and Suppliers


How should we implement ERP systems :How should we implement ERP systems Obtain the right mix of people, processes and technology!!


How should we implement ERP Systems? :How should we implement ERP Systems? People Project Structure Should be aligned to processes Process Implementation Process (outlined in detail) Adapt your processes to those of the ERP. Technology Hardware Software Integrated Systems


Process :Process 1. Definition and Analysis Hold discussions with various functional personnel to establish the actual number of systems operating at client site, what they are used for, why and how often Produce the Project Scoping Document outlining current situation, proposed solution and budgeted time Challenge : REQUISITE EXPERTISE - No two clients are the same


Process :Process 2. Design Prepare various functional reports - specifies current scenario and wish list Prepare Design document which specifies how the system is going to work Prepare test scripts to be followed on system testing Map out the interface paths to various modules Challenge : INFORMATION SHARING - Availability of staff


Process :Process 3. Build Configure system as per set up document specifications i.e. transfer conceptual model into reality Test system to verify accuracy (preliminary tests) Challenge : TECHNICAL ENVIRONMENT - System functionality


Process :Process 4. Transition Train users on their specific areas Assist in test data compilation and system testing by users Finalise the Live system and capture opening balances Challenge : USER RESISTANCE - Understanding and acceptance Data preparation


Process :Process 5. Production Official hand holding Effectiveness assessment Business and Technical Direction recommendations


Technology :Technology Technology is an enabler, not the driver (it is there to assist the organisation to achieve business goals) It is a means to an end, not the end


Conclusion :Conclusion ERP systems provide a mechanism for implementing systems where a high degree of integration between applications is required The Business Case or Value Proposition for implementation must be outlined To successfully implement - a proper mix of people, processes and technology should be maintained