SourabhJain_NITK_MBA_ERP_Implementation

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ERP Implementation in Firms - Steps and Hurdles

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ERP IMplementation:

ERP IMplementation By Sourabh , 10HM30

Slide 2:

Introduction to ERP systems and implementation ERP Implementation stages Guidelines for successful ERP implementation A case study : ERP implementation at OmanTel Conclusion

INTRODUCTION TO ERP SYSTEMS AND IMPLEMENTATION:

INTRODUCTION TO ERP SYSTEMS AND IMPLEMENTATION ERP provides the managers with a comprehensive overview of the complete business execution ERP thus influences their decisions in a productive way.

INTRODUCTION TO ERP SYSTEMS AND IMPLEMENTATION:

INTRODUCTION TO ERP SYSTEMS AND IMPLEMENTATION Implementing an ERP system in an organization is an extremely complex process. It may even take years to implement in a large organization. Eventually necessitate significant changes on staff and work processes.

INTRODUCTION TO ERP SYSTEMS AND IMPLEMENTATION:

INTRODUCTION TO ERP SYSTEMS AND IMPLEMENTATION Firms implement ERP mainly for following reasons : 1.Integrate Financial Information 2.Integrate Customer Order Information 3.Standardise and speed up manufacturing processes 4.Reduce inventory 5.Standardise HR information

ERP IMPLEMENTATION STAGES :

ERP IMPLEMENTATION STAGES Shortlist on the basis of observation Assessing the chosen packages Preparing for the venture Gap Analysis Business process reengineering Designing the System In-house Guidance Checking The real test Preparing the employees to use ERP Post Implementation

01.SHORTLISTING VENDOR:

01.SHORTLISTING VENDOR Involves choosing few applications suitable for the company from the whole many Selecting ERP software does not happen all on a sudden or as a result of an overnight's discussion Things to be considered include :

01.SHORTLISTING VENDOR:

01.SHORTLISTING VENDOR Flexible , scalable and reliable . Promptness , accuracy . Compatibility amongst the softwares Credibility Training provided

02.ASSESSING THE CHOSEN PACKAGES :

02.ASSESSING THE CHOSEN PACKAGES A team of experts will test and assess the package on 2 parameters : 1. Is it apt for the range of application in their field ? 2. What is the level of coordination that the software will help to achieve in working with other departments ?

03.PREPARING FOR THE VENTURE :

03.PREPARING FOR THE VENTURE This stage is aimed at defining the implementation of ERP in all measures. A team of officers will lay down the stipulations and criteria to be met and will report to the person of the highest hierarchy in the organization. Some guidelines are mentioned :

04.GAP ANALYSIS :

04.GAP ANALYSIS Gap analysis basically identifies analyses and as well suggests a sequence of steps to be followed after taking into account "What ought to be "and "what actually exists". It provides to overcome /bridge the gap .

05.BUSINESS PROCESS REENGINEERING :

05.BUSINESS PROCESS REENGINEERING BPR analyses and suggests the structural changes. It’s a crucial step . BPR is taken to conduct feasibility study and other restructuring exercises The company can either restructure the business process itself or customize the ERP system so that it suits the business process.

05.BUSINESS PROCESS REENGINEERING:

05.BUSINESS PROCESS REENGINEERING Implementing ERP Software to Suit Business Needs 1. A very costly affair for the firm . 2. Needs persons with greater working knowledge to design the systems. 3. The process will also require frequent updations . Restructuring the business process to be ERP Friendly 1. Requires lots of monetary outlay 2. Employees may also face problems 3. The customers may face problems

06.DESIGNING THE SYSTEM :

06.DESIGNING THE SYSTEM This step helps to decide and conclude the areas where restructuring have to be carried on . When modifications in ERP software is required, design work is critical. The programmer has to be ready to make design changes during construction.

06.DESIGNING THE SYSTEM:

06.DESIGNING THE SYSTEM Factors to consider while designing : 1) Recruit qualified consultants. 2) Document the existing processes 3) Diagram all the data flows in the system 4)Design the new system and compare with requirements . 5) Identify hardware and software.

07.IN-HOUSE GUIDANCE:

The employees in the company are trained to face crisis and make minor corrections as well The trainers employed in the company must be trained on ERP before taking it to the other set of employees. ERP training should be a continual process and not a one day affair. 07.IN-HOUSE GUIDANCE

07.IN-HOUSE GUIDANCE:

07.IN-HOUSE GUIDANCE Some common mistakes that take place in ERP training : 1)Too much emphasis on technical aspects 2)Does not address business issues 3)Less importance to training 4)Errors in administration 5)Lack of operational awareness

08.CHECKING :

08.CHECKING The system is subjected to the wildest tests possible so that it ensures proper usage and justifies the costs incurred. ERP Testing is a procedure that usually occurs before a company fully implements an ERP software package and the software goes live. It can help identify problem scenarios and training needs .

08.CHECKING:

08.CHECKING 1) Preparations of evaluation metrics 2) Evaluating the work periodically 3) Following contracts terms 4) Evaluating ERP performance 5) Accurate Quantification to facilitate correct measure

09.THE REAL TEST :

09.THE REAL TEST Once development is completed, the true unit testing occurs. The designer must do integrated testing on all possible scenarios that may come out of the business process (different variations of the same process) Once unit testing is approved, then the solution can be delivered to the client for the ‘ go-live ‘phase .

10.PREPARING THE EMPLOYEES TO USE ERP :

10.PREPARING THE EMPLOYEES TO USE ERP The employees in the organization will be taught to make use of the system in the day to day and regular basis so as to make sure that it becomes a part of the system in the organization . The firm must be prepared to look for alternatives to vendor supplied training .

11.POST IMPLEMENTATION :

11.POST IMPLEMENTATION The process of implementation will find meaning only when there is regular follow up and proper instruction flow thereafter and through the lifetime of ERP . This will include all efforts and steps taken to update and attain better benefits once the system is implemented. Also conduct a post – implementation audit

11.POST IMPLEMENTATION:

11.POST IMPLEMENTATION ERP Software Limitations 1. Earlier best practices lost . 2. Firm now constrained to ERP system 3. ERP costs may be too much to bear 4. Takes away decision making power from employees 5. toy box effect

GUIDELINES FOR SUCCESSFUL ERP IMPLEMENTATION :

GUIDELINES FOR SUCCESSFUL ERP IMPLEMENTATION 1.Implement changes in the firm for ERP properly 2.Understand that ERP is a tool , not a cure-all 3.ERP gap analysis and BPR should be performed properly 4.IT facilities in the organization should be capable 5.The process should be carried on by competent personnel 6.ERP should become a part of the daily routine

ERP IMPLEMENTATION AT OMANTEL:

ERP IMPLEMENTATION AT OMANTEL Omantel commissioned the ERP project for two major reasons. 1. To ensure that it was ready for the anticipated liberalisation of the Omani telecommunications industry by upgrading its capabilities . 2. A need to position itself to be able to meet national development requirements as identified by the United Nations .

ERP IMPLEMENTATION AT OMANTEL : Some topics:

ERP IMPLEMENTATION AT OMANTEL : Some topics 1. Stakeholder consultation : Omantel was committed to full consultation and transparency with not only its customers, but also with its competitors, and the regulator 2. Vendor selection : Selection of Oracle was conducted through an evaluation workshop organised by the vendor evaluation team

ERP IMPLEMENTATION AT OMANTEL : Some topics:

ERP IMPLEMENTATION AT OMANTEL : Some topics 3. Project management : The Omantel staff expressed concerns that the Oracle consultants seemed to have no time, or were unwilling, to share knowledge with the Omantel technical project staff. Overall, responsibility was assigned to an Omantel project manager, while technical leadership and consultancy was provided by Oracle

ERP IMPLEMENTATION AT OMANTEL : Some topics:

ERP IMPLEMENTATION AT OMANTEL : Some topics 4. Stakeholder management and communication : Omantel sought to communicate and engage with all stakeholders and to provide advice on the likely impact of the proposed implementation.

ERP IMPLEMENTATION AT OMANTEL : Some topics:

ERP IMPLEMENTATION AT OMANTEL : Some topics 5. Training : Overall, about 15 per cent of staff involved in the project did not receive any training at all. Those who did, did not practice and hence could not be productive . In addition, the talent pool available to Omantel was generally restricted.

ERP IMPLEMENTATION AT OMANTEL : Some topics:

ERP IMPLEMENTATION AT OMANTEL : Some topics 6. Risk management : There was an over-reliance on Oracle to resolve technical queries. At the same time, precise details of the new systems were not clearly articulated. Also no time appeared to have been allowed for any contingencies, late deliveries or significant failures in testing.

ERP IMPLEMENTATION AT OMANTEL : Some topics:

ERP IMPLEMENTATION AT OMANTEL : Some topics 7. System testing and software customization : Product and service offerings required changes either because 1) the requirement for change had been identified before testing began and had not been sufficiently addressed 2)changes had to take place following a problem identified during testing.

CONCLUSION:

CONCLUSION ERP implementation is a long process involving high costs The firm must be flexible enough to adapt to changes bought about by ERP Once ERP is implemented , the system’s operations must be carefully monitored There must be true knowledge and best practice transfer between the vendor and the firm This way ,a firm can get the most out of its ERP system .

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