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Prof.

Chandan Singhavi
1. The organisation’s functional
requirements
2. Packaged software vs. developed software
debate
• Open source software
3. Identification of packages that can fit the needs of
the organisation

4. Assessment of fit between needs and attributes of


the ERP package

5. The organisation’s readiness for ERP


implementation
1. Functionality
2. Reliability/ stability
3. Cost
4. Ease of use
5. Ease of customisation
6. Ease of implementation
7. Vendor reputation
• History – customer references
• Available resources
• ERP product knowledge, industry knowledge,
business knowledge
1. Structured ERP implementation strategy
• Alignment of internal strategy with ERP vendor ‘s
implementation strategy
2. Internal Project Planning
• Committed project co-ordinators
• Team dynamics
• Communication lines
3. Business Process Engineering and Re-engineering
4. Change Management Plan
 Personnel skills requirements analysis
 skills development
 Organisational structure evaluation and optimisation
 The selection of a vendor that best meets the
needs and long-term direction of the company is a
critical first step in a successful implementation.

 The company may want to hire a specialized


consulting firm to assist in the selection process.

 The steps involved in selecting a vendor generally


are based on best fit of an ERP to business
functions and the overall ERP vendor’s product
performance in the market.

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1. Vendor research and information gathering
2. High-level vendor demonstrations and evaluation
3. Needs and requirements assessment
4. Development of request for bid or proposal
5. Release request for bid to vendors
6. Analysis and selection- Evaluation of bids,
Functional evaluation, Technical evaluation,
Vendor-detailed demonstrations, Contact
references, Develop a total cost of ownership
7. Vendor negotiation,
a) Contract review and change,
b) Pricing- software, maintenance, and consulting, support
8. Purchase system

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 First step is to identify a short list of vendors who will
help to shape business requirements.
 Identifying and researching all aspects of a vendor
package will assist companies in determining the total
cost of ownership.
 Including end-users will help with change
management and also help to gain trust for later in
the implementation.

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 Consider the following for vendor selection.
◦ Other businesses using the vendor
◦ The vendor’s financial position
◦ The vendor’s implementation philosophy and support
issues
◦ The hardware and software infrastructure used to
support the ERP
◦ The vendor’s direction and currency of software
◦ The vendor’s release and upgrade strategies
◦ The vendor’s user-base involvement in defining future
functional changes
◦ The vendor’s development and maintenance resources

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 SAP—Solutions are for all types of industries and for
every major market. Its products include mySAP
Business Suite, SAP NetWeaver, and solutions for small
and midsize companies (e.g., SAP Business One and
SAP All-in-One).
 Oracle/PeopleSoft — (Acquired PeopleSoft in 2004)
Provides solutions divided by industry category.
 Lawson —Provides industry tailored software
solutions.
 SSA Global—(Acquired Baan in 2004.) Claim to offer
solutions that accomplish specific goals in shorter time
frames.

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 Great Plains- Part of the Microsoft Business Solutions
group of products, its solutions can be tailored
according to business needs.
 Epicor- Focuses on enterprise software solutions for
mid-market companies.
 Infor Visual- Flexible, fully integrated, and easy-to-use
ERP suite that is widely deployed across many
industries from aerospace to biomedical, capital
equipment, precision tools etc.
 Plex Online- Plex Online provides a full suite of
enterprise resource planning, manufacturing execution
system, and supply chain management solutions

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 Identification and documentation of user and
system requirements can be done by documenting
current legacy system functionality or by using
business process re-engineering.
 Two major documents are often a result:
◦ Data and functional flow of departmental or business
processes.
◦ Table or description of functions in each department and
the level of importance of each function.
 Identifying vendor system functionality based on
documented processes will help to purchase a
system based on facts.

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 RFP
 Often known as Request for Proposals (RFP)
 Expensive and time-consuming process for both the
company and vendor, but it can yield significant
software savings when done right.
 RFB should always include the following:
◦ Type of ERP system the company wants with specific
functionality
◦ Specified hardware and software infrastructure
◦ Training requirements
◦ Any specific contract issues required by the company

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 Office staff will need to evaluate functionality.
 IT staff will evaluate the technology requirements.
 Contract staff will need to evaluate the contract
and pricing of the system.
 No vendor will meet all requirements so vendor
discussions and negotiations should focus on the
best fit for the business.
 Develop and analyze the total cost of ownership
(TCO).

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 Things every ERP contract should have:
◦ All deliverables must be clearly identified with delivery
dates associated.
◦ Ensure that you, the customer, have acceptance authority.
◦ Identify those responsible on both sides for contract
management and who has the authority to authorize
changes to the contract.

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 Selecting the right consulting partner is crucial for ERP project success.

 There can be different consulting partners for different phases of the project like;
 One for package selection
 One for doing package implementation
 A third one for doing all technical works from a low cost country

 Large global implementations these days are mostly broken between multiple
partners. When multiple partners are involved in an implementation, coordination
between different players become extremely important.
Selection Criteria for ERP consulting Partner

Process consulting
Industry Client Satisfaction
experience Experience

Price / Value for


Client References
Money

Can provide End to Reputation


End service

Global Presence
Quality of Project Mgmt

Methodology, Tools
 Some of the large organizations follow RFP (Request For Process) process for
selecting consulting partner for ERP implementation.

 RFP process is must for Public Sector Organizations.

 Sometime a RFI (Request For Information) is issued prior to RFP. Based on RFI
response a few vendors can be short listed among many.

 An RFP can contain details like


 High level Scope and Project Duration
 Overview Of Company’s business and operations
 Business benefits the company is expecting from the project
 Proposal submission details – when and how the offer to be submitted
 Payment schedule, Bonus, Penalty etc
In house implementation – Pros and Cons

Cons Pros

Better process knowledge


Better industry knowledge

Product Expertise No money goes outside

ERP Project Mgmt Skill


Lack of methods and tools
No implementation experience

High chances of failure

In house implementation may work in case of Rollout projects where implementation in


the first site had been done by consulting team and subsequent rollout by in-house team
Global ERP Consulting companies

Tier 1

IBM, Accenture

Tier 2

Tier 3
Project Phase  % of activity  % of activity from Type of activity from offshore
from onsite offshore

Project Preparation 100% 0%

Business Blueprint 90% 10%  Building Proof of concept / Demo


scenarios, Blueprint documentation
(Partial)

Realization 30% 70%  Configuration, Testing,


Developments

Final Preparation and Go Live 50% 50%  Data Migration, End user training
content preparation
Support 20% 80%  Resolving Issues, Running routine
utility jobs, System developments,
Managing change requests
Activities that commonly get off shored:
 Development

 Unit testing, Volume testing

 Training content preparation

Activities that can be off shored in limited extent:


 Configuration

 Data Migration

Activities that is difficult to offshore


 Business Blueprinting

 Integration testing

 User acceptance testing

 End user training

 Change management activities