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Limit the number of packages Look for product literature of vendors, getting
help from external consultants & packages used by similar companies Package stronger in certain areas than others Peoplesoft: Stronger in HR & less in Mfg. Baan : Stronger in Mfg. and less in Finance Investigate origin of packages
Package selection
Do it right the first time None of them are perfect Objective : Not to find a perfect fit package
but to find a package that is flexible (S/w that could be customized to obtain a good fit Identify a system that best meets the business needs, matches business profile & that which identifies with the business practices Develop selection criteria for evaluation of packages
Selection criteria
process Degree of integration b/w various components of the ERP system Flexibility & Scalability Complexity User friendliness Quick implementation Ability to support multi-site planning & control Availability of regular upgrades Amount of customization required Local support infrastructure Total costs: license, training, implementation,
implementation team, roles identification, assigning responsibilities & organization resources Decide when to begin the project How to do it When to be completed Also, plan How to monitor the progress of implementation What to do in case of contingencies What control measures & corrective actions to be taken
Gap Analysis
Companies create a complete model to
identify functional gaps Even the best ERP package meets only 80% of the companys functional requirements Remaining 20%: issue for companys BPR Solutions Upgrade Identifying 3rd party to fill the gap Designing custom program Altering ERP source code
Re-engineering
ERP should engender business change, but
Unwritten rule of ERP: Synchronizing existing company practices with ERP package rather than changing the source code and customizing it to suite company Develop a prototype for thorough testing of the to be model ERP consultants configure & test the prototype to solve any logistical problems inherent in the BPR before the go-live implementation Configuration: What wont fit into the package Where the gaps in functionality occur
Configuration
implementation
Select right attitude people who are willing to
change, learn new things , good functional knowledge and are not afraid of technology
Testing
Testing real case scenarios Overloads Multiple users logging on to same time with same query Users entering invalid data Hackers Find the weak links in the system and bugs indentified should be fixed before going live
Going Live
Once Technical and Functional process is
used
change
Implementations fail Lack of end user
training
Post implementation
To reap full benefits of ERP system, system
should get enterprise-wide acceptance Should have enough trained employees to handle problems Upgradation (analyze cost benefits) Training never ends; it is an ongoing process( new people and new functionalities) LIVING WITH ERP SYSTEMS WILL BE DIFFERENT FROM INSTALLING THEM
Transition strategies
Big Bang strategy Phased strategy Parallel strategy Process line strategy Hybrid strategy
happens at once Reduce the integration cost of thorough & careful execution Implementation as Large scale information system More than automating existing business processes; it transforms the business processes Transformation happens on a specific date As it consumes too many resources, its seldom recommended Success careful preparation & planning prior
PAST
GO-LIVE DATE
FUTURE
Finance Manufacturing Human resources Materials Management Quality Management Plant Maintenance Marketing Sales & Distribution
Finance Manufacturing Human resources Materials Management Quality Management Plant Maintenance Marketing Sales & Distribution
PHASED IMPLEMENTATION
LEGACY SYSTEM
SYSTEM
Finance Manufacturing Human resources resources Materials Management Management Quality Management management Plant Maintenance Maintenance Marketing Sales & Distribution
PHASED IMPLEMENTATION
Implements one functional module at a time, in
sequential order Suits companies that do not share many common processes across departments Independent modules are installed in each unit & integration is done at later stage Each unit has its own instances of ERP & DB Reduces the risk of installation, customization & operation of ERP Interface programs are common in phased approach (Eg. Finance & Distribution modules)
PHASED IMPLEMENTATION
Advantages: One functional module at a time Comfortable stepping stone approach Less resources Disadvantages Large technical resources Cost & time is higher Variant: Mini phased approach
Parallel strategy
Past Go-Live date Finance Finance Manufacturing Manufacturing Human Resources Human Resources Materials Management Materials Management Sales & Distribution Sales & Distribution Plant Maintenance Plant Maintenance Legacy FUTURE Shutdown
Parallel implementation
Both legacy & new ERP system are kept active
simultaneously Remain in operation from 1 day to several months Good recovery options if something goes wrong & business processes not interrupted if new ERP systems malfunctions It provides exact comparisons in real world Consumes more resources than others
Parallel implementation
Exact duplication of legacy system to be
made in the new ERP system Confusion often arises as people do not interact with both systems in similar way ( go for detecting errors) Not appropriate where legacy system has an expiration limitation
lines ( for 2 products) Utilized by S&M sized companies which have less complex internal business processes 1st product line & all its resources go first in making the transition to new ERP. once, it is achieved successfully 2nd product line transition is done Usually smaller process lines with low risk & higher prob. of success is done first
implementation Complexity varies depending upon the situation Small single site ERP implementations have simpler hybrid strategies than those used by MNCs Flexible in adopting to the specific needs of the business situations Org. can specifically tune implementations for their needs Great deal of communication combined with strong leadership is required
Choosing a strategy
Technical resources Number of users Consultant availability ERP team structure Deadlines Reliability H/W resources
Work instructions, training material, plan of approach, templates, example deliverables, std./customized s/w components, parameter setting, h/w requirements, chart of accounts Lower implementation costs & much quicker implementation
ERP Attitude - A process - A set of tools To work successfully - people who know ERP & business practices well - good vendors - planning implementation well and executing perfectly - end-user training - Mature development process & development environment & organizational culture has to be conducive - Implementing in the process way rather in the tool
Approach to ERP
To develop a business model comprising the business process or activities & showing the interconnection & sequence of the business subsystems or processes that derive it
Business Strategy
Business Model
Business Process
Organizatio ns
MIS
Databas es
Money
Information
INPUT
WORKFLOW
OUTPUT
Benefits of ERP
Reduction of lead time On time shipment Reduction in cycle time Better customer satisfaction Improved supplier performance Increased flexibility Reduction in quality cost Improved resource utility Improved information accuracy &