ERP Implementation lifecycle

What is ERP?

• Enterprise resource planning (ERP) covers the techniques and the methods employed for the integrated management of businesses as a whole from the viewpoint of the efficient use of the management resources, to improve the efficiency of an enterprise (Newell, Huang, Galliers, & Pan, 2003; Umble, Haft, & Umble, 2003; Xu, Wang, Luo, & Shi, 2006).

• ERP ERP Solution are integrated software ERP Solution that support the above ERP concepts (Wei & Ma, 2013).

ERP Lifecycle

• ERP stages or phases are highlighted in the Life Cycle implementation (Chang, 2004).

Different phases of the ERP implementation Comprehensive Lifecycle

•Implementation

– Plan

– FIT/GAP

– Build

– Test Deploy

•Maintenance

– Design

– Build

– Test

– Deploy

•Upgrade

– Delta FIT/GAP

– Design

– Build

– Test

– Deploy

•Decommission

– Plan

– Convert

– Retire

High Level Life Cycle

•Pre-evaluation Screening•ERP Solution Evaluation•Project Planning phase•GAP analysis•Reengineering•Configuration•Implementation Team•Training•Testing•Going Live•End-User Training•Post Implementation

Post-Implementation Phase

Pre-selection Process

ERP Solution Evaluation

Project Planning

Gap Analysis Reengineering Configuration

Implementation Team Training

Testing End- user Training

Going Live

ERP implementation Life Cycle

Company Management ERP Vendors

Pre-Evaluation Vendor Selection

• Identify the best solution for organization • ERP vendor selection Process will initiate.• This process eliminates those ERP Solution that are not at all

suitable for the business process .• This limits the number of ERP Solution that are to be

evaluated by the committee.• This screening is done on the basis of the product literature of

the vendors, external consultants etc.• Once you select a few ERP Solution after the screening, you

can start the detailed evaluation process.

ERP Solution Evaluation

• An important phases of the ERP implementation ,the selected solution will decide the success or the failure of the project.

• Implementation of ERP system involve a huge investment ,so once a ERP Solution is purchased, it is not an easy task to switch to another one. So it is a ‘do-it-right-the-first-time’ proposition.

• The objective is to find a ERP Solution that is flexible enough to meet the company’s needs.

ERP Solution Evaluation Cont…

• Once the ERP Solutions to be evaluated are identified , the company needs to develop a selection criteria that will permit the evaluation of all the available ERP Solution on the same scale.

• While evaluating the following points must be kept in mind:- Should be user friendly.- Regular updates must be available.- Complexity.

ERP Solution Evaluation Cont…

• a selection committee for the evaluation of the ERP Solution must be formed .

• This committee should comprise of people from the various departments like the functional experts etc.

Project Planning

• In this phase the implementation process is designed.

• In this phase the details of how to go about the implementation are decided.

• Time schedules ,deadlines etc for the project are decided.

• Roles are identified and the responsibilities are assigned.

Project Planning Cont…

• The implementation team members are selected and the task allocation is done.

• This phase decides WHEN to begin the project, HOW to do it, and WHEN it should be completed.

• This phase is usually carried out by a committee constituted of the team leaders of each implementation group.

Gap Analysis

• This is the most crucial phase in the ERP implementation.

• This is the process through which the companies create a complete model of where they are now, and in which direction will they opt in the future.

• The model helps the company to anticipate and cover any functional gaps.

Gap Analysis Cont…

• It has been estimated that even a best ERP package, custom tailored to meet the company’s needs, meets only 80 % of the company’s functional requirements. The remaining 20 % of these requirements present a problematic issue for the company’s BPR.

Reengineering

• It is in this phase that human factors are taken into consideration.

• While every implementation is going to involve a significant change in number of employees and their job responsibilities, as the process becomes more automated and efficient, it is best to treat ERP as an investment as well as cost cutting measure rather than a downsizing tool.

Configuration

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

• Here in this phase a simulation a PROTOTYPE-that is a simulation of the actual business processes of the company will be used , so that the company can carry on with their work when the mapping process is taking place. The prototype allows for the thorough testing of the “to be” model in a controlled environment.

• Through this the consultants configure and test the prototype and attempt to solve any inherent problem in the BPR before going live.

Configuration Cont…

• This also helps to reveal the strength and the weakness of a company’s business process which enables those who are configuring the system to point out what fits into the ERP Solution and where the functional gaps occur.

Implementation Team Training

• Takes place along with the process of implementation.

• Company trains its employees to implement and later, run the system.

• Employee become self sufficient to implement the software after the vendors and consultant have left.

Testing

• In this phase ,we try to break the system.

• That is we try to find the weakest link so that it can be rectified before going live.

End-User Training

• In this phase the actual users of the system are identified and trained on HOW to use the system.

• This training is very important because the success of the ERP system lies in the hands of the End-users.

• This makes this phase very crucial.

Going Live

• The work is complete, data conversion is done, databases are up and running, the configuration is complete & testing is done.

• The system is officially proclaimed.

• Once the system is live the old system is removed and the new system is used for doing the business.

Going Live Cont…

• The post-ERP organisation will need a different set of roles and skills than those with less integrated kind of systems.

• However, an organization can only get the maximum value of these inputs if it successfully adopts and effectively uses the system.

Post -Implementation

• Once the implementation is over, the vendor and the hired consultants will go.

• To reap the fruit of the implementation it is very important that the system has wide acceptance.

• There should be enough employees who are trained to handle problems those crops up time to time.

• The system must be updated with the change in technology.

Chang, S.-I. (2004). ERP life cycle implementation, management and support: implications for practice and research. System Sciences, 2004. Proceedings of the 37th Annual Hawaii International Conference on. doi:10.1109/HICSS.2004.1265556 Newell, S., Huang, J. C., Galliers, R. D., & Pan, S. L. (2003). Implementing enterprise resource planning and knowledge management systems in tandem: fostering efficiency and innovation complementarity. Information and Organization, 13(1), 25–52. doi:http://dx.doi.org/10.1016/S1471-7727(02)00007-6 Umble, E. J., Haft, R. R., & Umble, M. M. (2003). Enterprise resource planning: Implementation procedures and critical success factors. European Journal of Operational Research, 146(2), 241–257. Retrieved from http://www.sciencedirect.com/science/article/pii/S0377221702005477 Wei, J., & Ma, Y.-S. (2013). Design of a feature-based order acceptance and scheduling module in an ERP system. Computers in Industry, (0). doi:http://dx.doi.org/10.1016/j.compind.2013.07.009 Xu, L., Wang, C., Luo, X., & Shi, Z. (2006). Integrating knowledge management and ERP in enterprise information systems. Systems Research and Behavioral Science, 23(2), 147–156. doi:10.1002/sres.750

References