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Chapter: Business Science - Enterprise Resource Planning - ERP Implementation

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Enterprise Resource Planning(ERP) Implementation life cycle

1 Pre-evaluation Screening 2 Package Evaluation 3 Project Planning Phase 4 Gap-Analysis 5 Reengineering 6 Configuration 7 Implementation Team Training 8 Testing 9 Going Live 10 End-user training 11 Post – implementation

ERP IMPLEMENTATION LIFE CYCLE:

 

1.     During the pre-evaluation phase, ERP vendors available in the market are screened based on business requirements. ERP packages that don’t suit the business requirements are eliminated.

 

2.     During the package evaluation phase, selected package is evaluated against requirements across departments.

 

3.     A detailed requirement analysis is done, involving different managers from across the departments. Requirement analysis helps list down all the functionalities required to ensure efficient processes across the organization.

 

4.     Based on the analysis of requirements and functionalities, a detailed project plan is laid out. This involves senior management team and ERP experts. Designs are finalized; key resources to be involved in the project are identified in various departments; special arrangement is also made to tackle contingencies.

 

5.     Once the planning is done, business process re-engineering takes place. Implementing ERP will impact the job responsibilities of lot of employees. So, new roles and responsibilities are to be assigned to employees. Processes are to be re-structured and integrated with ERP tools.

 

6.     Post implementation and integration, staff and managers are to be trained properly so that they get good practice. Consultants will help employees to get hands on experience of the ERP tools.

 

7.     At last, the tools that are implemented are tested rigorously. Issues arising during the testing phase are fixed and required changes are made.

 

Thus ERP Implementation process can be explained. ERP Implementation Lifecycle

l    ERP Implementation

 

l    ERP implementation lifecycle focus on the ERP project which is carried out to make ERP up and running.

 

l    ERP project is likely to go through different phases like any other project.

 

l    Most often these phases do not necessarily depend on one another in a sequence, i.e. one phase might start before previous phase has finished.

 

l    Also all phases that will be discussed may not be applicable in all cases.

 

l    The different phases of ERP implementation are:-

 

l     Pre-evaluation Screening

 

l     Package Evaluation

 

 

l                 Project Planning Phase

 

l                 Gap-Analysis

 

l                 Reengineering

 

l                 Configuration

 

ERP Implementation

 

l                 Implementation Team Training

 

l                 Testing

 

l                 Going Live

 

l                 End-user training

 

l                 Post – implementation

 

1 Pre-Evaluation Screening

 

When the company has decided to implement the ERP the search for the convenient and suitable ERP package begins.

 

Refers to the discussed previous lecture (“ERP Selection”) to understand the criteria used in selecting particular ERP package.

 

2 Package Evaluation

 

The objective of this phase is to find the package that is flexible enough to meet the company’s need or in other words, software that could be customized to obtain a ‘good fit’.

 

Once the packages to be evaluated are identified, the company needs to develop selection criteria that will permit the evaluation of all the available packages on the same scale

 

To choose the best system, the identification of the system that meets the business needs, and that matches the business profile.

 

Some important points to be kept in mind while evaluating ERP software include:

 

a)     Functional fit with the company’s business process.

 

b)    Degree of integration between the various components of the ERP system.

 

c)     Flexibility and scalability

 

d)    Complexity

 

e)     User friendliness

 

f)      Quick implementation

 

g)     It is better to have a selection committee that will do the evaluation process.

 

3 Project Planning Phase

 

 

a.     This is the phase that designs the implementation process. Time schedules, deadlines, etc. for the project are arrived at.

 

b.     The project plan is developed in this phase.

 

c.      In this phase the details of how to go about the implementation are decided. The project plan is developed, roles are identified and responsibilities are assigned.

 

d.     The organizational resources that will be used for the implementation are decided and the people who are supposed to head the implementation are identified.

 

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

 

f.       The phase will decide when to begin the project, how to do it and when the project is supposed to be completed.

 

g.     The phase will also plan the ‘What to do’ in case of contingencies; how to monitor the progress of the implementation;

 

h.     The phase will plan what control measures should be installed and what corrective actions should be taken when things get out of control.

 

i.       The project planning is usually done by a committee constituted by the team leaders of each implementation group headed by CIO.

 

4 Gap Analysis

 

This is the most crucial phase for the success of the ERP implementation.

 

Simply it is the process through which companies create a complete model of where they are now, and in which direction they want to head in the future.The trick is to design a model which both anticipates and covers any functional gaps.

 

Some companies decide to live without a particular function. Other solutions include:

 

a.         Upgrade

 

b.         Identify the third party product that might fill the gap

 

c.          Design a custom program

 

d.         Altering the ERP source code, (the most expensive alternative; usually reserved for mission-critical installation)

 

5 Reengineering

 

This phase involves human factors.

 

a.     In ERP implementation settings, reengineering has two connotations. The first connotation is the controversial one, involving the use of ERP to aid in downsizing efforts.

 

b.     In this case ERP is purchased with aim of reducing the number of employees.

 

c.      Every implementation will involve some change in job responsibilities as processes become more automated and efficient.

 

d.     However it is best to regard ERP as investment and cost-cutting measure rather than a downsizing tool.

 

 

e.      ERP should endanger business change but not endanger the jobs of thousands of employee.

 

f.       The  second  use  of  the  word  ‘reengineering’  in  the  ERP  field  focus  on  the

 

Business Process Reengineering (BPR)

 

g.     The BPR approach to an ERP implementation implies that there are two separate, but closely linked implementations on an ERP site.

 

6 Configuration

 

It is important for the success of ERP implementation that those configuring the system are able to explain what won’t fit into the package where the gaps in functionality occur.

 

ERP vendors are constantly make efforts to lower configuration costs. Strategies that are currently being done include automation and pre – configuration.

 

ERP Implementation

 

7 Implementation Team Training

 

Synchronously when the configuration is taking place, the implementation team is being trained.

 

This is the phase where the company trains its employees to implement and later, run the system.

 

For the company to be self-sufficient in running the ERP system, it should have a good in-house team that can handle the various solutions.

 

Thus the company must realise the importance of this phase and selects right employees with good attitude.

 

8 Testing

 

This is the point where you are testing real case scenarios.

 

The test cases must be designed to specifically to find the weak links in the system and these bugs should be fixed before going live.

 

Going Live

 

This is the phase where all technicalities are over, and the system is officially declared operational.

 

In this phase all data conversion must have been done, and databases are up and running; and the prototype is fully configured and tested.

 

 

 

9 Going Live

 

 

The implementation team must have tested and run the system successfully for some time. Once the system is ‘live’ the old system is removed and the new system is used for doing business.

 

10 End-User Training

 

This is the phase where the actual users of the system will be trained on how to use the system.The employees who are going to use the new system are identified and their skills are noted.Based on their skill levels are divided into groups.

 

Then each group is given training on the new system.

 

This training is very useful as the success of the ERP system is in the hands of end-users. The end-user training is much more important and much more difficult than implementation team training since people are always reluctant to change.

 

 

11  Post – Implementation

 

This is the very critical phase when the implementation phase is over.

 

There must be enough employees who are trained to handle the problem that might occurred when the system is running.

 

There must be technical people in the company who have the ability to enhance the system when required.

 

Living with ERP systems will be different from installing them.

 

Projects for implementing the ERP systems get a lot of resources and attention.

 

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

 

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