Implementing ERP systems
“The implementation of ERP systems has helped mid-sized corporations, significantly improve their business metrics by process optimisation, improving the entire supply chain process, integration across functionalities and increasing transparency across the organisation,” states a PwC report. It also says that the introduction of ERP in any organisation helps it to move up the value chain in terms of market credibility and to build the confidence of its stakeholders.
The report states: “Most of the mid-sized organisations were living with homegrown applications which are non-integrated and on disparate technology architectures. This has resulted in living with redundant technology, loss of support and non-availability of critical information at the right time, resulting in overall business loss. The key drivers of introducing an ERP solution into a mid-sized company are: introduction of industry standard processes which are already embedded in the application, adopting integration across business functions leading to transparency, access to real-time information, analytical reporting for business decisions and adopting state of the art technology. Another key reason for the choice of an ERP vis-à-vis a bespoke development, is the speed of implementation which results in achieving a quicker return on investment. Like any other project, ERP implementation goes through various interconnected phases. These phases may be sequential but on occasion overlap. Normally, every phase has entry criteria, which needs to be fulfilled before the commencement of the phase. A phase is deemed to have completed when pre-determined deliverables are achieved”.
www.management studyguide.com list the various phases of ERP implementation, for a typical ERP project:
1. Project establishment
- Project establishment will comprise of the following activities:
- Mobilisation
- Project teams formation
- Project plan detailing and fine tuning
For a successful implementation, several types of skills are required. To ensure that the requisite expertise is available to the project, different teams are formed, consisting of members from the organisation and vendor.
- Project board
- Competence centre team, mostly represented by IT personnel of the organisation
- Key-users team
- Consultants’ team
- Project Implementation Committee
Entry criteria
- Vendor Project Team on site
- Organisations implementation team tentatively identified
Deliverables
- Project Administration Plan
- Project standards document
- Project board formation
- Project Implementation Committee formation
- Competency Centre Team formation
- Key Users Team formation
- Delivery and Installation of vanilla ERP Application
2. Procedure development
In this phase, key users and a competence centre team map the existing functional processes with the functions available in the vanilla ERP application, in conjunction with the vendor team. The following activities will occur in an iterative manner:
- Process mapping
- Gap detection
- Work-around identification
- Organisational impact analysis
Deliverables
- Business model through flow chart
- Customisation Design Specification document for identified modifications
- Draft Procedure Manual
- Acceptance Test Plan and Data
3. Application Software customisation
This phase includes program development for all modules using the Customisation Design Specification Document, unit testing and system testing of all modules. The individual programs will be unit tested, based on test plans developed by the vendor. This phase may be carried out offshore.
Next, the developed and unit-tested application software will be system tested during this phase. The system testing will be based on the acceptance test plan and test data provided by the organisation. Thereafter it will be installed on the Designated Computed System.
Entry criteria
- Acceptance Test Plan and Test Data
- Customisation Design Specification Document for identified modifications
Deliverables
Customised unit and system-tested application software.
4. Acceptance testing
The focus of user acceptance testing is to exhibit that the system works. From the user’s point of view, acceptance testing is the final quality control procedure to determine whether the software product is performing as expected.
Entry criteria
Availability of customised unit and system-tested application.
Deliverables
- Tested Application Software
- Updated procedure manual
5. End-user training
All identified end users will be trained in the specific functions they are required to work. The training will be conducted by vendor.
Entry criteria
- Tested Application Software
- Updated procedure manual
Deliverables
- End users trained as per training plan
6. Conference room trial
This phase deals with the simulation of the actual business environment. The following activities will occur iteratively during this phase:
- Identification and entry of representative data
- Simulation of the business model
- Business Model enhancement
- Finalisation of procedure manual
As the team reviews the data model, the business model that is prepared in the Procedure Development stage may undergo some changes.
Entry Criteria
- Tested Application Software
- Updated procedure manual
Deliverables
- Final Procedure Manual
- Final Business Model
7. Data loading
This is the migration phase where data from existing manual/legacy operations is transferred to System’s database using interface programs or utilities available within the ERP package. The following activities will occur:
- Data conversion and loading
- Establishment of access rights and passwords
Entry Criteria
- Final Procedure Manual.
- Final Business Model
Deliverables
- Data Loading Completed
8. Live trial
Once the Final Business Model is ready and the database is loaded, the system is ready to go live. This phase will allow users to work on the application software with real time data.
Entry criteria
- Data Loading Completed
- Trained End Users
Deliverables
- Live trial completed
