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CHAPTER 5 ERP Implementation Lifecycle

CHAPTER 5 ERP Implementation Lifecycle

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Published by: saudgazali on Aug 31, 2009
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02/02/2013

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Chapter 5ERP Implementation Lifecycle
Like any other project, the ERP implementation project also has to go through different phases. There are no clear separating lines between these phases and in many cases, one phase will start before the previous one is completed.But the logical order is followed. For example, in some cases, the organization mighthave already identified a particular package; then the pre-selection screening and packageevaluation phases are not done.
The different phases of the ERP implementation are given below:
1)Pre-evaluation Screening2)Package Evaluation3)Project Planning Phase4)Gap Analysis5)Reengineering6)Configuration7)Implementation Team Training8)Testing9)Going Live10)End-user Training11)Post-implementationAlthough these phases may seem very linear and distinct from each other, in reality,throughout an actual implementation, the phases are in fact quite fluid. In many cases,companies go through many implementations-in different business units, differentmodules, or manufacturing location.So at any given time, more than one of the phases may be operational.Some companies opt for the one and only ‘Big Bang’, while other companies favour sequential rollouts-each company has different needs. But whether it is the ‘Big Bang’method or sequential rollout, the lifestyle phases are the same.
1. Pre-Evaluation Screening:
Once the company has decided to go for the ERP system, the search for the perfect package starts. But there are hundreds of the ERP vendors-of all sizes and shapes-allclaiming to have the solution that is ideal for the company. Analyzing all the packages before reaching a decision is not a viable solution. It is also a very time consuming process.So it is better to limit the number of packages that are valuated to less than five. It isalways better to do a thorough and detailed evaluation of a small number of packages,than doing a superficial analysis of dozens of packages.
By: M H Lakdawala
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Hence, the company should do a pre-evaluation screening to limit the number of  packages that are to be evaluated by the committee. The pre-evaluation process shouldeliminate those packages that are not at all suitable for the company's business processes.While making the analysis it would be a good idea to investigate the origins of thedifferent packages. Now, most packages cater to almost all business and service sectors.
2. Package evaluation:
The evaluation/selection process is one of the most important phases of the ERPimplementation, because the package that you select will decide the success or failure of the project.Since ERP systems involve huge investments, once a package is purchased, it is not aneasy task to switch to another one. So it is a -do it right the first time' proposition. Thereis little room for error.The most important factor that should be kept in mind when analyzing the different packages is that none of them are perfect. The idea that there is no perfect package needsto be understood by everyone in the decision-making team. The objective of the selection process is not to identify a package that covers each and every requirement (a perfect fit).The objective is to find a package that is flexible enough to meet the company's needs, or in other words software that could be customized to obtain a 'good fit'.Some important points to be kept in mind while evaluating ERP software include:Functional fit with the company's business processes.1)Degree of integration between the various components of the ERP system2)Flexibility‘and scalability3)Complexity4)User friendliness5)Quick implementation6)Ability to support multi-site planning and control7)Technology—client/server capabilities, database independence, security8)Availability of regular upgrades9)Amount of customization required10)Local support infrastructure11)Availability of reference sites12)Total costs, including cost of license, training, implementation, maintenance,customization and hardware requirements.It is always better to form a selection or evaluation committee that will do the evaluation process. This committee should comprise of people from the various departments (thefunctional experts), the top management (preferably the CIO or COO) and consultants(package experts). The selection committee should be entrusted with the task of choosinga package for the company.
By: M H Lakdawala
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Since all business functions are represented and the management is involved, the packagethat is selected will have company-wide acceptance. The package experts or theconsultants can act as mediators, or play the role of explaining the pros and cons of each package.
3. Project planning phase:
This is the phase that designs the implementation process. It is in this phase that thedetails of how to go about the implementation are decided. Time schedules, deadlines,etc. for the project are arrived at. The project plan is developed. Roles are identified andresponsibilities are assigned.The organizational resources that will be used for the implementation effort are decidedand the people who are supposed to head the implementation are identified. Theimplementation team members are selected and task allocation is done.This phase will decide when to begin the project, how to do it and when the project issupposed to be completed. This is the phase which will plan the 'what to do' in case of contingencies; how to monitor the progress of the implementation; what control measuresshould be installed and what corrective actions should be taken when things get outof control.The project planning is usually done by a committee constituted by the team leaders oeach implementation group. The committee will be headed by the ERP in charge (usuallythe CIO or COO). The committee will meet periodically (during the entireimplementation lifecycle) to review the progress and chart the future course of actions.
4. Gap analysis:
This is, arguably, the most crucial phase for the success of the ERP implementation.Put very simply, this 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.It has been estimated that even the best ERP package, custom tailored to a company'sneeds, meets only 80% of the company's functional requirements.The remaining 20% of these requirements present a problematic issue for the company'sBPR (business process reengineering). One of the most affordable, albeit painful,solutions entails altering the business to 'fit' the ERP package. Of course, a company cansimply agree to live without a particular function (the cheap but annoying solution).Other solutions include:• Pinning your hopes on an upgrade (low cost but risky)• Identifying a third-party product that might fill the gap (hopefully it also partnerswith the ERP packages, keeping interfacing to a minimum)• Designing a custom program• Altering the ERP source code, (the most expensive alternative; usually reserved for mission-critical installations)
By: M H Lakdawala
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