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Resource Planning

Resource Planning

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Published by Harish Morwani
Introduction of ERP, Scope, benefits, pitfalls, success factors, implementation of ERP
Introduction of ERP, Scope, benefits, pitfalls, success factors, implementation of ERP

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Categories:Types, Research
Published by: Harish Morwani on Dec 01, 2009
Copyright:Attribution Non-commercial


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Resource Planning

What is ERP?
Enterprise Resource Planning

ERP is a solution, which facilitates company-wide integrated information systems, covering all functional areas performs core Corporate activities and increases customer service enhancing Corporate Image

The Current Scenario
Enterprise Resource Planning

Islands of Information Difficult to get timely & accurate information Heterogeneous Hardware & Software platforms & practices Poor connectivity between different organizational locations Sticking with obsolete technology Resist to change Lack of proven man-power to develop integrated software

Information Islands

Why ERP?
Enterprise Resource Planning

For Management – to know what is happening in the company One solution for better Management For cycle time reduction To achieve cost control & low working capital To marry latest technologies To shun the geographical gaps To satisfy the customers with high expectation To be Competitive & for survival

ERP - Definition
Enterprise Resource Planning

“Software solution that addresses the Enterprise needs, taking a process view of the overall organization to meet the goals, by tightly integrating all functions and under a common software platform”

ERP – Expectations
Enterprise Resource Planning

Integrating all the functions Integrating the systems running in all the locations Transparency of information using a single data source across the organization Software must be responsive Modular Flexible Easy to add functionalities Provide growth path

Scope of ERP
ERP scope has expanded dramatically and usually includes:  Manufacturing  Supply Chain Management  Financials  Projects  Human Resources  Customer Relationship Management  Data Warehouse Large organisations want to implement standard processes and systems across divisions and subsidiaries ERP offers attractive, integrated solutions The market for these solutions is huge. 

Advantages of ERP
Elimination of redundant data and procedural operations. Flexibility to allow for customization. Easier access to the reliable information company wide. Compulsive use of best practices because of software. Increased efficiency hence reduced costs. Adaptability to a changing business environment. Reduced cycle timings. Functional integration among various modules.

Disadvantages of ERP
It is very expensive and time taking to implement. Time consuming and costly maintenance. Availability of many options, so may lead to the confusion and the correct use of the system may not be done. The system is very complex.

implement ERP systems

Obtain the right mix of people, processes and technology!!

ERP Implementation
1. Definition and Analysis Hold discussions with various functional personnel to establish the actual number of systems operating at client site, what they are used for, why and how often Produce the Project Scoping Document outlining current situation, proposed solution and budgeted time Challenge : REQUISITE EXPERTISE - No two clients are the same

ERP Implementation
2. Design Prepare various functional reports specifies current scenario and wish list Prepare Design document which specifies how the system is going to work Prepare test scripts to be followed on system testing Map out the interface paths to various modules Challenge : INFORMATION SHARING Availability of staff

ERP Implementation
3. Build Configure system as per set up document specifications i.e. transfer conceptual model into reality Test system to verify accuracy (preliminary tests)

Challenge : TECHNICAL ENVIRONMENT - System functionality

ERP Implementation
4. Transition Train users on their specific areas Assist in test data compilation and system testing by users Finalise the Live system and captured opening balances Challenge : USER RESISTANCE Understanding and acceptance data preparation

ERP Implementation
5. Production Official hand holding Effectiveness assessment Business and Technical Direction recommendations

ERP Solutions using internal resources

Critical Success Factors
Tailor-made ERP solutions

 The firm & optimistic approach of the Management - on adapting the ERP product driven methodologies - on customization - on monetary commitments  The dedicated Team ?  Good Training  Strict adherence to the Project schedules  Right technical infra-structure  Change Management

Pitfalls & Points of concern
Tailor-made ERP solutions
           Costly comparing to custom-built options Lot of hidden costs Chances of cost & time overrun are high The Level of customization/Indianization Compulsion to pay for redundant modules/features Vigorous involvement of all during implementation Non-availability of special practices like Customer Complaint, Logistics Linking historical data – offline & painful The requirement of Change Management is a must Dependency on outsiders is high IT department – Poor grip on the Implemented systems

Custom-built ERP Solutions using external resources

The Critical Success Factors
Custom-Built ERP solutions

• Clear Vision & support of the Management • Capabilities of the software development vendor • Scope & Expectations finalization towards meeting the ERP concepts • Strict implementation schedules & periodical monitoring • The involvement of the IT & functional teams

Points of Concern
 Software development vendor selection  Requirement/scope finalization [high chances of retaining the islands as it is]  Less chances of Value addition  Not time tested  Chances of Prolonged project duration

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