Assignment : ERP Life Cycle Implementation

Name : Ashhar Ali Rizvi

Roll No : 42
 Case Study: Kisloskar ERP Implementation
About Company

Kirloskar Electric Company Ltd was established in 1946, about 70 years ago. It’s one of the
leading electric companies in the electrical field. Turnover of company is about Rs. 550
crores and employee strength is around 4500. Manufacturing of products are done in seven
different units. It has 28 sales offices in India and 4 sales offices overseas.
Major products that are produced by the company are AC and DC motors, generators,
transformers, UPS, invertors, CNC control equipment, wind energy equipment etc.

Legacy System
System used by the company from years is UNIX based. Most of the applications used in
legacy system are Home Developed by the company. These applications include Finance,
Material Management, Sales Functions, Production Planning, HR, Plant Maintenance,
Accounting etc. All the manufacturing units have Remote File Sharing based on UNIX LAN
system. They have Netware LAN at sales offices. Languages used for developing
manufacturing system are C, Oracle and Informix. For development of Sales application is
Foxpro

Legacy System Inadequacy

 Applications developed by company were not up to date to meet the requirements of

users
 There’s delay in the required information received by management
 Systems were not in sync due to which, data inconsistency was there in various
system
 Integration between the applications were not properly done
 Maintenance of software were difficult and not cost effective

Business Requirements
With the opening of the market and increased competition there was need to:

 Reduce cost

 Cut down cycle time

 Enhance customer satisfaction

 Improve efficiency
Implementation of Requirements
Company had two options to implement the Business Requirements:
1. Development on the current platform
2. Implement Branded ERP system
Option 1:
It will be time consuming to implement the entire requirement on the current platform
(around 3 years). Large number of skilled developers will required, also since the
implementation period is quite long the requirements may get changed in the course of
development. This may lead to even more time to complete the development. Technology
used in Legacy system is relatively old as compared to the market standards. There may be
change in developers in the course of development as time period is quite long and
developers may not willing to continue this long.
Option 2:
Branded ERP implementation will be one time investment and in later phase cost will be
incurred only for support activities. ERP comes with fully integrated applications and the
solution is multiproduct and multi-location applicable. It comes with best business practices.
At the company went ahead with option 2 and implemented SAP ERP for organization.

Implementation Phase

 Logistics department was planned to go through Business Process Reengineering

completely
 Services for BPR were outsourced to Price Waterhouse
 BPR completed in 6 months in 3 manufacturing units and in major sales offices
 About 150 men months of company employees and 50 men months of consultant
employees were required for implementation
 SAP consultant were involved in the final phase of BPR
 SAP implementation was outsourced to Siemen Information Systems
 For initial implementation 3 units, sales offices of 12 zones/region were selected

Live Phase
For pilot live of project, unit with maximum turnover was selected. As it has highest product
complexity and good mix of made to order and made to stock manufacturing. As it’s oldest
unit so most difficult to carry out the implementation.
Inference

 Company took the right decision of implementing ERP solution instead of going
ahead with the Legacy System. As it’s easy use and provide a lot of useful features
that can be used to improve business processes.
 As company done evaluation of options before starting with project thus it used
IBM’s Ascendant Methodology
 Company used Rollout Strategy as it implemented all modules on selected locations
 Plus pilot live was done on most complex unit of the company, if things go well at
this unit then mostly it will work fine at rest of places too.