ERP: Lessons from Experience V. Venkata Rao Indian institute of Management ‘This atte draws coachsons fom the expeience of fw onpmintont in implementing Enters Resource Planing (ERP) cytes. The specific aspects of ERP implementation examined sre: Pre-iplementation analysis, Vendor select, mansgement ofthe implantation: project, and cstomsation, The aricle 280 highligh few tends. in the ERP technology relevant to the poteatal E&P castomers: in mary regects, ER? implementation Is po diferent fori the Implementation of any softvare projet It is jst at an ERP system is package> ‘aed, very leg i tan, high in Ysoure rerenets, wide in seape and heey in its onpanctionl impact. Nat oo may BRP iplemaations ar aywhereeaseto ‘conpltion, endo he ew hat claim to have esched a completo, the nes that on be considered fully sozcesfl are nepigile. Mest of the files in this area we ibuabe toa lick f involvement ofthe uses inthe inplementatin What and Why of integration ‘User sem ta it for granted that information intation in en organisation isn nguesionable vrs in fel, and that tea grave sin nolo pa i fo negation ‘when such is tecnally pusible. However he dsb of itegratin is rt always obvious. In der to understand this pont, fire let us escuss the questien ‘hts intepration ‘Consider traniaton that involves entering oto your systema unonfimsed sles ‘rer, and get sour the contd sales ede, alongwith the quasi emit and expected dat of delivery. After giving details lke product mumber, order ‘umber, quant desired, the syseng should cock inventory details and should wl Uae he required giant save from sock Suppese the answer iia te ‘epative. Then the aye soul check the werk in grozess ets nd should tl the They date of te stk evablty. Thea the syste should ileract with th tng pat of the contra module and indicate whoter the idee pee lads 103 raft or las. Ifpeeed, the rice could be changed and the profit re-coaute ‘Once the orders confined the camespoting stock shou be reserved forthe or and the deals of the onder sold be recoded inthe pening orders il. Ris cst that in pefomsing the abowe proces, the system deals with dat fom various Alepartments of the organisation sich aa inventory, production, sd esting. ‘The above example shows tht an iterated information sysem offers th ellowing vanages: 1. The baie din noel not be depicted betweon difnet Laks or processes. tis enowghto cer a dtm in one place only once, ad oust it ony there.Venkata Rao/ ERP: Lessons fom Espirience 2. The data msintenancs and management canbe eens and hence it ean be ‘aly sharod between vary af appietions. 3, Because ofthe nonsedandaney of ts the problams of at inconssieney do no ‘1s import fo emphasise tht the above Eenefits ve 2 caresponding cst the ‘ont of planing eed marageet of the integration, especially ithe requremst of fr enatsaion docs nt demand such Intec. Integration fs mssnngless and ‘waste fit does no aes key busines objective. We propos to illastate his point by an example ‘Theor a analysed in revel of his clases the ease of x manufcting company ying offer a custo-bult product to the mark. The question ped by ‘he managemert of ts company was whether could manifrtre ae deliver te ‘rc ow cuseer within two weeks of its ordering. According he preliminary _Enljis ofthe marmgtnent the expected lead time eS week: The prieiant a eager astute tie oS ek 2 vecks, fasive integrated computerisation called fr. Ascoding «6 them, all ‘ncons rig fiom tbe tanemision of he cistomers order fom the eal shop 0 the-despatch planing of th produc shouldbe automated, plang te operation of “avons manafctirng roceses suck stb aan and fal pecking. Howes, Tinther analyse shows tht the especity of comvenonal manfaring sop, eve ‘without he raggeted intopaed computerseon, more than enough to prodsoe the tpt muber of prods each week, even the aco operas single hi “Therefore, nothing t= grin hy computes the order wansmsion or dsptch ‘lning, wll enlyfocrease the ens. A sill damper analysis shows that the ‘Shanes of te ene it of purchased components needed 10 asembe a product eed tote aval o complete he produ i ane; tecmees ht the ete Kt trailble when one are oly one oe of en. Therefore to ensure ta the ester ‘omnitmonts a sways mt itis Stes to improve the procatemeat manage ‘Sytem reer than vale tnsnission or despatch, The conchsion, hence, 1s 10 “strengthen the integra wid a sueysin, hamelf the component p ‘ther than inerating te woe eters. “Therefore, iti adisble to go trough an analyse of what steal ote succes ofthe crise bef decding what ist be integraodynd how much isto be inserted Goals to be accomplished by ERP Most ERP exerts do begin witha mison stamens, but the statements re ws thing more than ew moherood tren suchas "to teat te eustoe ke 3 ‘ing’ of "achieve market eaderhip ani to atain world class exeleace”. Sach ‘utc ole lite guide in dciing prions in the dsiga ofan information ‘pte, tga ot nt. In erder to sues, 2 design poet sould be precede by ‘lear cbjectives cm what Ge sen Is expeied to accompli. If the system i © ‘compli ow inventory cos ten the kindof computession wil be of ee Kn, heres if te cbjecive fe to accomplish comer sista, the kind of ‘computerisation witb another. Th mote quantiaive the objectives, the beter will, be the decison fn the disign of a system In a sucess ERP implementation 2Venkata Koo ERP: Lesone rom Eperience Inown :0 the author, the concemed organisation fas spelt out the performince measures fer the ergassaton In tems of thee diferent ies ease-il ine, fd overdespuch, i has cven set goals for thee mewures. Afler the Inptemensstion, i was possible overly whether he implementation was succes by comparing the above targets withthe actual performance ofthe syst. is Ieartenng 1 note thatthe eegnisation as achieved a reeton of 359% nes ‘nvettory holding within few monte of implementing he system, Vendor Selection ‘The vendor salacton process, although sald tobe very cial 10 the sucess ofa [ERP pyvjtt, is oftcn dons in x yet hurry, without png atention to relevant eject Te comp las se apr a separ fice forte implementation tam, the {nes of te swing commitas meme sal One of he pre inpeenon ‘Caner snowed y tec xcatv toe ere onaninon Inthe ret beter pees manages on om he ctone-rgazatien, te eed em {fe vende and ied oe eon, shart same om 55th ty xn tcc mimo, snake dese wits my ty. A prt sever ong wih aque bs of cen salle a he oe fr onawing te oclug la inl einng offre! to he tam, eres a ges We ceuteed (0 fmol ta spt among te difint members. Awards nee {teil rognee ele peice 10 cate apt of acute In recuting mors i he ea, as enpssed ta he Wer chaps Should be Inowlalgtle out the dele proses so proces Hse peste ftom For emaple fom be sale fect, he tepesetve ‘Sind ee no neces be bess oer, But shoul te oe wo Best Tings abe eles poste. The rane challenging faced by an inplerectation eam is to convince ever) in he cgaaon on te importance nd relevance of the changes bag bolt shout by the aw aytem, Her, he op mango yppodis vary ese. Customization “The amount of cumonittion lnvolved in ERP implementions is alvays netstat, deel oe tats implementing» package, ts ot posible ‘racy know hit asede tobe cisomized. In roost crpietion the package Was rund to be inadoqute jn the following areas: MODVAT, ‘ales ‘commision reultcmets,subeonractng ts deduction at once, LC, bank guarantee, and tier, tarred procedures. “Farther, in be implementation of every ERP system the coding see is lee to a slgnifcat eens whether the codes ae Telted to avery Hea, char of Sccounts, suppliers or casomes. “The vendor sncoxnce with get aplomb that 0 mater wht bei package should ot be tampered wi Ts condition may appear highly restrictive, bat has alt of| ‘ert a, boauce any change paca version ofa package will ecesstate ‘reponling changes ll tre versons and upgrades. Ye, omarhad before, bap between the inetions offered by a package ad the reglements ofthe user a fnoviable 41 Venkata Rael ERD: Leon fram Eaperionce ‘Sch gaps are o be resolved by changing the busines practice isl if possible by inet mems. The two common indzect meas aze to make wie Of cerain existing Features of the package orto meet the requirement trove an insependsi prom, which is not apart of the ERP. The foaner solution i ealled a work. ‘round, whereas the later called a solton fom outside, ofline olton. The folklore of ERP implementation abounds With examples of both these approaches In a specific TRP implementation, the package was net capable of allocating tachines atonal to wack orders, The user generated &report-forat ich ‘woul Ti all the machines tat were availble doing a ven pein, for certain amount of spocfed time. Wile deciding te allocation ofan sca job the tr ‘would generate the above rept and find the mschie to which the order could be alloted. This sa example ofa workaround. ln may ERP inplenentations, payroll isnt an itera pr ofthe package, Many ‘raaizatons hve well exablished packages for his tak, and prefer to use then ‘ten after the ERP inplemanation. A few ions of data fo pao dtaese won beespored othe ERP. This example of solution outside he system. ‘An implementation team would usually be dismayed io discover thst the numberof ‘aps that they have to epe wih is oo neers, mah higher hn what they Pad ‘xpated in he bapiming noe sumo ale, one fam encore ty 1 seventy gs. ts in resclving sch gx tT of people sil are called or ‘on the pa othe pojnt anager ‘Trends in Technology “The ew versions ofthe ERP packages ta to incorporate fens that mak? the inplemention peoces_siple and efficient, enable tho pockaye to run « univenaly evagble aeworking iniaeuctue and make Ht say foe tied pary rode inerie with he package, ‘A caieal and tine consuming part ofthe implementation pase ig 10 precisely ‘scribe te bss process wit reat amount of deta Sach description enabler ‘he implenentors to ussite tag business proces requirement othe fneionliy of the pcage ado dicover gaps, if ab. Some of he recent poclags offer ool Ya enable bane proces ob described inthe form of graph models witha cerain prseibed notion, usually fellowing # stand object oriented ‘metnodology. Once such a model i developed the user shoul be abl to ok i 1 the pois so tate proceses deseribel in the model det wansate 1 th functions ofthe peckags. Ben into operation a the package it should be sufiioe fee user to tal with only te model, in which ease the uses View of the packag> il be very elose to what he ex se dels wit in his oe er everyday lie, Furr, Uwheoever tbe way of operating tbe busines cigs, the comspanding change Should be easily refed inthe package by simply revising te mode. However, it reality, te proces dtnitios developed by te ser cannot cas integrate withthe, pacage, ses as doseribed abe.V, Venkata Roe BRP: Lessons ram Experience “The implenemation proces is splifed by using objet oriented methods in the [ERP packages Some ERP packages have already anounced fecres such as cjeet, {epost snd dtibted ebjert fails following anda such as CORBA tod ‘efit of rick object ovine fs tht customisation becomes ‘ary simple and neracion betwee objets lostedin ferent places fesse Interne bs permeated every nok and come of the corpse werd today. An ERP system canoot operate without st spfopiate network Infasrucre. Mesto he Binet ofa ERP projot gs consumed ia lnsaling_ the desired networks, The overt tend is to make ERP packager operat tough Wob, in which case the [rvesents inthe networkin, epeially inthe cae of mli-octononpnisations, ‘would be reiuced. Purr, na Web enabled ERP, auserinerats with ERP through 2 Web bromer. Beste of i, the ERP cas bef the internet oo, whieh fre constandy geting peat. ‘Another hosting model whic i catching the ney ofthe aes isthe use of loud Dlatfrn Here ier the lore space o th computing inate oi package Foc ae hosted by 2 thin pry, thereby eleving the user of ins satura inveatnits and softwere ownership cist. Koowa popula clouiconputing the ‘shove meting is tacive fre users becase they an now coy pay for what they tse and ean sale op ter ERP with ease, However to major isu with he coo? i the question of ect: whore the gnarste hat the inp and opts of ERP, how sore, procesed, sad tatsmitet trough unknown locations would nat be ‘spied upon by unsruplous competes? Many new ERP packages ae equipped with gateways treagh which they ean lnterfce wi eter communion tools and yacags suc s Binal eleeonie dats Inverchang, an roup ware, Conclusion Tinplementing-an ERP package is as much a change maragemeat tasss ib 2 techie! execie .Ofen he top management tends to underestimate the eflots ft the expertise node fom hese fo making sch a peojct a sucess. the ‘ute, essential forthe wats i sess wheter they ped gration in thir {noroaton syste all and fs, in whic subsystems. After deciding o jmp on the ERP bendwagen, heuer soul pay’ aa ave ein selecting the ven, in ‘modeling the business proces and in tetomising the package. ERP packages ae ‘constantly being eskansed tortie he tine oftheir impleretation ant improve their iterecton with oder sytem: However suck tcenial enkancements alone ‘cannot ysl fal benefits unl heated organizational changes se managed, ‘wicy. ERP packages end to foc tel way nto an cxganistion with the promise ‘at their usage does aot rogers say proeamming sis. This claim bas a catch ‘socked with the wer ay not need och progaming ski in operating an [ERP system but to lplemen the wer segs exceptionally high sls In ‘modeling analysis and menagemert. The efor saved in ogramming, ify, would ‘Demoe han oft set by the effort of implementation. Te overall efor required fr ‘ap ERP inplemenmtion depends on , none many factors, tne degre of integration sought bythe user The git level of integration lis somewhere trbetween Wo tenes, having vse of eonpltely dependent subsystems at ene extreme, and hhving wily negra inftemtion sytem athe ter. As to wha is the opin 6Y.Venkota Rao’ ERP: Lestons rom Experience level of integration that suits given enterprise, we do not have a preise answer a the moment ‘Acknowledgement ‘The exarples given i thie ate ae based on the authors itraton with several ERP uses, who would tke te remain anonymous. To all of them, the autor ‘expresses is hank. The tecinical infomation given is based on the web pages of sever] ERP vendors