Chapter 4

ERP Implementation and post

Implementation

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ERP Implementation
 ERP implementation is the firm’s ability to adapt,
configure, and integrate information flows and business
processes.
 Successful ERP implementation involves redesigning
business processes from an inflexible, mass-transaction
orientation to an agile, lean, and knowledge-based
process.

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System Implementation
 Focuses on installing or delivering the project’s major
deliverable – the information system that was built or
purchased
 Three general tactical implementation plans:
 Direct cutover
 Parallel
 Phased

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Direct Cutover

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Direct Cutover…

 Old system is shut down and new turned on

 May be appropriate when:
 Quick delivery critical
 Old system so poor it must be replaced ASAP
 System not mission critical
 Risks associated with direct cutover:
 Not always painless – like walking a tightrope without a
safety net.
 May result in major delays, frustrated users, lost revenues,
and missed deadlines
 Places more pressure and stress on project team
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Parallel

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Parallel…
 Old and new systems run concurrently
 May be appropriate when problems or the failure of the system can
have a major impact on the organization
 Provides a safety net or backup in case of problems
 Can increase confidence in the new system
 Takes longer and requires more re$ources than direct
 Places more pressure on the users

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Phased

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Phased…
 System is introduced in modules or in different parts of the
organization incrementally
 Allows for an organized and managed approach for
implementing system modules or a system/upgrades in
different departments or geographical locations
 Experience with early implementation can guide and make
later implementations go more smoothly
 Takes longer and may cost more than the direct cutover
approach
 Problems encountered during early phases can impact the
overall implementation schedule

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 ERP Training
 Training must be provided to everyone that will be using
the system, and should use real data and examples.
 If done correctly training will capture about 90 percent of
what users will see on a daily basis.
 ERP training personnel could include trainers who work
for the software vendor, third-party trainers that have
specific experience in ERP systems.

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Cont.
 Developing a variety of ways to train will better ensure the
effectiveness of training.
 Training needs to be endorsed by senior management early
to ensure adequate funding.

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 Stabilization

 The stabilization process begins when the ERP system

software is in production, initial training is complete, and
conversion of critical data is done.
 After the ERP system goes live, the organization will
need to shift to stabilization process—60 to 90 days.

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Cont.
 IT staff will be monitoring the infrastructure for response times
and ensure that back-ups are taken appropriately.
 Subject matter experts should be prepared to help many
users from their departments operate the system in the
correct way.

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 Issues Arising During Stabilization

 Customizations add to the complexity if not documented

and communicated well.
• Users make mistakes as they use the new process for the
first time.

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Cont.
 In a parallel implementation approach, the ERP system is
operated concurrently with the old legacy system, which is
labor-intensive, confusing, and frustrating.
 Reconciliation has to be done between the new ERP system
and the old legacy system to validate the inputs and outputs.

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 Postproduction Support

 Managing the daily system operations and ensuring

that the system is doing what it needs to do is really
the purpose of post-production support.
 If the post-production process is inadequate, then the
implementation may be considered a failure.

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Cont.
 Many of the risks associated with cutting over to the new
ERP can be reduced by appropriate pre–Go-live and
end-user training.
 Subject matter experts and core project team members
should be used to provide general support to answer
simple process and system questions.

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 Product Life Cycle Chart

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Post implementation Support

 Post implementation support is generally divided into

the following points:
 Training
 Go-Live Support
 Data Validation
 Data Correction
 New Features

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Cont.
 By clearly defining and communicating Go-live and the
ongoing support processes, overall expectations will be better
set to realize measurable business benefits and ROI from the
ERP project.

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 Knowledge Transfer
 There must be a well-defined process in place to
transfer knowledge and skill to new or existing staff or
team members during and after the implementation
process.
 Project monitoring and tracking, collaboration and
communication, subject matter expertise, and lesson-
learned repository should be documented.

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Cont.
 A knowledge management plan should be in place to monitor
the transition from one phase of the implementation to the
other, which enables a smooth transfer of knowledge.

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Cont.
 A knowledge management plan will:
 Ensure knowledge is retained.
 Reduce the cost of support due to lower number of support
calls.
 Facilitate faster learning.
 Better maximize the capabilities of the system.
 Cut time in troubleshooting problems.
 Ensure a correct use of the system.

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Cont.
 One centralized data repository can then be used to store
documents which will eliminate confusion, duplication, and
losing data.

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Success factors of ERP implementation
1. Scalability: An ERP system is easily scalable. That
means adding new functionality to the system as the
business needs change is easy. This could mean easy
management of new processes, departments, and more.

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Cont.
2. Improved reporting: Much of the inefficiency in operational
work systems from improper reporting. With an ERP system,
this possibility is eliminated as reporting follows an automated
template system, allowing various departments to access
information seamlessly.

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Cont.
3. Data quality: As compared with manual record-keeping or
other traditional approaches, an ERP system improves data
quality by improving the underlying processes. As a result, better
business decisions can be reached.

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Cont.
4. Lower cost of operations: An ERP system introduces fundamental
innovations in managing resources, which eliminates delays and thus
reduces cost of operations. For instance, use of mobility allows real-time
collection of data, which is indispensable to lowering costs.

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KEY SUCCESS FACTORS
1. Project Startup
2. Management Commitment
3. Project Scope
4. Project Team
5. Change Management, Communication and Training
6. Customizations/Modifications
7. Budget
8. Project Closure.
What are the factors affecting the post implementation process of ERP?

 Customization
 Post implementation training
 Top management support or influence
 Post implementation benchmarking
 Change management
 Maintenance of ERP
 Introduction of additional features at the post
implementation phase
 Success of activities at pre-implementation
stage