Study on ERP System Selection & Implementation

8/22/2019 Study on ERP System Selection & Implementation

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Practical -2

Aim: Study on ERP System Selection & Implementation

System Selection:

An ERP system selection methodology is a formal process for selecting an enterprise resourceplanning (ERP) system. Existing methodologies include:

SpecIT Independent Vendor Selection Management. Kuiper's funnel method. Dobrin's 3D decision support tool. Clarkson Potomac method.

A proper system selection methodology

To address the common mistakes that lead to a poor system selection it is important to apply keyprinciples to the process, some of which are listed hereunder:

Structured approach

The first step in selection of a new system is to adopt a structured approach to the process. Theset of practices are presented to all the stakeholders within the enterprise before the system

selection process begins. Everyone needs to understand the method of gathering requirements;

invitation to tender; how potential vendors will be selected; the format of demonstrations and theprocess for selecting the vendor. Thus, each stakeholder is aware that the decision will be made

on an objective and collective basis and this will always lead to a high level of co-operation

within the process.

Focused demonstrations

Demonstrations by potential vendors must be relevant to the business. However, it is important

to understand that there is considerable amount of preparation required by vendors to perform

demonstrations that are specific to a business. Therefore it is imperative that vendors are treated

equally in requests for demonstrations and it is incumbent on the company [and the objectiveconsultant assisting the company in the selection process] to identify sufficient demonstrations

that will allow a proper decision to be made but will also ensure that vendors do not opt out of

the selection process due to the extent of preparation required.
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Objective decision process

"Choosing which ERP to use is a complex decision that has significant economic consequences,thus it requires a multi-criterion approach." There are two key points to note when the major

decision makers are agreeing on selection criteria that will be used in evaluating potential

vendors. Firstly, the criteria and the scoring system must be agreed in advance prior to viewingany potential systems. The criteria must be wide-ranging and decided upon by as many objective

people as possible within and external to the enterprise. In no circumstance should people with

affiliations to one or more systems be allowed to advise in this regard.

Full involvement by all personnel

The decision on the system must be made by all stakeholders within the enterprise. "It requires

top management leadership and participation it involves virtually every department within the

company". Representatives of all users should:

Be involved in the project initiation phase where the decision making process is agreed;

Assist in the gathering of requirements; Attend the Vendor Demonstrations; Have a significant participation in the short-listing and final selection of a vendor.

System Implementation:

ERP covers the technique and concepts employed for the integrated management of business as

a whole,

ERP packages are integrated software packages that support the above ERP concepts.

ERP lifecycle is in which highlights the different stages in implementation of An ERP.

Different phases of ERP

Pre evaluation Screening Evaluation Package Project Planning GAP analysis Reengineering Team training Testing Post implementation


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Pre-Evaluation Screening Or Pre-Implementation

Pre-Evaluation Screening is the phase which starts when company decides to go for aERP System, the search for perfect solution starts.

It is very time consuming process to select few where all claims be the best, it is justsuperficial study of package.

Not all packages are same each has its own weakness and strength. While making the analysis it is good to investigate the origins of the different packages. Some packages can be good in some areas while in other sectors they may not.

Once few packages are screened detailed evaluation process starts. Decision for perfect package Number of ERP vendors Screening eliminates the packages that are not at all suitable for the companys business

processes.

Selection is done on best few package available. Package must be user friendly Regular up gradation should available.


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Package Evaluation

Package Evaluation process is one of the most imp phase of the ERP implementation ,because the package you select will decide failure or success of project.

There is little room for error in this as ERP packages are so expensive once purchasedcan not switch to another.

While making the analysis the imp point is nothing is perfect , imp here is whether it is aperfect fit or good fit.It is impossible to get a system which will perform exactly as the

company does business but aim is to get least no of differences

Project Planning Phase

This is the phase which plans that designs the implementation process. In this phase details of how to go about implementation, schedules and deadlines etc are

decided.

Roles and responsibilities are identified and assigned. This is phase which will decide when to begin, how to do it and when the project issupposed to be completed and what to do in contingencies. Their is a committee for this

and which is suppose to meet periodically throughout cycle to review process and chart

future course of action

Project Planning phase (Project schedule)

This is the phase that designs the implementation process. In this phase the details of how to go about the implementation are decided. Time schedules, deadlines, etc for the projects are arrived at & the project plan is

developed.

Roles are identified & responsibilities are assigned. The resources that will be used for implementation efforts are decided & the people who

are going to be in-charge of implementation are identified.

Team members are selected & task is allocated. This phase decides when to begin the project, how to do it & when is it suppose to be

completed.

Planning is done by the committee constituted by team leaders.Project Planning phase (Decision of the phase)

This phase plans what to do in case of contingencies, how to monitor the progress of theimplementation.This phase also decides what control measures should be installed &what corrective measures or actions should be taken when things get out of control.

Project Planning phase (Team leader)

The project planning is usually done by a committee constituted by the team leaders ofeach implementation group.


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The committee will be headed by the ERP in-charge (i.e. the CIO or COO). The committee will meet periodically to review the progress & chart the future course of

action.

GAP ANALYSIS

Gap analysis is a phase in the ERP implementation, where the organization tries to find outthe gaps between the companys existing business practices & those supported by the ERPpackage.

This is the process through which companies create a complete model of where they are now& where they want to head in the future.


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RE-ENGINEERING:

It is in this phase that the human factors are taken into account. Two different connotations 1st one is the controversial, involving the use of ERP to aid in downsizing efforts. There have been occasions where high level executives have invoked the reengineering

slogan & purchased an ERP package with the aim of reducing number of employees.

While every implementation is going to involve some change in job responsibilities, so itis the best to treat ERP as an investment as well as cost-cutting measure, rather than adownsizing tool.

Downsizing is a business practice that may have its place, but it should not be cloakedwithin the glossier slogan of reengineering.

The 2nd use of the word re-engineering in the ERP field refers to an ERP implementationmodel initially designed & used.


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TEAM TRAINING:

When the configuration is taking place the implementation team is being trained not howto use the system, but how to implement it.

This is the phase where the company trains its employees to implement & later run thesystem.

The ERP vendors & the hired consultants will leave after the implementation is over. Good in-house team For the company to be self sufficient in running the ERP system, it should have a good

in-house team that can handle the various situations.

Thus, it is very vital that the company recognizes the importance of this phase & selectsthose employees who have the right attitude- people who are willing to change, learn newthings & are not afraid of technology- & good functional knowledge.

TESTING:

This is the phase where you try to break the system. Here we reach a point where we are testing real case scenarios. The system is configured & now we must come up with extreme case scenarios- system

overloads, multiple users logging on at the same time with the same query, users entering

invalid data, hackers trying to access restricted areas & so on. The test case must be designed specifically to find the weak links in the system & these

bugs should be fixed before going live.

POST IMPLEMENTATION (MAINTENANCE MODE):

Important factors One important factor that should be kept in mind is that the post implementation

phase is very critical. Once the implementation is over the vendors & the hired consultants will go.

Necessary enhancements & upgrades There should be people within the company who have the technical processes to

make the necessary enhancements to the system as & when required.

The system must be upgraded as & when new versions or technologies areintroduced.

Training is needed Everyone who uses these systems needs to be trained on how they work, how they

relate to the business process & how a transaction ripples through the entire

company whenever they press a key. The training will never end; it is an ongoing process; new people will always be

coming in & new functionality will always be entering the organization.

Maximum value for these input Living with ERP system will be totally different from installing them. However, an organization can only get the maximum value of these inputs if it

successfully adopts & effectively uses the system.


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Documents

Study on ERP System Selection & Implementation