Package Software White Paper Presentation - IDSc 8140 class ...


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Package Software White Paper Presentation - IDSc 8140 class ...

  1. 1. Package Software Implementation <ul><li>Presented by </li></ul><ul><ul><li>Carrie Brown </li></ul></ul><ul><ul><li>Tim Brown </li></ul></ul><ul><ul><li>Ben Metzler </li></ul></ul><ul><ul><li>Kihoon Park </li></ul></ul>
  2. 2. Presentation Overview <ul><li>Objective </li></ul><ul><ul><li>Complete course </li></ul></ul><ul><ul><li>Entertain you for 90 minutes </li></ul></ul><ul><ul><li>Teach you something about package implementation </li></ul></ul><ul><ul><ul><li>Introduction to a structured methodology </li></ul></ul></ul><ul><ul><ul><li>Introduction to the most complex packages - ERP </li></ul></ul></ul>
  3. 4. Presentation Outline <ul><li>Introduction to Package Software - 5 minutes </li></ul><ul><li>Project Analysis - 30 minutes </li></ul><ul><li>Project Design - 20 minutes </li></ul><ul><li>Break - 5 minutes </li></ul><ul><li>ERP Discussion - 20 minutes </li></ul><ul><li>Questions - 10 minutes </li></ul>
  4. 5. Package Software Types <ul><li>There are three main different types of software packages from an implementation viewpoint </li></ul><ul><ul><li>Complete solutions - packages which are implemented without change </li></ul></ul><ul><ul><li>Parameter-driven solutions - packages which require or enable parameters/options to be chosen to use different features </li></ul></ul><ul><ul><li>Skeleton Package - packages with extensive functionality where the core processes are provided together with screen/window, report and file creation software. ERP is the most advanced. </li></ul></ul>
  5. 6. Package Software Implementation Issues <ul><li>Implement the package vs. install the software. Avoid the “It’s just a package syndrome” </li></ul><ul><li>Package suppliers do not generally provide all the areas of support required to fully implement the packages which they sell </li></ul><ul><li>This places great importance on the structure and management of the implementation process </li></ul>
  6. 7. Package Software Implementation Factors <ul><li>Need a comprehensive and flexible methodology to handle differences in the: </li></ul><ul><ul><li>Size of project </li></ul></ul><ul><ul><li>Application </li></ul></ul><ul><ul><li>Industry </li></ul></ul><ul><ul><li>Platform </li></ul></ul>
  7. 8. Package Software Implementation Skills <ul><li>Must combine with individual knowledge of </li></ul><ul><ul><li>Specific uses </li></ul></ul><ul><ul><li>Specific industries </li></ul></ul><ul><ul><li>Specific software packages from different suppliers </li></ul></ul><ul><ul><li>Specific release numbers and specific hardware versions of the packages </li></ul></ul>
  8. 9. Package Software Implementation Considerations <ul><li>The amount of effort necessary to design and implement different systems will vary. </li></ul><ul><li>The fundamental approach should not differ because each implementation should consider: </li></ul><ul><ul><li>How the package will be used in the business </li></ul></ul><ul><ul><li>What training is required </li></ul></ul><ul><ul><li>Preparation of user procedures </li></ul></ul><ul><ul><li>Testing </li></ul></ul><ul><ul><li>All of the normal implementation steps </li></ul></ul>
  9. 10. Package Software Implementation Objectives <ul><li>The objectives in implementing information systems is always to produce what is regarded as a &quot;good&quot; system. </li></ul><ul><ul><li>Meets requirements, i.e., user needs and business needs </li></ul></ul><ul><ul><li>Developed in the shortest possible time </li></ul></ul><ul><ul><li>Developed with minimum cost </li></ul></ul><ul><ul><li>Easy to maintain </li></ul></ul><ul><ul><li>Reliable in operation/error free </li></ul></ul><ul><ul><li>Simple to use </li></ul></ul><ul><ul><li>Flexible </li></ul></ul>
  10. 11. Package Software Implementation Objectives (cont.) <ul><li>Most important one of all: A good system meets the organization's requirements by solving problems and adding value . </li></ul><ul><ul><li>Relates to the critical success factors </li></ul></ul><ul><ul><li>Part of the strategic mission of the business. </li></ul></ul><ul><li>The methodology should be business-driven in an attempt help ensure added value </li></ul>
  11. 12. Package vs. Custom Software Implementation <ul><li>Same overall stages as custom development </li></ul><ul><ul><li>Analysis </li></ul></ul><ul><ul><li>Design </li></ul></ul><ul><ul><li>Construction </li></ul></ul><ul><ul><li>Implementation </li></ul></ul><ul><li>But steps are different for first two stages </li></ul>
  12. 13. Analysis Stage <ul><li>Feasibility Study </li></ul><ul><li>System Abstract </li></ul><ul><li>Requirements Definition </li></ul><ul><li>Package Evaluation </li></ul>
  13. 14. Feasibility Study <ul><li>Determines the suitability of implementing a software package to resolve existing problems </li></ul><ul><li>Consists of: </li></ul><ul><ul><li>Creating project structure </li></ul></ul><ul><ul><li>Evaluation of the current system </li></ul></ul><ul><ul><li>Preparation of the system abstract </li></ul></ul><ul><ul><li>Evaluate options </li></ul></ul>Analysis Stage
  14. 15. Create Project Structure <ul><li>Establish the project management structure for the implementation </li></ul><ul><li>The project team can be managed in two ways: </li></ul><ul><ul><li>By a project steering committee consisting of members from all functional areas impacted </li></ul></ul><ul><ul><li>Or by someone in senior management </li></ul></ul>Analysis Stage - Feasibility Study and System Abstract
  15. 16. Steering Committee Members <ul><li>Senior management - delegating or performing a hands-on function; </li></ul><ul><li>Information systems personnel - database/data administration, applications development; </li></ul><ul><li>Key-end users - all major functional areas. Strong individuals with key understanding of the business </li></ul><ul><li>Technology personnel - with key understanding of the new technology and its impact on the organization. </li></ul>Analysis Stage - Feasibility Study and System Abstract -Create Project Structure
  16. 17. Project Team Creation <ul><li>Project management defines and creates the project team </li></ul><ul><li>Produce an organization chart depicting the reporting channels </li></ul><ul><li>Assign the tasks and deliverables of the project to specific personnel </li></ul>Analysis Stage - Feasibility Study and System Abstract -Create Project Structure
  17. 18. Prepare the Project Work Plan <ul><li>Present the work products in a task structure </li></ul><ul><li>Define the content and completeness requirements for each deliverable </li></ul><ul><li>Establish management representatives who will approve deliverables </li></ul>Analysis Stage - Feasibility Study and System Abstract -Create Project Structure
  18. 19. Identify Milestones for Major Deliverables <ul><li>Schedule tasks considering the following: </li></ul><ul><li>Deliverable constraints </li></ul><ul><li>Available resources </li></ul><ul><li>Project budget </li></ul><ul><li>Overall schedule </li></ul>Analysis Stage - Feasibility Study and System Abstract -Create Project Structure
  19. 20. Evaluate the Current System <ul><li>Estimate current system operating costs </li></ul><ul><li>Evaluate the quality of the information produced </li></ul><ul><li>Document any known problems </li></ul>Analysis Stage - Feasibility Study
  20. 21. System Abstract <ul><li>A high-level conceptual understanding of the system requirements </li></ul><ul><li>Based on CSFs </li></ul><ul><li>Used to direct interviews with company management </li></ul>Analysis Stage - Feasibility Study and System Abstract
  21. 22. Creating the System Abstract <ul><li>Define Critical Success Factors </li></ul><ul><li>Prepare Data Abstract </li></ul><ul><li>Prepare Process Abstract </li></ul><ul><li>Prepare Technology Abstract </li></ul>Analysis Stage - Feasibility Study and System Abstract
  22. 23. Critical Success Factors <ul><li>The few factors, generally four or five, critical to the success of the system or the business process </li></ul><ul><li>Determines key decisions and processes the proposed system must support </li></ul><ul><li>Generally produced through discussions with key senior executives within the company </li></ul>Analysis Stage - System Abstract
  23. 24. Alignment of Critical Success Factors Analysis Stage - System Abstract - Define CSFs Mission Goals, Objectives and Strategy Critical Success Factors Performance Measures
  24. 25. Prepare Data Abstract <ul><li>Results in a preliminary Entity Relationship Model (ERM) </li></ul><ul><li>Derived primarily from an understanding of the existing system </li></ul><ul><li>Confirmed through interviews with management concerning the proposed system </li></ul>Analysis Stage - System Abstract
  25. 27. Prepare Process Abstract <ul><li>Describes graphically the key processes of the required system </li></ul><ul><li>Explicitly shows the expected interfaces with other existing or future systems </li></ul>Analysis Stage - System Abstract
  26. 29. Prepare Technology Abstract <ul><li>Documents the desired equipment and systems software configuration for the new system </li></ul><ul><li>Based on the current environment supplemented with any new technologies </li></ul>Analysis Stage - System Abstract
  27. 31. Requirements Definition <ul><li>Determines method to be used to collect and document system requirements </li></ul><ul><li>Involves gathering a detailed knowledge of the relevant business processes </li></ul><ul><li>Prioritizes requirements for the proposed system (sets scope) </li></ul><ul><li>Maps requirements to CSFs </li></ul>Analysis Stage
  28. 32. Assess Alternatives <ul><li>Steps: </li></ul><ul><ul><li>Assess the availability of packages to meet the requirements. </li></ul></ul><ul><ul><li>Determine technology requirements </li></ul></ul><ul><ul><li>Review implementation alternatives </li></ul></ul><ul><ul><li>Identify costs and benefits </li></ul></ul>Analysis Stage - Requirements Definition
  29. 33. Assess Available Packages <ul><li>Review requirements and identify any that are unlikely to be satisfied by a software package </li></ul><ul><li>Consider how these unusual requirements can be accommodated </li></ul>Analysis Stage - Requirements Definition
  30. 34. Unusual Requirement Options <ul><li>Determine if advantageous to </li></ul><ul><ul><li>Restructure organization </li></ul></ul><ul><ul><li>Change processes </li></ul></ul><ul><ul><li>Write custom programs to interface with package </li></ul></ul><ul><ul><li>Remove requirement from list if non-essential </li></ul></ul><ul><ul><li>Make modifications to packaged software </li></ul></ul>Analysis Stage - Requirements Definition - Assess Alternatives
  31. 35. Re-examine Technology Requirements <ul><li>Ensure all technology components with which the new system must comply have been defined </li></ul><ul><li>Evaluate the impact and usage of new emerging technologies </li></ul>Analysis Stage - Requirements Definition - Assess Alternatives
  32. 36. Review Implementation Alternatives <ul><li>Install a standard as-supplied package </li></ul><ul><li>Implement a package as a core system supplemented with other programs </li></ul><ul><li>Develop a custom system </li></ul><ul><li>Maintain the existing system and add enhancements </li></ul><ul><li>Continue as is with the existing system </li></ul>Analysis Stage - Requirements Definition - Assess Alternatives
  33. 37. Identify Costs and Benefits <ul><li>Outline the costs and benefits of the chosen alternative </li></ul>Analysis Stage - Requirements Definition
  34. 38. Package Evaluation <ul><li>Identify potential package suppliers </li></ul><ul><li>Produce RFP </li></ul><ul><li>Assign weight requirements </li></ul><ul><li>Conduct evaluation </li></ul><ul><li>Assess suppliers </li></ul><ul><li>Conduct contractual review </li></ul>Analysis Stage
  35. 39. Identify Potential Suppliers <ul><li>Review various sources for candidates </li></ul><ul><ul><li>Personal contacts </li></ul></ul><ul><ul><li>Internal Information Center </li></ul></ul><ul><ul><li>Internet </li></ul></ul><ul><ul><li>Trade Magazines </li></ul></ul><ul><li>Develop a short list for detailed analysis </li></ul><ul><ul><li>No more than 5 </li></ul></ul><ul><ul><li>Review with management </li></ul></ul>Analysis Stage - Package Evaluation
  36. 40. Produce RFP <ul><li>To ensure that all relevant requirements are specified </li></ul><ul><li>To ensure that the evaluation process is conducted in an objective manner </li></ul><ul><li>To allow the sender to supply details </li></ul><ul><li>To form initial part of contract </li></ul>Analysis Stage - Package Evaluation
  37. 41. Assign Weight Requirements <ul><li>Assess weight of each detailed requirement </li></ul><ul><ul><li>e.g. Mandatory, Highly Desirable, Desirable </li></ul></ul><ul><li>Define appropriate scoring system </li></ul><ul><ul><li>e.g. 5 Exceeds, 4 Fully meets, 3 Partly meets, 1 Ineffective, 0 Does not have </li></ul></ul>Analysis Stage - Package Evaluation
  38. 42. Conduct Preliminary Evaluation <ul><li>Prioritize the short list to 1 or 2 </li></ul><ul><li>Use RFP responses ( or other data ) </li></ul><ul><li>Use weight assignments </li></ul>Analysis Stage - Package Evaluation
  39. 43. Conduct Detailed Evaluation <ul><ul><ul><li>Inspection of the package documentation and manuals </li></ul></ul></ul><ul><ul><ul><li>Attending supplier education courses </li></ul></ul></ul><ul><ul><ul><li>Demonstration of the package </li></ul></ul></ul><ul><ul><ul><li>Visits to existing installation sites (ideally operating on similar hardware) </li></ul></ul></ul><ul><ul><ul><li>Discussions with other users </li></ul></ul></ul><ul><ul><ul><li>Processing of test data provided </li></ul></ul></ul><ul><ul><ul><li>Installation and testing of the package </li></ul></ul></ul><ul><ul><ul><li>A pilot system processed using the packager </li></ul></ul></ul><ul><ul><ul><li>Any combination of the above </li></ul></ul></ul>Analysis Stage - Package Evaluation
  40. 44. Assess Suitability of Suppliers <ul><li>To ensure that the potential supplier has a stable business base and will continue to provide the appropriate level of service and upgrades. </li></ul><ul><ul><li>Review financial stability </li></ul></ul><ul><ul><li>Review support capabilities </li></ul></ul><ul><ul><li>Review the experiences of current users </li></ul></ul><ul><li>Use weighted ranking assessment technique </li></ul>Analysis Stage - Package Evaluation
  41. 45. Conduct Contractual Review <ul><li>Identify relevant issues </li></ul><ul><li>Some examples </li></ul><ul><ul><li>Price and payment for the package and upgrades </li></ul></ul><ul><ul><li>Warranty (delivery date vs. usage date) </li></ul></ul><ul><ul><li>Maintenance and support agreement & conditions </li></ul></ul><ul><ul><li>Initial and additional training; </li></ul></ul><ul><ul><li>Initial installation (by the supplier); </li></ul></ul><ul><ul><li>Number of Documentation and reproduction rights </li></ul></ul><ul><ul><li>Merger/takeover clauses </li></ul></ul>Analysis Stage - Package Evaluation
  42. 46. Design Stage <ul><li>Software Installation </li></ul><ul><li>Design and integration </li></ul>
  43. 47. Software Installation <ul><li>Confirm System Requirements </li></ul><ul><li>Install Package Software (finally) </li></ul><ul><li>Obtain familiarization with package </li></ul><ul><li>Establish Implementation Approach </li></ul>Design Stage
  44. 48. Confirm System Requirements <ul><li>To ensure that the scope of the project is adequately defined and documented </li></ul><ul><li>Three separate areas need to be agreed on and documented </li></ul><ul><ul><li>The system requirements </li></ul></ul><ul><ul><li>The package software capabilities and limitations </li></ul></ul><ul><ul><li>The resolution of the differences between the first two areas </li></ul></ul>Design Stage - Software Installation
  45. 49. Install Package Software <ul><li>To confirm that the selected software package will operate on the intended IT environments and that the package software is capable of functioning and performing as expected </li></ul>Design Stage - Software Installation
  46. 50. Obtain Familiarization with Package <ul><li>To ensure that the project team understands how the package works </li></ul><ul><ul><li>Establish business team contacts </li></ul></ul><ul><ul><li>Arrange for training </li></ul></ul><ul><ul><li>Establish request for change procedures </li></ul></ul>Design Stage - Software Installation
  47. 51. Establish Implementation Approach <ul><ul><li>Direct implementation (big bang) </li></ul></ul><ul><ul><li>Parallel operation of both the existing system and the proposed system </li></ul></ul><ul><ul><li>Staged implementation such as by location, store, department, division or product line </li></ul></ul><ul><ul><li>Modular or phased implementation of functional components </li></ul></ul><ul><ul><li>Implementation of the proposed system at a pilot location </li></ul></ul>Design Stage - Software Installation
  48. 52. Design & Integration <ul><li>Define software components to be implemented </li></ul><ul><li>Define package interface requirements </li></ul><ul><li>Define package parameters </li></ul><ul><li>Define controls and security requirements </li></ul>Design Stage
  49. 53. Define software components to be implemented <ul><li>Define report standards </li></ul><ul><li>Establish output report formats </li></ul><ul><li>Prepare report grouping </li></ul><ul><li>Define screen/window standards </li></ul><ul><li>Establish screen layouts </li></ul><ul><li>Relate new screen/window and report layouts to the business strategy </li></ul><ul><li>Establish input/output formats </li></ul><ul><li>Define processing jobs </li></ul><ul><li>Develop physical database design </li></ul><ul><li>Design job submissio9n system </li></ul><ul><li>Confirm workload volumes </li></ul><ul><li>Assess new hardware impact </li></ul><ul><li>Discuss and agree to the initial design </li></ul>Design Stage - Design and Integration
  50. 54. Define Package Interface Requirements <ul><li>Specify any interfaces, both inputs and outputs, between the existing systems and the package </li></ul><ul><li>Design each interface </li></ul><ul><li>Discuss and agree to design of each interface </li></ul>Design Stage - Design and Integration - Design and Integration
  51. 55. Define Package Parameters <ul><li>Set package parameters </li></ul><ul><li>Modify package-supplied command language </li></ul><ul><li>Maintain liaison with computer operations </li></ul><ul><ul><li>Implementation plans and schedules </li></ul></ul><ul><ul><li>Hardware, storage and peripheral device capacity needs </li></ul></ul><ul><ul><li>Access to files for data conversion </li></ul></ul>Design Stage - Design and Integration - Design and Integration
  52. 56. Define Controls and Security <ul><li>Identify risks of system failure </li></ul><ul><li>Document level of control and security needed </li></ul><ul><li>Develop access control matrix </li></ul><ul><li>Define security responsibilities </li></ul><ul><li>Specify the processing control software </li></ul><ul><li>Agree to security design </li></ul>Design Stage - Design and Integration - Design and Integration
  53. 57. Analysis and Design End <ul><li>Follow through with Construction and Implementation </li></ul>
  54. 58. What is ERP? <ul><li>Enterprise resource planning </li></ul><ul><li>An integrated, technology-driven approach to managing a company’s resources, whether it is cash, raw materials, or human capital </li></ul><ul><li>Automating both back office and front office </li></ul><ul><li>Operate on the client-server structure </li></ul><ul><li>Midranges and mainframes computers </li></ul><ul><li>Windows-based software </li></ul><ul><li>Grouped into various functional modules such as accounting/finance, manufacturing, human resources, etc </li></ul>
  55. 59. Major products - SAP <ul><li>S ystems, A pplications, and P roducts in data processing </li></ul><ul><li>The largest supplier of business application software </li></ul><ul><li>Global focus having multiple languages, as well as multiple currency functionality </li></ul><ul><li>Gaining it quick acceptance in countries all over the world </li></ul><ul><li>The R/3 System consists of application module that support all of a company’s business transactions. </li></ul><ul><li>Support for multiple databases (Oracle, Informix, Others), user interfaces and operating environments (UNIX, NT, MPE and other European proprietary) </li></ul>
  56. 60. Major products - PeopleSoft <ul><li>The second largest ERP vendor </li></ul><ul><li>Began in 1987 with a human resource management system </li></ul><ul><li>Revolutionized two disciplines -- human resources and client/server technology. </li></ul><ul><li>Dominant in client/server HR marketplace. </li></ul><ul><li>Provides enterprise solutions for finance, materials management, distribution, supply chain, manufacturing, and human resources </li></ul><ul><li>Flexible, easily adaptable and less integrated architecture facilitates incremental implementations </li></ul>
  57. 61. Major products - Oracle <ul><li>Dominant position in database area, which it can leverage into applications </li></ul><ul><li>Significant pool of IS talent in outside world familiar with Oracle technology </li></ul><ul><li>One of the earliest UNIX application players - has taken advantage of that momentum in the growing client/server marketplace </li></ul><ul><li>Oracle Applications comprise 45-plus software modules </li></ul>
  58. 62. Major products - Baan <ul><li>Building from strong European base based in the Netherlands </li></ul><ul><li>Component-based applications for front office, corporate office and back office automation </li></ul><ul><li>Developing ERP systems on UNIX systems since 1981 </li></ul><ul><li>One of the first vendors to provide true multi-level client/server support </li></ul>
  59. 63. Major products - J.D. Edwards <ul><li>Originally founded as a firm specializing in accounting software </li></ul><ul><li>Strong AS/400 financial applications position </li></ul><ul><li>Functionally strong financial applications </li></ul><ul><li>Global presence - strong multi-national position </li></ul><ul><li>Flexible, integrated software for distribution, finance, human resources, manufacturing and supply chain management </li></ul><ul><li>Operates in multiple computing environments and Java and HTML enabled </li></ul>
  60. 64. Costs of ERP systems <ul><li>Gartner group estimates that ERP customers should plan on spending 15% of the projects original implementation cost every year to keep their ERP systems up to date. </li></ul>
  61. 65. Recent Trends <ul><li>ERP vendors are developing strategies for “webifying” their architechtures and adding e-commerce applications </li></ul><ul><ul><li>In April Baan unveiled E-Enterprise suite, and Oracle Previewed Oracle Apllications and Front office, featuring a web interface and e-commerce support </li></ul></ul><ul><ul><li>SAP hopes to have a new e-commerce application ready in May </li></ul></ul>
  62. 66. Recent Trends <ul><li>Companies abandoning ERP projects and instead are repairing legacy systems to fix Y2K problems </li></ul><ul><li>Financial performance of vendors fails to meet expectations </li></ul><ul><ul><li>horror stories of ERP implementations </li></ul></ul><ul><ul><li>Rush for Y2K fix is over </li></ul></ul>
  63. 67. Financial troubles of ERP vendors <ul><li>In January 1999 SAP disclosed that its 4th quarter 1998 pretax profits were expected to drop about 15% from the fourth quarter of 1997. Profit growth for 1998 was only 15%--barely half of the increase predicted </li></ul><ul><li>In 3rd quarter 1998 Baan reported a loss of $32 million and issued new stock to an investment firm in return for a $75 million infusion. </li></ul>
  64. 69. Future <ul><li>Future is unclear for all ERP participants </li></ul><ul><li>Segment for large companies is getting closer to the market saturation point </li></ul><ul><li>Middle market companies may offer tremendous growth for ERP vendors in the next 25 years </li></ul>