Advancing Enterprise Risk Management Practices- A Strategic Framework by Naga...
ERP Unit iii
1. ERP IMPLEMENTATION
The concept of implementation is ordinarily related to installation of hardware and software. In
the world of ERP systems, “implementation” is often used as a term to describe a well-defined
project spanning from the choice of the systems through the configuration and the training until
going live, where the system is becoming operative.
5
Performance
1 4
3
2
1.Before ERP Implementation
2. During implementation
3.After implementation during training
4.After Training and going live completely.
Different Perspectives of ERP implementation:
1. Organizational perspective
2. Business perspective
3. Technological perspective
IIMPLEMENTATION LIFE CYCLE
The process of ERP implementation is referred to as the ERP implementation life cycle.
There are two basic characteristics common to all ERP implementation projects are-objectives
and phases.
Objectives of ERP Implementation
Enterprise resource planning implementations are so prevalent not merely because of the
hype created in the market t to adopt the best practices to the operations.
2. 1. To achieve the potential growth rate
2. Increase the return on investment
3. Availability of the relevant information on regular basis
4. Scalability of the business operation
Phases of ERP implementation
The concept of implementation is ordinarily related to installation of hardware and
software.
The different phases of the ERP implementation are given below:
1. Pre-evaluation Screening
2. Package Evaluation
3. Project Planning Phase
4. Gap Analysis
5. Reengineering
6. Configuration.
7. Implementation Team Training
8. Testing
9. Going Live
10. End-user Training
11. Post-implementation
Pre-Selection Screening
Package Evaluation
Project planning
Grap Analysis Reengineering Configuraton
Implementation Team Training Testing End-user Training
Going Live
Post-implementation
phase
Company
Management
ERP Vendors
3. Pre-Evaluation Screening
Once the company has decided to go in for the ERP system, the search for the
perfect package starts but there are hundreds of ERP-vendors – of all sizes and shapes – all
claiming to have the solution that is ideal for you.
Package Evaluation
The evaluation/selection process is one of the most important phases of the ERP
implementation because the package that you select will decide the success or failure of the
project.
Some important points to be kept in mind while evaluating ERP software includes
I. Functional fit with the companys’s business processes.
II. Degree of integration betweenthe various components of the ERP system.
III. Flexibility and scalability
IV. Complexity
V. User friendliness
VI. Quick implementation
VII. Ability to support multi-site planning and control
VIII. Technology – client/server capabilities, database independence, security
IX. Availability of regular upgrades
X. Amount of customization required
XI. Local support infrastructure
XII. Availability of reference sites
XIII. Total costs, including cost of license, training, implementation, maintenance,
customization and hardware requirements.
Project planning phase
This is the phase that designs the implementation process. It is in this phase that
the details of how to go about the implementation are d3ecided. Time schedules, deadlines, etc.
For the project are arrived at. The project plan is developed. Roles are identified and
responsibilities are assigned.
4. Gap Analysis
Gap analysis is the step of negotiation between the company requirements and the
functions a package possesses. In order for persons with differing viewpoints involved in a
project to function as a team, And to push ahead smoothly, it is effective to invite outside
consultants who can act as a neutral person to resolve conflicts and can push the project ahead,
while giving direction on the whole.
Reengineering
It is in this phase that the human factors are taken into account. In Requirement
implementation settings, reengineering has two different connotations.
Configuration
This is the main functional area of the Requirement implementation. There is a bit of
mystique around the configuration process and for good reason The Holy grail or unwritten rule
of Requirement implementation’s, Synchronizing existing company practices with the
Requirement package rather than changing the source code and customizing it to suit the
company.
Testing
This is the phase where you try to break the system. You have reached a point where you are
testing real case scenarios.
Going Live
This is it. Lights on, switches thrown, gloves off. On the technical side, the work is almost
complete data conversion is done, databases are up and running; and on the functional side, the
prototype is fully configured and tested and ready to go operational.
End-user Training
This is the phase where the actual users of the system will be given training on how to use the
system. This phase starts much before the system goes live.
Company
Requirem
ent
Gap
analysis
ERP
Package
Analysis
5. Post-Implementation(Maintenance Mode)
One important factor that should be kept in mind is the post-implementation phase is very
critical.
Once the implementation is over, the vendors and the hired consultants will go.
ERP IMPLEMENTATION METHODOLOGIES
An ERP Implementation can be divided into four phases
Phase 1) Understanding the problem
This is the first phase and the goal of this phase is to establish the foundation that permits the
software package to be implemented in the best possible manner.
Phase 2) Defining Solutions
This is the most critical phase of the project because it is during its development that all
concepts associated with the operation of the software package will be defined.
Phase 3) Getting Down to Work
In phase three the objective is to do the work as per the project plan
• Load the initial data
• Develop test and place the customization into operation’
• Develop and test the interfaces and place them into operation
• Document the new procedures associated with the system
• Test the new work environment, and
• Train the end-users.
Phase 4) Going Live
To arrive at the fourth phase the moment at which the system will start to be used – is
synonymous with being close to success.
ERP Implementation Approaches
The different approaches in ERP implementations are as follows
ERP Implementation Approaches
Big Bang Implementation
Parallel implementation
Process line implementation
Phased implementation
Pilot implementation
Hybrid Transition strategy
6. Big Bang Implementation
In the “Big Bang approach, the organization decides to implement all relevant modules at the
same time. This approach will help the organization to reap the full benefits of the ERP system,
because all the required modules to reflect the business processes of an organization are included
in this approach.
Step 1) In the first step, virtually all relevant processes and artifacts are chosen (or developed)
and implemented in the software.
Step2) In the second step, all modules are tested individually and for their interfaces with orther
modules, and
Step3) in the final step, all the modules are implemented.
Big bang approach produces a time gap when no system is working. Thus this approach is
meaningful when
• The system is not replacing any other system
• The old system is judged absolutely worthless
• The new system is either very small or simple and
• The design of the new system is drastically different from that of the old system
and comparisons between systems would be meaningless.
Advantages of Big Bang Approach
I. Less time consumed for implementing ERP.
II. There is no need for temporary interfaces and limited need to maintain and revise legacy
software.
III. Less cost incurred to implement ERP.
IV. Inadequate need to maintain the legacy system
7. V. Full ERP functionality available at the start
VI. Implementation happens on a single date and everyone knows the date
VII. Employees only need to be trained on the new system, not for the changeover period.
Disadvantages of BIG Bang Approach
I. Greater chances of system failure
II. Significant amount of resources required
III. Fewer resources available per module
IV. Inability of system to function properly till complete implementation
V. Less possibility to go back to the legacy system
VI. Full end- to-end system testing is tough to carry our prior to implementation.
Phased Implementation
In phased ERP implementation, the package is implemented in phases and sequentially.
Either a single module is implemented at all sites, or a single module is implemented further in
multiple phases at all sites. Sometimes a group of modules is implemented site-wise. Mostly,
large firms choose to phase in implementation, module by module, or by site.
Advantages of Phased implementation Approach
I. Low risk involved during implementation
II. Systems to be periodically checked for success rate
III. Less resource requirement when compared with the big bang approach
IV. Availability of legacy system until the complete implementation of ERP systems,
V. More knowledge gained during the implementation process.
Disadvantages of phased Implementation Approach
I. Higher coordination required among people of different departments during the
implementation process this coordination is important since uncoordinated personnel
increase the risk to an ERP project.
II. Longer duration to install an ERP system
III. Higher costs involved in the implementation process as the project takes longer to
implement
IV. Higher risks due to the personnel turnover as the project is stretched over a longer
duration.
V. Greater need to maintain the legacy system till the entire ERP system is operational.
Parallel implementation
The parallel approach keeps both the legacy system and the new ERP system active
simultaneously for a length of time. The amount of time the systems are both in operation ranges
from one day to several months. Portions of the same functional business areas such as finance,
8. manufacturing, marketing etc., are operation at the same time for both the legacy and ERP
systems. The parallel approach can be thought of as another dimension to an ERP
implementation strategy.
Past Go live Legacy Future
DAte Shutdown
Finance
Finance
Manufacturing
Manufacturing
Human Resources
Human Resources
Materials Management
Materials Management
Quality Management
Quality management
Plant Maintenance
Plant Maintenance
Marketing
Legacy System New ERP system
9. Marketing
Sales and Distribution
Sales and Distribution
Advantages of Parallel Implementation
I. It is the least risky implementation
II. Pace of change is much slower than big bang but faster than phased approach
III. In case of any unforeseen failure with the new system the old system still continues
IV. It allows overlap and fall-back controls
V. Does not need very meticulous planning in terms of fall back options
Disadvantages of Parallel implementation
I. In terms of pure financial terms, this is the most expensive solutions
II. Employee has to enter data into both the system
III. Employee may continue to use the old system thus making the new system least effective
IV. Users tend to compare the old and new and take an unnecessarily negative stance against
the unfamiliar.
V. Users tend to compare the old and new and take an unnecessarily negative stance against
the unfamiliar
VI. Users have psychological issues letting go off the old systems.
Pilot implementation
This approach is also called the “quick slice” or “slice approach because it involves
implementing the ERP system in a small manageable area of the company.
Advantages of Pilot Implementation
10. I. Low complexity/low risk
II. Learning curves are fast and the roi is seen immediately in some cases
III. Quick wins approach gives a higher rate of success
IV. Shorter introduction step
V. Faster implementation; refinement happens as one implement
VI. The period for review and refinement is shorter
VII. Momentum is easier to maintain since results and successes can be seen quickly and build
confidence in individuals.
Disadvantages of pilot implementation
I. Wrong pilot may be chosen
II. Momentum is difficult to maintain if pilot is not successful
III. Too many pilots increase complexity
IV. Requires intense focus from participants
V. Requires buy-in from the earliest point of implementation lack of buy-in could led to the
implementation failing to be accepted once completed. This holds implications for the
project’s long –term sustainability.
Process line Transition Strategy
The process line strategy is conceptually similar to the main big bang; however, it breaks
the implementation strategy to manage parallel business process flow or product lines.
Hybrid Transition Strategy
The hybrid strategy is a combination of the process line, phasing and parallel transition
strategies. Hybrid strategies are seldom predicated precisely at the beginning of an ERP
implementation. They tend to evolve into the needed configuration as ERP team members learn
and analyze information.
Useful Guidelines for ERP Implementation
I. Understand your corporate needs and culture
II. Complete business process changes
11. III. Communicate across the organization
IV. Provide strong leadership
V. Ensure an efficient and capable project manager
VI. Choose a balanced team
VII. Select a good implementation methodology
VIII. Train everyone
IX. Commitment to adapt and change
ROI of ERP implementation
ROI is simply the sum of benefits of an investment divided by sum of the costs, expressed in
percentage terms. ROI is not silver bullet to analyze all it decisions and not all it benefits can be
quantified. Benefits from an ERP project vary by company, industry, solution and vendor.
Benefits Calculation
I. Inventory reduction
II. Improved process efficiency
III. Improved vendor relations
IV. Waste reduction
Costs Calculation
I. Software license
II. Implementation costs
III. Hardware costs
IV. Internal training
V. Change management
VI. Internal conversion
ERP implementation – Hidden Cost
ERP implementation – hidden cost
Training
Integration and TestingData AnalysisBrain drain(employee
customization
Data conversionconsultantsContinuing maintenance
12. I. Training
II. Customization
III. Integration and testing
IV. Data conversion
V. Data analysis
VI. ERP consultants
VII. Brain drain(Employee turnover)
VIII. Continuing maintenance
ERP PACKAGE EVALUATION AND SELECTION
Evaluating the ERP packages available in the marketplace and selection one is the most
critical decision. This is the decision that can make or break an organization. If the choice is not
right then the organization will pay dearly for it. ERP packages have different architecture,
concepts and sets of functionality and they are designed to address a variety of user
requirements.
There are various reasons that make the ERP software selection process complex like
13. 1. Lack of clarity about the customers requirements
2. Complexity in the business processes
3. Increased number of ERP vendors
4. Lack of better planning resistance to change
5. Project cost
6. Integration, upgradeability adaptability and applicability of software.
Methods in ERP Selection
1. The decision is made by top management with the inclusion of external consultants
2. There is a centralized type of selection process in place, characterized by a strong focus
on the it and organizational department with only little participation of other internal
departments and no employment of consultants
3. The decision is made taking into considerations the suggestions given by several
departments of the organization whether they are going to be a user of the ERP system or
not.
4. Using a combination of all the three steps given above as and when there is a need.
Selection committee
IT is always better to form a selecting or evaluation committee that will do the evaluation
process. This committee should comprise of people from the various departments(functional
experts), top management(preferably CIO or COO), consultant(package experts) and end-users.
Selection process
1. Assemble project team
• Strong executive sponsor
• Strong project team leader
• Empowered project team members
2. Define the business vision
3. Define the business requirements
Build or buy
14. Integrated versus best-of-breed
Initial vendor screening
• Vendor viability’
• Functionality
• Scalability
• Technology
4. Requirements and selection
5. Develop scripted demonstration scenarios
Scenario-based demonstrations
6. Finalize selection decision
• Fit to documented requirements, weighed based on the prioritization scheme
• Compilation of participant feedback from demonstrations
• Gap analysis to assess the extent to which software customization may be
necessary
• Cost analysis for the software and related services
• Customer referenceability
7. Transition to implementation.
Handing the vendors
Once a decision is made to go in for an ERP package, the marketing executives of the different
vendors will swamp. Each will have colorful and excellently produced brochures and
presentations, claiming that their product is the best one.
Role of Technology
The existing technology will pay a very important role in the ERP selection process.
Each organization will have its own technological environment how the business is being done,
what kind of hardware and software are in use, what is the database management system that is
used for storing the operational and historical data, how is the data processing done and so on.
15. Selection Criteria
1. The package should have multi-language and multi-currency support
2. The package should be international and should have installations in specified
countries(basically in countries where the company have offices). The vendor should
also have a local presence in those countries.
3. The package should have at least ‘x’ number of installations out of which at least ‘y’
should be in business sector
4. The cost of the package with all the necessary modules should be less than ‘x’ rupees
5. The package should have facility to do an incremental module addition
6. The vendor should provide implementation and post implementation support
7. The vendor should give a commitment on training the company employees on the
package
8. The package should have the capability of interfacing with other systems that the
company is dealing with banks, suppliers, customers, etc.
9. The package must be customizable and the customization process should e easy.
10. The vendor’s policy and practices regarding updates, versions, etc. should be acceptable.
Mistakes in ERP selection Criteria
Common Mistake Outcome
They limit their search to the most widely
known vendors
As a result they may overlook software that
is more suitable for their needs
They do not formally define their
requirements for the software
Companies that arbitrarily choose ERP
systems risk disgruntling members of the
project team and fostering a climate of
conflict throughout the project.
They demonstrate software before they
define their requirements
Companies that make are more likely to be
influenced by showy demos
They over-specify their requirements Referred to as the “candy store” syndrome- if
ever one in a company asks for every feature
they want in a new ERP systems, the cost,
length and complexity of the project increase.
They become too involved in software Spending too much time studying
16. analysis requirements, causes ERP selection to lose
momentum overextending an ERP project for
any reason particularly at the outset of the
project – is risky the longer the project takes,
the more likely the employees and
implementation team members are to lose
their enthusiasm for the effort.
They treat ERP selection as a matter of
purchasing technology rather than as a major
business decision
Companies that fail to see the strategic
importance of selecting the appropriate ERP
system risk choosing the most inappropriate
systems.
FRAMEWORK FOR EVALUATING ERP
The evaluation of the contribution of Enterprise Resource Planning (ERP) systems to the
company value creating process has always been a difficult task. Since these systems aim at
supporting the management of the company s a whole, their implementation often leads to
radical organizational changes.
Traditional Approach
Business Process
RE-engineering(BRP)
ERP acquisition
Simplified Approach
Time
Analysis and design Implementation Start-up
17. Traditional approach: BRP as a prerequisite of ERP implementation:
Re-=engineering the business processes implies relevant
organizational impacts; since it often involves changes in the way people work in the distribution
of decision-making power, in the strategic importance of business functions.
Simplified approach: ERP Implementation without BRP:
This alternative approach requires, in the first place, that the company
adapts its processes according to the ERP system requirements. As a consequence, the time
requested for the implementation of the system can be shortened, while possible re-engineering
of critical business processes could be postponed.
Problem Analysis
The precursor to the implementation of ERP projects is the change initiative taken by the
top management with the attributes, such as integration, flexibility, robustness, best practices and
longevity, associated with WEP software being universally desirable, the initial decision of top
management to go for the ERP project is never adequately debated. The evaluation really
ventures on the selection of ERP software from among the many products available in the market
with their varied claims of capabilities and their associated price tags, all of which entail
differential times and costs of implementation and imply varying magnitudes of change. The
evaluation methodologies relying on financial cost-benefit analysis utterly fail to apply, as most
of the factors dealing with cost as well as benefits defy attempts at quantification.
Evaluation Criteria
The need to review the evaluation of it projetsis relatively recent. Fitzgerald observesthe
limitation of the conventional evaluation methodology and proposes a multidimensional
approach for evaluating information systems projects. The eight steps of this approach are
1. Identification of costs
2. The contribution to business strategy
3. Analysis of benefits
4. Second-order effects
5. Flexibility
6. Implement ability
7. Risk , and
8. Testing the business idea
18. Shankarnarayanan recommends the following criteria for evaluating ERP software
1. Functional fit with the company’s business process
2. Degree of integration between the various components of the ERP system
3. Flexibility and scalability
4. Complexity; user friendliness
5. Quick implementation; shortened ROI period
6. Ability to support multi-site planning and control
7. Technology; client/server capabilities, database independence security
8. Availability of regular upgrade
9. Amount of customization required
10. Local support infrastructure
11. Availability of reference sites
12. Total costs, including cost licence, training, implementation, maintenance, customization
and hardware requirements.
While the first set deals with generic information system (IS) projects and needs
development to evolve specific criteria for ERP projects, the second set, although specific to
the latter, appears to exclude some of the important requirements such as strategy
consideration and comprehensive vendor credentials. From the viewpoint of evaluation, the
criteria need to be defined precisely for their exclusive content and should comprehensively
map all the desired characteristics of ERP projects.
The following 10 criteria are proposed on these considerations:
1. Strategy-fit
2. Technology
3. Change management
4. Risk
5. implement ability
6. business functionality
19. 7. vendor credentials
8. flexibility
9. cost
10. Benefits
Framework for Evaluation
1. Creation of organizational infrastructure
2. Constitution of the repertoire of ERP products
3. Preparation phase
4. Context setting phase
5. Evaluation and selection phase
6. Approval of the selection
7. Mid-course Evaluation
TRAINING AND EDUCATION
All users of the ERP system should be trained properly in using the system to tits
fullest. Different groups of people in the company will have different training needs. Managers
need more focus on the decision-making and analysis features of the system while the clerical
staff need more focus on how to perform their jobs. But all the users must be trained in the ERP
basics, overview of the system and its working how an action b an employee triggers a host of
events throughout the organization, how automation will help, what processes are changed and
so on.
Educate everyone so that they understand what is going to be achieved with the new
system. Additional education should include total quality management and change management
strategies. Also he training sessions should be used to gain acceptance for the ERP system by
dispelling eh myths about ERP.
Inadequate training has been one of the significant reasons of many ERP systems failure.
In ERP implementation projects, despite millions of dollars and hundreds of deployment hours,
many projects fail because of the lack of adequate training.
The education and training of all project team members involved with the ERP
implementation is required education begins at the top of the organizational hierarchy.
20. Education and training are two different things:
1. Education answers the question, why?
2. Training answers the question, how?
One needs to perform both education and training. However the needs are different
for each. The methods, the topics, the settings, the people involved, and the amount of time will
be different for each. Training involves learning, using, and practicing how to operate the
system.
Training will be heavily weighted to the employees who enter and process transactions on a
daily analysis. Education will be heavily weighted to supervisors and managers who review
system performance, perform analysis, and hold decision-making positions.
Budgeting for education and training is a requirement that is often overloaded, education
and training require the company to use, or expend, resources. These resources include cash
outlays, employee time, requirement, and facilities. Time, equipment and facilitates are often
viewed as fixed costs or resources that are already available and thus do not need to be included
m a budget.
Budgets are usually prepared for a specific time period, and if the project runs over
multiple time periods, the budget is broken up into pieces that fit neatly into the predetermined
windows. This often distorts the total cost picture and is often done purposely.
What is boils down to is that the education and training portion of the implementation
needs to be budgeted, to that resources can be allocated and the education and training can take
place when they are required.
They are any numbers of ways to determine the educational and training needs of a
company for an ERP implementation. However formal analysis and planning for this aspect of
the implementation are no common. What usually happens is that some cursory planning is done
at the system evaluation and selection stage and much of it is left up to the ERP vendor.
One method of evaluating and analyzing the learning needs of the organization that he/she
finds quite promising and worthwhile is learning requirements planning. Learning requirements
planning is a comprehensive and effective method for determining the education needs of the
organization and then filling those needs.
21. DATA MIGRATION
A key value proposition of ERP systems is the efficiency to be gained from the
integrated processes they support. These integrated processes are dependent on accurate
and well maintained data. Any ERP implementation will involve the migration of data
from one or more legacy systems. Depending on the scale and complexity of the
implementation this can range from keying in small amounts of data to electronically
migrating large volumes of data. Most implementation will involve the latter and a
significant effort in preparing and clearing the data for the migration.
1. Identifying the data to be migrated
2. Determining the timing of data migration
3. Generating the data templates
4. Freezing the tools for data migration
5. Deciding on migration related setups
6. Deciding on data archiving
Data Migration process
Data migration is the process of moving required volume of data from existing
systems to new systems. Existing systems can be anything from custom-built IT infrastructures
to spreadsheets and standalone databases.
1. Reduce risk
2. Lower operational expenses
3. Improve data quality
Perspectives of data migration are as blow:
1.From a user perspective, the data migration solutions should make sure that a strategy is put in
place in achieves maximum flexibility find quality. This entails taking a number of measures
and actions, including
Iteration: Data is iteratively identified and cleansed. The aim should be to give the
users one or more iterative opportunities to identify corrupt data and then rectify it
22. either using the existing application functionality or automatically cleanse the data
within the data migration functionality.
Weeding: Data weeding within the data migration mechanism allows for better
identifying candidates and non-candidates to migration.
Inspection: Users should be able to inspect data that has been archive, which is
particularly important where users no longer have access to their source application
and data following migration.
From a Development Perspective
• Each new application to which data is to be migrated has its own data
migration strategy and roadmap document while using a unique consistent
and generic template document that can be referenced by all projects.
• A generic data migration mechanism that can be used across the majority of
application migrations exists. This approach has the benefits of re-usability
and allows the development of generic modules for data migration for
different types of ‘source’ and ‘target’ platforms.
Data migration strategy is proven and undertake following process for effective migration
1. Identifying the data to be migrated.
2. Data migration planning, where one develops migration strategy and approach define
scope schedule resource plan & technical requirements.
3. Determine the timeline/s milestone of data migration depending on the projects.
4. Generating the data templates
5. Conduct a mock migration to ensure feasibility and compatibility of given project
6. Freezing the tools for migration
7. Piloting a set of migration to coordinate with business users, verifying and controlling
Data
8. Go live and conduct a full scale migration into production environment
9. Post migration support to ensure full compatibility for client’s setup.
23. 10. With collaborative and integrated migration, one uses a proven methodology, and
rapid deployment methods aiming at making a smooth transition to the new
environment.
To implement ERP system successfully, it is important to migrate the data from old independent
functional and legacy systems to common ERP database. Data migration is the last activity
before the production phase of an ERP implementation, and therefore receives less attention due
to time constraints.
1. Identification of data that needs to be migrated
2. Time plan of data migration
3. Creating the data templates
4. Tool selection for data migration
5. Identification of data archiving techniques
Steps of data migration processing
SETP 1: Analysis: Before undertaking data migrations, in this phase do an analysis of how
much data need to be moved to ERP, from which legacy systems these data will come and
mapping those legacy application data statures with ERP system. This process is also called data
profiling and mapping.
Step2: Design: The design relates old data formats to the new systems’ s formats and
requirements.
Step3: Cleansing: Data cleansing is a major task and that may involve removing obsolete data,
removing duplicate entries fixing misspellings, errors etc.
Identify critical
data elements
Refer data
standards for
ciritical elements
Define data validation
rules by business process
owners
Identify data issues
from business process
owner
Data quality assment
Take corrective actiion
Improved data quality
24. Data cleansing Techniques
1. Standardizing
2. Matching
3. Consolidating
4. Correcting
5. Enriching
6. Parting
7. Conditioning
8. Scoring
Step 4: Extraction: This is an activity of extracting data from data sources for further data
processing and finally loading to the ERP System.
Step 5: Transform: Tis stage applies a series of rules or functions to the extracted data from the
source to derive the data to be loaded to the target system in the format needed by destination
system.
1) Source system has material master data in 10 digits and ERP systems need material
masters in 13 digits
25. 2) Translating coded values – the source system stores 1 for male and 2 for female but the
target system stores m for male and f for female. This needs mapping “male to “1” and
“m”.
Step 6: Load: In this, step, data is loaded into the ERP system. Again to make the process
automated, programmers can be written and sometimes ERP vendors also provide data loading
tools.
Several things need to be considered while loading data like:
1) Huge volumes of data to be loaded
2) Small time window available for loading
3) Online versus offline loads
Step 7: Verification: after loading into the new system, data need to e verified preferably by
some business users to determine that whether data is accurately translated, is complete, and
supports processes in the new system.
Classification of data to be migrated:
There are two sets of data which need to be migrated from legacy application to the new
ERP systems and these are master data and transaction data.
Examples of some master data objects which are taken up as part of data migration:
1) Chart of accounts
2) Cost centers
3) Profit centers
4) Asset master
5) Tax masters
6) Material master-finished, semi-finished, spares,
7) Price masters/condition master
8) Vendor master
9) Customer master
10) Employee master
11) Machines/equipment masters and
26. 12) Master inspection criteria for quality management.
Examples of some transaction data objects/open items which can be taken up as part of data
migration
1) Open internal orders
2) Excise balances
3) Stock balances – finished goods, raw material, spares
4) material in transit
5) Open service contracts and orders
6) open indents
7) open RFQs (Request For Quotations
8) open contracts and purchase orders
9) open sales contracts and orders and
10) loans and advances, contracts.
Data Migration Methods
Two primary methods are used for migrating data from the legacy systems to the new ERP
database
1) Manual data migration
Extract data
Legacy
dataManual
data
Legacy download
Legacy
programmemanual Source file
Approve
Source data
“Manipula
te” Source
DATA
Prepare Load
file
Source
file
Auto upload by
tools
Manual ERP
