Microsoft PowerPoint - ERP Implementation-dec

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Microsoft PowerPoint - ERP Implementation-dec

  1. 1. www.relevante.com
  2. 2. Presentation Topics • Enterprise Planning • Introduction to ERP • Evolution • Characteristics • Architecture • Advantages • Major features of ERP • Best Practices for an ERP Implementation through its lifecycle • Top 10 reasons ERP implementations fail 2 www.relevante.com
  3. 3. Plan to Perform • Traditional – manage performance by analyzing past results • You can’t alter performance after it happens • Value of Enterprise Planning – plan before you perform 3 www.relevante.com
  4. 4. Enterprise Planning • Core Principle – performance must be planned and continuously managed • Without a plan: • Vulnerable to unfolding events • Buffeted by unforeseen factors • Lack predictability • Core Benefit – adapt with greater flexibility and speed 4 www.relevante.com
  5. 5. Wide View of Enterprise Planning • Initially synonymous with budgeting • Implies cross-functional planning, breaking through silos that impede collaboration • Objective - All information in one holistic view on a common platform 5 www.relevante.com
  6. 6. Evolution of ERP systems 6 www.relevante.com
  7. 7. Evolution of ERP ERP Materials Extended Planning ERP Order Entry ERP - II Scheduling Distribution Forecasting Project Management General Ledger Capacity Knowledge Management Accounting Planning Workflow Management Shop Floor E-Commerce Customer Relationship Control Management Warehousing Human Resource Management Logistics Portal Capability Integrated Financials 7 www.relevante.com
  8. 8. Characteristics of ERP Systems • Modular Design • Uses centralized common database management systems • Modules integrated to provide seamless data flow • Flexible & offers best business practices • Work real time with online & batch processing capabilities 8 www.relevante.com
  9. 9. Architecture of an ERP System 9 www.relevante.com
  10. 10. Why implement an ERP System? • To support business goals • Integrated, on-line, secure, self-service processes for business • Eliminate costly mainframe/fragmented technologies • Improved Integration of Systems and Processes • Lower Costs • Empower Employees • Enable Partners, Customers and Suppliers 10 www.relevante.com
  11. 11. Advantages of ERP Systems • Reliable Information Access • Avoids Data & Operations Redundancy • Delivery & Cycle Time Reduction • Cost Reduction • Improved scalability • Global Outreach • E Commerce, E business 11 www.relevante.com
  12. 12. Major Features of ERP (1) • Company-wide Integrated Information System • Performs core Corporate activities and increases customer service • Bridges the information gap across the organization • Complete integration of Systems • Across departments • Across companies • Better Project Management 12 www.relevante.com
  13. 13. Major Features of ERP (2) • Automatic introduction of latest technologies (EFT), (EDI), Internet, Intranet, Video conferencing, E-Commerce, etc. • Eliminates most of the business problems like Material shortages, Productivity enhancements, Customer service, Cash Management, Inventory problems, Quality problems, Prompt delivery etc. • Addresses current requirements of the company and provides opportunity of continually improving and refining business processes. • Provides business intelligence tools like Decision Support Systems (DSS), Executive Information System (EIS), Reporting, Data Mining and Early Warning Systems (Robots) 13 www.relevante.com
  14. 14. Sometimes ERP - Implementation Performance Falls Short of Expectations… ne e Zo nc et a rg rm Ta rfo Pre-ERP Expectations Corrective Pe Action Must Be Applied le Acceptab nce Performa Post- Implementation Improvement objectives: Realizations Strategy enhanced and deployed End to end processes Pre-ERP Expectations: Post Implementation Frustrations: continuously improved People aligned and learning Integrated business processes Update legacy/customized ERP design and business processes Stakeholder value measured and programs unaligned enhanced Cross-functional efficiencies Manual processes work around system Enterprise Resource Cost and time savings constraints Management leveraged and Shareholder value enhanced Transactional complexity improved Competitive advantage secured Limited managerial reporting Sustain benefits Timely information Untimely information Optimize business connectivity Financial benefits fall short of expectations 14 www.relevante.com
  15. 15. If the end comes without sufficient up – front planning, you may hear what we sometimes hear . . . • There is a lack of user education on how “The ERP system has become more to use the system, resulting in many of a hindrance than help.” “workaround” processes • There are configuration problems • People do not want to use or are afraid to use the system • Full core functionality is not being used (reporting done externally) • Extensions are needed to provide needed functionality (product configurator, xxx) • Processes and the system may not be completely aligned The goal of a well planned implementation is not to create heroes The goal of a well planned implementation is not to create heroes 15 www.relevante.com
  16. 16. 16 www.relevante.com
  17. 17. The Five Levers of Change in any Organization Strategic understanding of the The governance model for the role, positioning and focus for management, administration, enterprise-wide decision-making and evaluation of initiatives, in support of overall organizational with a strong focus on the objectives e gy Co nt appropriate metrics applied for at measurement r ro St ls Alignment le Pro p Peo ces s Operating methods and The human resource practices, including policies environment, including skills, and procedures, which organizational culture, and determine the way activities Technology organizational structure are performed Enabling information systems, applications, tools, and infrastructure 17 www.relevante.com
  18. 18. ERP Implementation Lifecycle 18 www.relevante.com
  19. 19. ERP Implementation Lifecycle - Stage 1-Solution Inquiry • Key questions that a business should ask are: • Are we ready for ERP? • How will an ERP help our business? • Have we considered other solution areas beyond ERP? • Who will lead our implementation effort? 19 www.relevante.com
  20. 20. Best Practices for Stage 1- Solution Inquiry • Identify what benefits the organization needs to get out of an ERP, and focus on these benefits throughout the implementation • Executive management should endorse the ERP project • Develop a Mission Statement or Project Charter • Establish metrics to measure how well the objectives of the ERP effort are being met. • Designate a Project Champion • Implementation responsibilities to be shared between the IT department and functional areas • Build a framework for participation from all quarters 20 www.relevante.com
  21. 21. Best Practices for Stage 1- Solution Inquiry Persons directly responsible for ERP implementations Other COO CTO CFO CIO IT Director CEO/President 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% Source: IT toolbox ERP Implementation Survey 21 www.relevante.com
  22. 22. ERP Implementation Lifecycle-Stage 2-ERP Approach • Key questions that a business should ask are: • Do we have the in house resources, skills and experience to implement ERP? • Should we build effective strategic partnerships? • Have we considered how the implementation will differentiate our business? • Have we developed a business case for the ERP implementation project? 22 www.relevante.com
  23. 23. Best Practices for Stage 2- ERP Approach • Determine the number of partners, the scope of the partnerships etc. • Set up the internal project team • Steering Committee (Executive level) • Advisory Committee (One level lower,-Key Directors & major stakeholders) • Cross Functional Project Team • Create the business case, justification & ROI scenarios to determine the most feasible approach • Ensure that all gaps between plans & performance are closed out 23 www.relevante.com
  24. 24. ERP Implementation Lifecycle - Stage 3 - Package Selection • Key questions that a business should ask are: • Do the features and functions meet our needs? • Is the ERP package compatible with our business? • Should we buy an integrated package from a single vendor or best-of-breed solutions from several vendors? 24 www.relevante.com
  25. 25. Best Practices for Stage 3- Package Selection • Develop and document a project scope statement • Conduct a business process review & identify signature business processes • Document “as is” flows of current information • Identify functional gaps • Document & sign off “to-be” flows of current information • Customize the RFP to include features that meet your “to-be” flows • Key factors should be kept in mind while selecting the software • Functional Capabilities • Technical Attributes • Partnership’s Capabilities • Cost 25 www.relevante.com
  26. 26. ERP Implementation Lifecycle – Stage 4 - Implementation Plan • Key questions that a business should ask are: • How do we get started with the implementation? 26 www.relevante.com
  27. 27. ERP Implementation Methodologies • The Big Bang • Modular Implementation • Process Oriented Implementation 27 www.relevante.com
  28. 28. Implementation Approach Phase Tasks Deliverables • Project Initialization • Accepted norms & Conditions Detailed • Evaluation of current processes, • Project Organization Chart Discussions business practices, requirements • Identify Work Teams • Set-Up Project Organization • Organization Structure • Map Organization • Design Specification • Map Business Processes • Process Flow Diagrams Design & • Define Functions and Processes Customization • Function Model • ERP S/w Configuration • Configuration Recording • Build ERP System Modifications • Systems Modification • Create G o-Live Plan & Documentation • Testing Environment report Implementation/ • Integrate Applications • Customization Test Report Prepare to Go Live • Test the ERP Customization • Implementation Report • Train Users • Run Trial Production • Reconciliation Reports Production / Go Live • Maintain Systems • Conversion Plan Execution 28 www.relevante.com
  29. 29. Implementation Time Size of Business Scope Of Processes 29 www.relevante.com
  30. 30. Best Practices for Stage 4 - Implementation Plan • Procure and install required hardware and package software • Roll out with preliminary implementation plan that covers • A Phased Approach • Segregation of Duties Plan • Quality Plan • Security Plan • Package training for implementation team • Project team members’ normal job responsibilities should be reassigned to other employees/outside consultants for the project duration 30 www.relevante.com
  31. 31. ERP Implementation Lifecycle - Stage 5 - Sandbox • Key questions that a business should ask are: • What steps do we take to ensure that the implementation is on track? 31 www.relevante.com
  32. 32. Best Practices for Stage 5 - Sandbox • Create a separate dedicated work environment specifically for the project team • Build user acceptance test scripts • Identify required custom reports • Implement a system of sign off’s & hand off’s for deliverables and work products • Ensure complete data migration from the old software system to the new begins early in the implementation process • Constantly evaluate risks, constraints & assumptions • Develop training plan for all users • Develop rollout plan 32 www.relevante.com
  33. 33. ERP Implementation Lifecycle - Stage 6 - Design & Deployment • Key questions that a business should ask are: • How do we ensure that the project team and the end users are in sync? • How do we ensure that our people are accepting change? 33 www.relevante.com
  34. 34. Best Practices for Stage 6- Design & Deployment • Roll out training plan for all users in a phased manner • Conduct user group conferences & prototype sessions to demonstrate the system’s capabilities • Solicit feedback from end users and ensure that all concerns & questions are addressed • Encourage end users to network with peers at other institutions undergoing similar implementation initiatives • Ensure that implementation information is continuously communicated to the user community • Pilot rollout / evaluation • Complete live rollout - rollout support 34 www.relevante.com
  35. 35. ERP Implementation Lifecycle - Stage 7- ERP Integration • Key questions that a business should ask are: • How do we integrate the ERP with our other legacy systems? 35 www.relevante.com
  36. 36. Best Practices for Stage 7- ERP Integration • Design interfaces ( if required) to integrate existing applications (e.g. CRM, HR) directly with the ERP system • Ensure adequate documentation exists to support the integration between interfaces 36 www.relevante.com
  37. 37. ERP Implementation Lifecycle - Stage 8 - IT Infrastructure • Key questions that a business should ask are: • Is our IT infrastructure ready for ERP? 37 www.relevante.com
  38. 38. Best Practices for Stage 8 - IT Infrastructure • Set up server infrastructure to build training, development and production instances that run concurrently • Ensure that the infrastructure can handle the load of concurrent transactions from all instances • Ensure system security policy is in force 38 www.relevante.com
  39. 39. ERP Implementation Lifecycle - Stage 9 - Operations • Key questions that a business should ask are: • How will we recover from a major outage? 39 www.relevante.com
  40. 40. Best Practices for Stage 9 - Operations • Execute a onsite maintenance SLA with partners • Implement a Disaster Recovery Plan • Review Business Impact & Associated Risk • Off site backups • Provide disaster recovery training to key personnel 40 www.relevante.com
  41. 41. ERP Implementation Lifecycle - Stage 10 - Extending the Enterprise • Consider expanding ERP to other solution areas • Supply Chain Management • Customer Relationship Management • E-commerce Solutions 41 www.relevante.com
  42. 42. ERP Implementation Lifecycle - Stage 10 - Extending the Enterprise Key decision makers in adding new modules Others CTO COO CIO CEO/President IT Director CFO 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% Source: IT toolbox ERP Implementation Survey 42 www.relevante.com
  43. 43. Current Enterprise Applications Environment Combination of standalone & bespoke packages, Mainly based on Combination of 3% integrated ERP integrated and packages, bespoke packages, 44% 11% Combination of integrated and standalone packages, 21% Mainly based on bespoke Mainly based on applications, standalone packages, 14% 7% Source: PMP Research 43 www.relevante.com
  44. 44. Enterprise/ERP Systems Usage Do you feel that you are using your existing enterprise or ERP software to its full extent? Yes, software is used to its full extent, 5% Yes, Software is used extensively, 22% No, a large portion of the software is not used, 32% No, a small portion of the software is not used, 41% Source: PMP Research 44 www.relevante.com
  45. 45. ERP Implementation Quality How would you describe the information delivered to managers in your organization via your ERP and enterprise systems? Information is Information is targeted or generally available, personalized for but managers need to specific identify which functions/managers, elements are 29% relevant, 44% Other, 7% Many managers within the organization are suffering from an "information overload" and cannot pick what is relevant, 20% Source: PMP Research 45 www.relevante.com
  46. 46. Top Ten Reasons ERP Implementations Fail 1. Governance Lack of a single person in charge who reports directly to openly supportive senior executive accountable for the solution. Also, ineffective steering body of cross-functional senior executives 2. Scope Failure to align contract for services with the requirements expectations. Also, make sure initial scope is achievable to build momentum 3. Change Management Insufficient investment in all facets of change management 4. Skills Team members lack a thorough understanding of the technical capabilities of the solution or of the underlying business processes 5. Decision Making Relying too much on consensus-based decision- making, rather than rapid evaluation of options 46 www.relevante.com
  47. 47. Top Ten Reasons ERP Implementations Fail 6. Communications Lacking at all levels (executives, functional owners, across team, with working level system users, external stakeholders, etc.) 7. Solution Architecture Lack of a solution architecture or proven implementation methodology 8. Training Insufficient investment at all levels (including executives) 9. Culture Trying to force an integrated, enterprise-wide solution into a stove-piped culture. Systemic resistance to change 10. Leadership Lack of “public” leadership from senior, accountable executive and/or lack of continuity in this leadership position 47 www.relevante.com

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