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ERP READINESS AUDIT
      IMPORTANCE IN
    ERP PROJECT SUCCESS
VELCOM ERP IT SOURCING PVT LTD
     An Independent ERP Consulting & Talent Sourcing Company




                                                  VELCOM
                                                  Exceed Expectation
ERP READINESS AUDIT - INTRODUCTION
   ERP Readiness Audit is the process used to find out the readiness level of the
    organization to execute the ERP project initiative and identify specific areas to focus on
    in its preparation process.
   It is the ideal first step for organization to take in its ERP project initiative
   This would help organization to clearly understand its current readiness level and have
    an action plan to be fully ready to implement the ERP project successfully.
   The key business users should be involved in this audit phase, so that they assume
    ownership of the ERP project initiative.
   The purpose of the Readiness Audit is to
       Evaluate the level of overall preparedness of the organization to carry out a
          successful ERP implementation.
       Assess effectively the readiness of the client employees to adapt a new ERP system
       Develop employee buy-in to the project
   Readiness Audit to gauge how prepared the organization is, has to be done with a
    minimum target score, below which the ERP implementation has to be postponed.
   The organization should then first concentrate on improving the business process,
    systems and procedures before initiating the ERP Implementation.
   Many ERP implementations fail not because of any technical defect in the software but
    because the organization is not ready for it yet.
                                                                               VELCOM
                                                                               Exceed Expectation
ERP READINESS AUDIT
   Organization structure, processes & culture impacts the ERP project success and it should
    be frequently audited & improvements areas to be identified.
   Audit should include how the enterprise is organized as well as the state of processes,
    company direction, culture, and other factors.
   Organizations make considerable investments in ERP projects and expect early stabilization
    & benefits. While the benefits exist, normally the project timelines / budget exceed target,
    as challenges / risks normally occur in any such initiative involving varied business users
    and data sources.
   This is primarily due to lack of basic preparation done prior to initiating such a crucial
    initiative.
   Organization normally under-estimate the operational groundwork that need to be done
    before starting ERP project. At a high level these include:
       What information is required?
       How will the information be retrieved?
       Who would have access to what information?
       How should the Users be prepared for usage of the new erp system?
   This is done before the ERP selection phase & so gives neutral view of the business
    requirements & project readiness. Refers to requirements identification & should be
    focused on requirement needed by business at different stages.
                                                                               VELCOM
                                                                               Exceed Expectation
ERP READINESS AUDIT
   Could be advantageous to review the business processes for rationalization, which in
    turn might refine the requirement. Some of the simple steps are:
      Identify the business functions & start from the bottom up to determine the requirements of
       the various stakeholders in each of these business functions.
      Deliberate with business users to classify requirements as ‘Mandatory’ & ‘Nice to have’
   Organizations build further on the preparation based on their business &IT maturity.
   RA designed to help objectively evaluate business operations & point out problem areas
    before implementing ERP. Audit effectively assess the client employees readiness to
    adapt the new ERP system & to develop employee buy-in to the project.
   Analyze & optimize employee acceptance and address resistance to the potential ERP
    organizational changes. The audit activities are:
      Conduct an executive survey / workshop to ensure that the project objectives are aligned with
       the enterprise strategic direction
      Facilitate formal / informal communications with the organization staff & Determine largest
       areas of organizational resistance
      Identify lessons learnt from previous relevant project initiatives & Assess employee
       competencies relative to ERP skill requirements
      Identify major organizational / job changes resulting from ERP implementation
      Provide       recommendation         regarding     organizational    change    management,
       training & communications

                                                                                    VELCOM
                                                                                    Exceed Expectation
ERP READINESS AUDIT - PURPOSE
   Help identify specific areas for the organization & Project team to focus on as they
    prepare to select & implement the ERP solution.
   RA is measurement of current processes status before starting the project. The results
    will help ensure that an ERP implementation meets or exceeds the established goals that
    have been set for the initiative.
   Involves a wide range of discussions in the following areas:
      Organizational Structure, Culture, Corporate Philosophy, Vision & Mission
      ERP Business Goals / Objectives & Functional Breakdown
      Process & Data Flows Documentation
      Existing Technical & Data Infrastructure
   RA impacts organization structure / process and the project implementation. Reasons for
    RA are:
      Better alignment between Management, Business & IT
      ERP project costs are high and need justification.
      Improve customer responsiveness
      Meeting organization growth plans & restructuring
      Enhanced process / system standardization
      Challenges in realizing Project ROI
                                                                            VELCOM
                                                                            Exceed Expectation
ERP READINESS AUDIT
   RA focuses on key processes / structures with higher priority. Strong justification is
    required for the audit to get the required participation from the stakeholders.
   Readiness audit also helps to:
      Reduce significant proportion of the resource costs & project elapsed time
      Achieve the projected benefits of ERP in a shorter timeframe
   Following improvements areas are to be identified once the current level of readiness is
    determined:
      Assess educational requirements to improve the employees understanding level
         regarding business practices
      Executive management must focus on prioritized activities that need attention
      Determine the root cause of existing challenges & Assign a realistic due date to
         overcome them
      Assign accountability & responsibility for determining the problem root cause and
         resolve them
      Monitor progress & frequently review the status




                                                                             VELCOM
                                                                             Exceed Expectation
THANK YOU!




             VELCOM
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ERP Readiness Audit Importance for ERP Project Success

  • 1. ERP READINESS AUDIT IMPORTANCE IN ERP PROJECT SUCCESS VELCOM ERP IT SOURCING PVT LTD An Independent ERP Consulting & Talent Sourcing Company VELCOM Exceed Expectation
  • 2. ERP READINESS AUDIT - INTRODUCTION  ERP Readiness Audit is the process used to find out the readiness level of the organization to execute the ERP project initiative and identify specific areas to focus on in its preparation process.  It is the ideal first step for organization to take in its ERP project initiative  This would help organization to clearly understand its current readiness level and have an action plan to be fully ready to implement the ERP project successfully.  The key business users should be involved in this audit phase, so that they assume ownership of the ERP project initiative.  The purpose of the Readiness Audit is to  Evaluate the level of overall preparedness of the organization to carry out a successful ERP implementation.  Assess effectively the readiness of the client employees to adapt a new ERP system  Develop employee buy-in to the project  Readiness Audit to gauge how prepared the organization is, has to be done with a minimum target score, below which the ERP implementation has to be postponed.  The organization should then first concentrate on improving the business process, systems and procedures before initiating the ERP Implementation.  Many ERP implementations fail not because of any technical defect in the software but because the organization is not ready for it yet. VELCOM Exceed Expectation
  • 3. ERP READINESS AUDIT  Organization structure, processes & culture impacts the ERP project success and it should be frequently audited & improvements areas to be identified.  Audit should include how the enterprise is organized as well as the state of processes, company direction, culture, and other factors.  Organizations make considerable investments in ERP projects and expect early stabilization & benefits. While the benefits exist, normally the project timelines / budget exceed target, as challenges / risks normally occur in any such initiative involving varied business users and data sources.  This is primarily due to lack of basic preparation done prior to initiating such a crucial initiative.  Organization normally under-estimate the operational groundwork that need to be done before starting ERP project. At a high level these include:  What information is required?  How will the information be retrieved?  Who would have access to what information?  How should the Users be prepared for usage of the new erp system?  This is done before the ERP selection phase & so gives neutral view of the business requirements & project readiness. Refers to requirements identification & should be focused on requirement needed by business at different stages. VELCOM Exceed Expectation
  • 4. ERP READINESS AUDIT  Could be advantageous to review the business processes for rationalization, which in turn might refine the requirement. Some of the simple steps are:  Identify the business functions & start from the bottom up to determine the requirements of the various stakeholders in each of these business functions.  Deliberate with business users to classify requirements as ‘Mandatory’ & ‘Nice to have’  Organizations build further on the preparation based on their business &IT maturity.  RA designed to help objectively evaluate business operations & point out problem areas before implementing ERP. Audit effectively assess the client employees readiness to adapt the new ERP system & to develop employee buy-in to the project.  Analyze & optimize employee acceptance and address resistance to the potential ERP organizational changes. The audit activities are:  Conduct an executive survey / workshop to ensure that the project objectives are aligned with the enterprise strategic direction  Facilitate formal / informal communications with the organization staff & Determine largest areas of organizational resistance  Identify lessons learnt from previous relevant project initiatives & Assess employee competencies relative to ERP skill requirements  Identify major organizational / job changes resulting from ERP implementation  Provide recommendation regarding organizational change management, training & communications VELCOM Exceed Expectation
  • 5. ERP READINESS AUDIT - PURPOSE  Help identify specific areas for the organization & Project team to focus on as they prepare to select & implement the ERP solution.  RA is measurement of current processes status before starting the project. The results will help ensure that an ERP implementation meets or exceeds the established goals that have been set for the initiative.  Involves a wide range of discussions in the following areas:  Organizational Structure, Culture, Corporate Philosophy, Vision & Mission  ERP Business Goals / Objectives & Functional Breakdown  Process & Data Flows Documentation  Existing Technical & Data Infrastructure  RA impacts organization structure / process and the project implementation. Reasons for RA are:  Better alignment between Management, Business & IT  ERP project costs are high and need justification.  Improve customer responsiveness  Meeting organization growth plans & restructuring  Enhanced process / system standardization  Challenges in realizing Project ROI VELCOM Exceed Expectation
  • 6. ERP READINESS AUDIT  RA focuses on key processes / structures with higher priority. Strong justification is required for the audit to get the required participation from the stakeholders.  Readiness audit also helps to:  Reduce significant proportion of the resource costs & project elapsed time  Achieve the projected benefits of ERP in a shorter timeframe  Following improvements areas are to be identified once the current level of readiness is determined:  Assess educational requirements to improve the employees understanding level regarding business practices  Executive management must focus on prioritized activities that need attention  Determine the root cause of existing challenges & Assign a realistic due date to overcome them  Assign accountability & responsibility for determining the problem root cause and resolve them  Monitor progress & frequently review the status VELCOM Exceed Expectation
  • 7. THANK YOU! VELCOM Exceed Expectation