ERP System Post Implementation Audit - Part-1. This audit material will be useful for any one doing the ERP Systems audit after implementation.

1. ERP SYSTEM
POST
IMPLEMENTATION
AUDIT
Part-1
SYSTEMS

2. 2
AGENDA
1 ERP System Implementation
2 Key Project Deliverables
3 Project Critical Phases
4 ERP System Go Live Concept
5 ERP Post Go Live Concept
6 ERP Post Go Live Optimisation
7 ERP System Customer Experience
8 ERP System Success/Risk Factor
9 Post Implementation Review (PIR)
10 PIR-Deliverables
9.30am- 5.30pm
Tea Break-20 mins (11am & 3pm)
Lunch-45 mins (1pm)

3. 3
INTRODUCTION
 This material is designed to make reading and understanding an ERP System
more interesting and accessible for a Post Implementation Review (PIR).
 It covers ERP Implementatioin phases together with a brief of each phase.
 It highlights key project deliverables and their significance.
 This material brings out the importance of a PIR of an ERP System.
 It also runs through succcess/risk factor of ERP Implementation.
 This manual does not claim to be an exhaustive account of all a consultant
needs to know about ERP projects and post implementation review.
 The sole aim of this material is to help a consultant to measure the system
performance in terms of efficient usage,identify opportunities for ongoing
improvements, training, business process refinements, enhancement of
internal controls and legal compliance.

4. 4
PRELUDE- RELEVANCE OF ‘IT’ IN A BUSINESS ENTITY
Several business functions and activities happen within the IT systems,
like:
 Automatic computation and calculations (Inventory valuation, bank
interest, etc).
 Automatic and Real-time posting of accounting entries (for example,
sub-ledger (AP,AR,AA & MM) to GL postings).
 Automatic application of Business policies and procedures, including
internal controls, (for example, delegation of authority for journal
approvals, customer credit limit checks, etc).
 System driven reporting for Management decision (for example,
daily sales analysis, debtors ageing report,etc).
 Role based User access and security controls (for example,
segregation of duties}.
BUSINESS PROCESS
AUTOMATION
Source: ICAI

5. 5
PRELUDE- RELEVANCE OF ‘IT’ IN A BUSINESS ENTITY..Cont’d
 Need to understand the relevance of the IT systems as well as IT specific
risks related to a financial statements.
 IT specific risks include:
 Inadequate business process mapping
 Process of inaccurate data
 Lack of system support (team)
 Direct data changes (backend changes)
 Unauthorised access
 Loss of data
 Discontinuation of Product vendor support, etc
Regulatory
Requirements
(Companies Act
2013 IFC)
IT Specific Risks

6. 6
ERP SYSTEM IMPLEMENTATON
Synchronization of Company functions...
 An IT based transaction processing system capable of
operating in a real time basis
 Covers strategic and operational requirements of the
business
 Modules, programs and processes are tightly integrated
 ERP systems incorporate best practices and internal
controls into each module/component
 Integrated information management and retrieval system
WHAT’S ERP
ERP SYSTEM
SAP
ORACLE MICROSOFT
Above ERP system list is not exhaustive.

7. 7
ERP SYSTEM IMPLEMENTATON….cont’d
WHY ERP- CUSTOMERS’ REASON (GENERAL)
 To improve business performance
 To replace legacy system
 To better integrate systems across multiple locations
 To position the company for growth
 To better serve customers
 To ensure reporting/regulatory compliance
 To make employee jobs easier
 To standardise global business operations
 To reduce working capital, etc

8. 8
ERP SYSTEM IMPLEMENTATON….cont’d
IMPLEMENTATION STEPS
Step 01: Business Case
Major Activities:
1. Identify and analyze current issues
2. Assess the benefits of ERP
3. Evaluate ERP options
4. Estimate project costs
5. Determine ROI
6. Identify implementation risks
7. Create a high-level ERP implementation
plan
ERP system typically requires a
significant investment in :
 Management buy-in;
 Capital outflow;
 Change management;
 Data migration;
 Business process reengineering; etc
spanning over three to four months of
effort.
Business case is not just about calculation of financials and benefits, its a core tool to ensure
Management commitment to realise the benefits of an ERP System.

9. 9
ERP SYSTEM IMPLEMENTATON…cont’d
STEP 01-BUSINESS CASE… Cont’d
S.No Major Activities Description
1 Identify and analyse current
issues  No standardised business processes
 Data integrity problem
 Time consuming book (accounts) closure
 Impact on decision-making process due to lack of real time
data
 Business growth not supported by legacy system
 Inability in meeting customer expectations
 Standalone systems on different platforms
List is not exhaustive

10. 10
ERP SYSTEM IMPLEMENTATON…cont’d
STEP 01-BUSINESS CASE… Cont’d
S.No Major Activities Description
2 Assess the benefits of ERP
 Integrated package covering end to end business operations
 Capable of streamlining business processes
 Enhances productivity and customer response
 Addresses local legal requirements
 Management of internal controls
 Supports decision-making process in real time
 Ensures Data integrity and security
 Robust and scalable
 Ease of use of ERP System
List is not exhaustive

11. 11
ERP SYSTEM IMPLEMENTATON…cont’d
STEP 01-BUSINESS CASE… Cont’d
S.No Major Activities Description
3 Evaluate ERP Options
 Product vendor business performance & market reputation
 Assured product vendor support
 Ease of maintenance
 Capable of On-premise/cloud deployment
 Supports multi-system interface
4 Estimate Project Costs
 Product Licensing costs
 Hardware costs (including installation costs)
 Project Implementation costs
 Employee training costs
 ERP support and mainteance costs
List is not exhaustive

12. 12
ERP SYSTEM IMPLEMENTATON…cont’d
STEP 01-BUSINESS CASE… Cont’d
S.No Major Activities * Description
5 Determine ROI
 Tangible benefits:
 increased turnover,
 reduction in operating costs,
 man power reduction, etc
 Intangible benefits:
 faster book closure,
 improved customer response,
 standardised business processes, etc
 Analysis of legacy and proposed systems’ operating costs
List is not exhaustive

13. 13
ERP SYSTEM IMPLEMENTATON…cont’d
STEP 01-BUSINESS CASE… Cont’d
S.No Major Activities Description
6 Identify implementation risks
 Change Management (impact on employees)
 Effort and cost of business process engineeriing
 Impact of software customisation
 Big bang or phased implementation
 Lack of expertise in case of in-house implementation
 Impact on employee morale in case of Outsourcing
List is not exhaustive

14. 14
ERP SYSTEM IMPLEMENTATON…cont’d
STEP 01-BUSINESS CASE… Cont’d
S.No Major Activities Description
7 Create a high level ERP
Implementation Plan  Project path
 Resource deployment
 Execution time frame
 Project Management
Decision to implement an ERP hinges upon proper business case, as ERP projects are highly cross-
functional in nature and enterprise-wide in scope and poses a big challenge to estimate costs and
benefits.
Business case being a fundamental element in an ERP selection & Implementation, it
should be part of PIR Scope.
List is not exhaustive

15. SAP POST GO LIVE REVIEW (PIR)
Contd…Part-
2