ERP Key Success Factors Series 1

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ERP Key Success Factors Series 1 includes the first 5 factors namely:
1) Top Management Commitment
2) Clear Goal Setting & Budget Planning
3) Good Project Team - Client & Vendor
4) Change Management
5) Business Process Re-Engineering

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  • Enables streamlining of business processes & simplify management of complex tasks such as order management, logistics, material planning, inventory traceability & machine workload managementHelps optimize operations & support compliance with legal, regulatory & market requirements to profitably satisfy customers & gain acompetitive advantageHelps component, sub-assembly & whole-system manufacturers increase operational visibility, enhance control of processes & projects & fuel expansion into new territories & services
  • Enables streamlining of business processes & simplify management of complex tasks such as order management, logistics, material planning, inventory traceability & machine workload managementHelps optimize operations & support compliance with legal, regulatory & market requirements to profitably satisfy customers & gain acompetitive advantageHelps component, sub-assembly & whole-system manufacturers increase operational visibility, enhance control of processes & projects & fuel expansion into new territories & services
  • Enables streamlining of business processes & simplify management of complex tasks such as order management, logistics, material planning, inventory traceability & machine workload managementHelps optimize operations & support compliance with legal, regulatory & market requirements to profitably satisfy customers & gain acompetitive advantageHelps component, sub-assembly & whole-system manufacturers increase operational visibility, enhance control of processes & projects & fuel expansion into new territories & services
  • Enables streamlining of business processes & simplify management of complex tasks such as order management, logistics, material planning, inventory traceability & machine workload managementHelps optimize operations & support compliance with legal, regulatory & market requirements to profitably satisfy customers & gain acompetitive advantageHelps component, sub-assembly & whole-system manufacturers increase operational visibility, enhance control of processes & projects & fuel expansion into new territories & services
  • Enables streamlining of business processes & simplify management of complex tasks such as order management, logistics, material planning, inventory traceability & machine workload managementHelps optimize operations & support compliance with legal, regulatory & market requirements to profitably satisfy customers & gain acompetitive advantageHelps component, sub-assembly & whole-system manufacturers increase operational visibility, enhance control of processes & projects & fuel expansion into new territories & services
  • Enables streamlining of business processes & simplify management of complex tasks such as order management, logistics, material planning, inventory traceability & machine workload managementHelps optimize operations & support compliance with legal, regulatory & market requirements to profitably satisfy customers & gain acompetitive advantageHelps component, sub-assembly & whole-system manufacturers increase operational visibility, enhance control of processes & projects & fuel expansion into new territories & services
  • Enables streamlining of business processes & simplify management of complex tasks such as order management, logistics, material planning, inventory traceability & machine workload managementHelps optimize operations & support compliance with legal, regulatory & market requirements to profitably satisfy customers & gain acompetitive advantageHelps component, sub-assembly & whole-system manufacturers increase operational visibility, enhance control of processes & projects & fuel expansion into new territories & services
  • Enables streamlining of business processes & simplify management of complex tasks such as order management, logistics, material planning, inventory traceability & machine workload managementHelps optimize operations & support compliance with legal, regulatory & market requirements to profitably satisfy customers & gain acompetitive advantageHelps component, sub-assembly & whole-system manufacturers increase operational visibility, enhance control of processes & projects & fuel expansion into new territories & services
  • Enables streamlining of business processes & simplify management of complex tasks such as order management, logistics, material planning, inventory traceability & machine workload managementHelps optimize operations & support compliance with legal, regulatory & market requirements to profitably satisfy customers & gain acompetitive advantageHelps component, sub-assembly & whole-system manufacturers increase operational visibility, enhance control of processes & projects & fuel expansion into new territories & services
  • Enables streamlining of business processes & simplify management of complex tasks such as order management, logistics, material planning, inventory traceability & machine workload managementHelps optimize operations & support compliance with legal, regulatory & market requirements to profitably satisfy customers & gain acompetitive advantageHelps component, sub-assembly & whole-system manufacturers increase operational visibility, enhance control of processes & projects & fuel expansion into new territories & services
  • Enables streamlining of business processes & simplify management of complex tasks such as order management, logistics, material planning, inventory traceability & machine workload managementHelps optimize operations & support compliance with legal, regulatory & market requirements to profitably satisfy customers & gain acompetitive advantageHelps component, sub-assembly & whole-system manufacturers increase operational visibility, enhance control of processes & projects & fuel expansion into new territories & services
  • Enables streamlining of business processes & simplify management of complex tasks such as order management, logistics, material planning, inventory traceability & machine workload managementHelps optimize operations & support compliance with legal, regulatory & market requirements to profitably satisfy customers & gain acompetitive advantageHelps component, sub-assembly & whole-system manufacturers increase operational visibility, enhance control of processes & projects & fuel expansion into new territories & services
  • Enables streamlining of business processes & simplify management of complex tasks such as order management, logistics, material planning, inventory traceability & machine workload managementHelps optimize operations & support compliance with legal, regulatory & market requirements to profitably satisfy customers & gain acompetitive advantageHelps component, sub-assembly & whole-system manufacturers increase operational visibility, enhance control of processes & projects & fuel expansion into new territories & services
  • ERP Key Success Factors Series 1

    1. 1. ERP KEY SUCCESS FACTORS:<br />SERIES 1 (FACTOR 1 – 5)<br />VELCOM ERP IT SOURCING PVT LTD<br />An Independent ERP Consulting & Talent Sourcing Company<br />1<br />
    2. 2. ERP KEY SUCCESS FACTORS: SERIES 1<br /><ul><li>Top Management Commitment
    3. 3. Clear Goal Setting & Budget Planning
    4. 4. Good Project Team - Client & Vendor
    5. 5. Change Management
    6. 6. Business Process Re-Engineering</li></ul>2<br />
    7. 7. TOP MANAGEMENT COMMITMENT<br /><ul><li>Senior management support & commitment is one of the major critical success factors for ERP projects.
    8. 8. Committing the planned resources available for the ERP project is one of the ways to show the top management support & commitment, which would help the ERP project Implementation to be successful.
    9. 9. Delegating critical ERP implementation tasks to the lower management levels (who neither have competency nor authority) often results in
    10. 10. Delay in decision making
    11. 11. Missing deadlines
    12. 12. Lost sight of big picture!
    13. 13. Lack of team work</li></ul>3<br />
    14. 14. TOP MANAGEMENT COMMITMENT<br />Top management support & commitment provides the following for the ERP implementation project:<br /><ul><li>Strong project leadership, as they set the direction & strategy for the company
    15. 15. Accomplish the project objectives & aligning these goals with strategic business goals
    16. 16. Puts the business first & uses technology as an business enabler and not vice versa
    17. 17. Provide the project direction & create strategic imprint through active participation
    18. 18. Executive participation emphasize the ERP initiative importance within the company
    19. 19. Compels the implementation vendor to put their best resources for the projects </li></ul>4<br />
    20. 20. CLEAR GOAL SETTING & BUDGET PLANNING<br /><ul><li>Clear goal setting increases the chances for a smooth implementation and maximizes the return on investment
    21. 21. Organizations should understand that there are no magic acts in ERP software to achieve the set goals like press a button to reduce / increase the inventory or a task to run.
    22. 22. ERP Project Road map has to be framed to meet the Present & Future business objectives of the organization
    23. 23. ERP Goals are applicable for the various levels of the organization like Management, Business & IT. These goals would be Strategic, Operational & Tactical.
    24. 24. Few key ERP goals are: Centralized Data & Integrated Systems; Standardized Business Processes; Integrate & Streamline Operations; Increase Revenue; Customer Satisfaction; Reduce Cost by Improved Efficiency; Increase Employee Productivity; Collaborate well across Supply Chain; Manage Inventory well; Material Requirement Planning
    25. 25. Effort is involved to achieve the above goals, in determining how the ERP can solve the problems that allow organization to achieve these specific goals.</li></ul>5<br />
    26. 26. CLEAR GOAL SETTING & BUDGET PLANNING<br /><ul><li>More than 90% of the ERP projects have exceeded the initial project budget
    27. 27. The primary reason is that all the costs associated with ERP are not identified during the budgeting phase of the ERP Project
    28. 28. Many organizations hurry the ERP evaluation phase, due to difficulty in coordinating their employees & don't clearly draft the requirements / project budget and this lead to ERP project cost over runs.
    29. 29. The high level ERP project budget plan should comprise of (among other things):
    30. 30. Initial Budget (License & Services) for the Procurement & Recurring Budget (License & Services) for the Maintenance & Support of
    31. 31. Resource – Resources involved between the client & vendor teams for the ERP Project (Implementation / Customization / Training)
    32. 32. Software – Primary ERP software, related software (like Business Productivity Software, OS, DB, Add-on’s)
    33. 33. Hardware – Server, PCs, Others like Firewall, Anti-Virus etc.,
    34. 34. Infrastructure – Internet Bandwidth, Remote Connectivity</li></ul>6<br />
    35. 35. GOOD PROJECT TEAM – CLIENT & VENDOR<br /><ul><li>ERP project team needs to represent all functions of the business in order to identify the right ERP solution for the business
    36. 36. Project team members must have the requisite skills & experience to fulfill their roles.
    37. 37. The right candidates are those who have
    38. 38. Deep understanding of the organization & its processes
    39. 39. Relevant industry knowledge & respect among their peers
    40. 40. Organization should realize that having these best people on the project is an important investment for the future organization growth through a successful ERP Implementation.
    41. 41. These people would need to spend most of their time for the ERP implementation till the project completion.
    42. 42. Organization need to delegate some of their work load to other employees or temporary / contract employees to pick up the slack.</li></ul>7<br />
    43. 43. GOOD PROJECT TEAM – CLIENT & VENDOR<br /><ul><li>Following types of individuals are to be avoided for the client project team:
    44. 44. The ‘9 to 5’ candidate
    45. 45. The ‘This person is threatening to leave, so I’ll keep them by putting them on this project’ candidate
    46. 46. The ‘I don’t know what to do with this person’ candidate
    47. 47. The ‘Not competent at the job they are currently doing’ candidate
    48. 48. ERP Project Team Structure
    49. 49. The Steering Committee: Strategic-level responsibility for the project plan review & approval, track project progress, take critical decisions.
    50. 50. The Core Team: Responsible for managing the implementation project.
    51. 51. Functional Teams: Ownership for implementation of the business process changes in their corresponding functional departments.</li></ul>8<br />
    52. 52. CHANGE MANAGEMENT<br /><ul><li>Changes mean that top management, managers & low level employees have to stop the old approach and learn new ways of doing business.
    53. 53. Some people would embrace the challenges & opportunities due to change and they would help the ERP project move forward. Others would fear the uncertainties associated with change and may resist the ERP project.
    54. 54. More than 50% of organizations, come across change management, during a new ERP roll out. Most of these organizations assess their change management ability as poor.
    55. 55. New ERP Impact is less mostly on
    56. 56. Top management – As their primary focus is MIS & approvals
    57. 57. IT team – As they would have prior such experience and understand the benefits of ERP Implementation.
    58. 58. New ERP Impact is high on Business users,, as most of them would get first exposure on such initiative</li></ul>9<br />
    59. 59. CHANGE MANAGEMENT<br /><ul><li>An effective organizational change management plan is critical to help employees understand & leverage the new found operational visibility in the new ERP system.
    60. 60. Employee change resistance examples include:
    61. 61. Those who object to short-term business interruptions caused by the changes, notwithstanding the long-term benefits.
    62. 62. Those who object as they have performed the same manual tasks for decades and are afraid of or don’t want to learn new processes.
    63. 63. Those who object as their job functions would change as a result of process re-engineering & automation.
    64. 64. Those who object to give their top performers to the ERP project because their non-availability would have a negative impact on their departmental performance.</li></ul>10<br />
    65. 65. CHANGE MANAGEMENT<br /><ul><li>Effective ways to create employee buy-in for the new system:
    66. 66. Good communication is key to understand that the changes, though difficult, add greater value in the long run.
    67. 67. Open discussion on process changes/improvements will increase the company health, can allow employees to see that their own position be more secure with more growth
    68. 68. With more training, the users will be confident on their abilities to manage ERP, take ownership & become valuable contributors to the ERP project success.
    69. 69. Some proactive organizations first bring in a business process consultant, to assess the current practices & make recommendations for ways to ease into the changes, before starting off the ERP project initiative.</li></ul>11<br />
    70. 70. BUSINESS PROCESS RE-ENGINEERING (BPR)<br /><ul><li>BPR implies changes in the way of doing business as well as on the organization’s structure & culture. Organizations implementing ERP chose their own BPR approach based on their constraints & needs. Project team members & managers must identify the core business processes in order to prioritize the BPR approach.
    71. 71. Today, ERPs are granular, so we can immediately implement the critical business functionality to meet the most pressing needs, and then address the other less critical needs (wish list) in priority order.
    72. 72. This approach would give more time to master the ERP & can reduce the information overload, which overwhelm the users, when forced to learn new processes & flows of the ERP.
    73. 73. Starting the implementation of the core functionality necessary to replace what was provided by existing systems. Once the organization is comfortable in this new environ, the additional functionalities for process improvements & new business capabilities can be implemented.
    74. 74. Focus on business processes & requirements is key than looking at the technical capabilities of a particular ERP. Once these needs are defined, we can choose the ERP that fits the unique business needs & implement it in a way that require less (if not, nil) customization.</li></ul>12<br />
    75. 75. BUSINESS PROCESS RE-ENGINEERING<br /><ul><li>Organizations have the following three BPR options to consider, while implementing the ERP
    76. 76. Implement ERP AS-IS without business process reengineering
    77. 77. Re-engineer business processes before implementing ERP and customize ERP completely to conform to the re-engineered business process
    78. 78. Re-engineer business processes before implementing ERP & implement ERP with minimal customization to conform to the re-engineered business process but without losing the best practices suggested by the ERP
    79. 79. Main issues of measuring BPR include:
    80. 80. Which business processes must change; Who collects the BPR metrics
    81. 81. Which ERP processes must change;
    82. 82. Analyse when BPR monitoring must be done; Organizational / business implications of BPR</li></ul>13<br />
    83. 83. BUSINESS PROCESS RE-ENGINEERING<br /><ul><li>BPR limitations are:
    84. 84. Delay the project time period; Require additional effort from employees
    85. 85. Sometimes focus more on the technology view than business
    86. 86. BPR Benefits are:
    87. 87. Help as a diagnostic technique to permit the revision of BPR plan to meet the ERP project goals
    88. 88. Align Organization business process & ERP
    89. 89. Affect decision making particularly as it can help decide between alternative BPR methods
    90. 90. Instigate business process & task improvement
    91. 91. Decide who should participate in the BPR plan
    92. 92. Design of various business processes across organization</li></ul>14<br />
    93. 93. THANK YOU! <br />15<br />

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