erp implementation cycle
DESCRIPTION
ERP Implementation Lifecycle, by Rajesh KannaTRANSCRIPT
To Discuss
• Enterprise Resource Planning System
• ERP Implementation Life Cycle
– Methodology
– Critical Success Factor
– Critical Failure Factor
– Challenges
• ERP Case Study – Experience Sharing
• Discussions
A
R
E
V
I
S
I
T
Evolution of ERPInventory
Purchasing
MRP
MRP II
ERP
Internal
ERP/SCM
Production
Scheduling
Finance
Labour
All Internal
Resources
Internal
Customers &
Suppliers
MRP
MRP II
ERP
Internal SCM
Extended
SCM
External
Customers &
Suppliers
1960
2000
1980
1990
1970
TIME
2010
?
ERP is the integrated IT platform for the business
Business Processes
Traditional Approach is Function Specific like
Sales – Dispatch - Purchase – Stores – Production - Accounts
Modern Approach is based on Business Process - interlinking Departments
• Order To Cash
• Indent to Pay
• Production - Planning to Execution to Warehouse
• Maintenance – Planning to Execution
• Customer / Supplier Relationship Management
• Products – Concept – Design & Development to Market
• Human Capital – Hire to Retire
• Fixed Asset – Life Cycle
• Accounting Cycle
Business Processes in ERP
ERP System
Revenue
Cycle
Production
Cycle
Expenditure
Cycle
Accounting
Cycle
Quality Cycle Maintenance
Cycle
Customer Enquiry – Order
Booking – Dispatch –
Invoice -
Indents – Procurement –
Invoice Processing
Receive Indents / Plans –
Issue Materials
Sales Forecast – Confirmed
Order – FG Shipping
Implementing ERP System –
Project Management
� Methodology
� Challenges
� Critical Success Factor
� Critical Failure Factor
Implementing ERP System
� Methodology
� What is ..?
� Why it is required..?
� Benefits..?
• Project Management Methodology • To provide a standard management approach and guidelines to ensure
that projects are developed in a disciplined, well-managed, andconsistent manner that promotes the delivery of quality products andresults in projects that are completed on schedule and within budget.
Fundamentals
• What is a Project ? • A project is a temporary endeavor undertaken to create a unique
product or service.
• What is Project Management ? • Project Management is the application of knowledge, skills, tools and
techniques to project activities in order to meet or exceed stakeholderneeds and expectations.
• Success Criteria for a Project? • Does the implemented system/product meet the defined business goals
and objectives..?• Does the project meet the documented requirement specifications..?• Was it completed on time and within the approved budget..?
Life Cycle
1. Definition
2. Requirements
3. Analysis
4. Design
5. Development
6. Testing
7. Implementation
Process
1. Initiate
2. Plan
3. Execute
4. Control
5. Closure
Knowledge
1. Integration
2. Scope
3. Time
4. Cost
5. Quality
6. Human Resource
7. Communication
8. Risk
9. Procurement
Dimensions of Project Management
Source
Extended Implementation
Diagnostic
Analysis
Design
Pre-Implementation
ImplementationDevelopment
Deployment
Post-ImplementationSupport
ITARA’s Implementation Methodology
Pre-Implementation
Project Plan
Project Organization
Kick-Off Meeting
System Study
SDD Sign-Off
• Project
Preparation
• Preliminary
Discussions
• Project Team
Formation
• Fixing Roles and
Responsibility
• Conduct Kick-
Off Meeting
• Conduct Process
and System
Study
• Solution Design
Document
Preparation
• Discussion
• Sign-Off
Implementation
Infrastructure
Master Data
Modules
Configuration
CRP
Go-Live
• Setting Up
Servers,
Connectivity
etc
Training
Data
Migration• Master Data
Collection –
Scanning -
Upload
• Start
Configuring
Modules and
SDD Processes
• Conduct CRP
• Course Corrections
• Conduct Module
Testing and User
Acceptance Testing
• Conduct User
Training and
Evaluate
Training Feed
Back
• Perform Data
Migration
Activities
• Ensure Go Live
Day-1 Reports
Post Implementation
Help Desk
Post Live Issues
Warranty Support
Completion• Establish Help
Desk Function
• Appoint CRM
Support Team
• Log Post Live
Issues
• Review and
Resolve Issues
• Provide
Support till
Warranty
expires
• Confirm
Project
Completion
• Sign-Off
Deliverables
• MoM - Kick-Off Meeting
• Project Plan
• Master Data Template
• Solution Design Documents for
• High Level and Business Processes wise
• Module Deliveries
• Day One Reports
• MIS Reports
• As agreed in Solution Design Document
• Closure of Issue Logs
Implementing ERP System
� Challenges� Risks
� Communication
� Alignment – Board Room to Stock Room
� Change Management
� Resistance to Adoption
� Knowledge Gaps – User / Consultant
� User doesn’t know what he wants & Consultant doesn't know how to give -
� Infrastructure
� Getting Sign-Off
� Expectation and Delivery Gap
� ….
Implementing ERP System - CSF
• Leadership commitment
• Communication
• Professional project management
• Phased implementation approach
• Scope management
• Business transformation and change
management
• Removal of cross functional barriers
• Job-specific end-user training
• Members from Board Room to Stock
Room know their roles and
responsibilities.
• Focused issue resolution
• Post implementation support
Implementing ERP System - CFF
• ERP System Misfit
• High Turnover Rate of Project Team
• Over-Reliance of Heavy Customization
• Poor Consultant Effectiveness
• Poor IT Infrastructure
• Poor Knowledge Transfer
• Poor Project Management Effectiveness
• Poor Quality of Business Process Re-Engineering
• Poor Quality of Testing
• Poor Top Management Support
• Too Tight Project Schedule
• Unclear Concept of the Nature and Use of ERP System – from user’s point
• User Resistance to Change
An Experience Sharing
Client Environment
• Trident Pneumatics is one of the leading industry in manufacturing
critical compressed air solutions.
• They are largest exporters of compressed air treatment products in India.
• Human capital size in the company is around 100.
• The company was using a Indian accounting software to manage their
accounts and were evaluating many ERP applications to consolidate the
data & process integrity between the departments.
• The company also has tried with 3 ERP Implementation in earlier times.
Business Need
• Trident Pneumatics planned to go for ERP Implementation and the
management was in a favour of implementing a proven Open Source ERP
Application. There fore ITARA suggested OpenERP as recommended
Solution. Trident has the following business needs to be sorted out in ERP.
• Required to Streamline and automate the interlinked business processes and
to get real-time and accurate MIS by implementing OpenERP System
• Required to maintain complete and accurate master data (Customer, Vendor,
Price Lists, Products,BOMs, Work Center etc)
• Required to have Better Inventory Management
• Expectation to have Optimized Production Planning and Control
• Need to maintain SOD and Data Access Controls at all levels of User Group
• Need to tightly integrate “Order to Cash” , “Procure to Pay “ , “Production
Planning to Execution “ processes
• Need to monitor Real Time Financial MIS, Payables and Receivables etc.
• The company was using a Indian accounting software to manage their
accounts and were evaluating many ERP applications to consolidate the data
& process integrity between the departments.
The Implementation• About project
– Goal: Role out Single ERP
application to service the global
customers.
– Retire the legacy Application.
– Users CTQ’s to be met
• Methodology
– Water Fall
• Users
– 15 Business Users
– 15 Project Users - R&D
– 10 CRM Users
• Location
– Multiple location - HQ in
Coimbatore
– User across India
� Team
◦ Steering Committee - Trident
◦ Core Team - Trident
◦ Application User Team - Trident
◦ Functional Team - ITARA
◦ Project Leader
◦ Functional Consultants
◦ OpenERP Developer
◦ Tiny ERP Support
� Time line
◦ 4 Months (P) / 6 Months (A)
� Support
◦ Off-Site / Remote Login
OpenERP Solutions
ITARA started the ERP Implementation with APA Gap Analysis to
find the Pain Areas and Opportunity for process improvements.
Implementation is as below
• Product: OpenERP 5.0.14
• Sector: Discrete Manufacturing
• Modules Implemented
• Sales Management
• Service & Support
• Purchase Management
• Warehouse Management
• Manufacturing
• Project Management
• HR Management
• Accounting
Few of Key Solutions.. Delivered
• MRP runs at scheduled time every day to generate Purchase Orders and Manufacturing Orders
• Sub-Contracting Management
• Credit Limit Control – Will not process Sales Order if exceeds Credit Limit
• Built in eMail Solution for Sales Order Confirmation to Customers and Purchase Orders to Vendors
• Functionality of Item where used in BOM
• Purchase Order – Scheduled Delivery Dates – defined as required by the business
• Inventory Planning & Stock Levels Monitoring @ real time
• Management of Sales & Purchase Price Lists (more than 20 as required by business)
• Item Ageing with Qty and Value – Helps to track Non-Moving Items
• Status of Sale Orders @ each stage of order processing till invoice payments
• After Sales – Customer Service Tracking
Few of Key Solutions.. Delivered
• Multi Currency in Invoice
• Indian Tax Structures (Excise, VAT, CST, ST with combinations) and related reports
• ‘C’ Form Functionalities
• Customer Ageing with Ledger Reports
• Customer based Tax Structure
• General Ledgers as required by business
• Cheque Printing
• Product Master Data with Labeling & Product Categorization and Monitoring
• Monitoring New Product development and R&D through Project Management with Cost
Monitoring
• Cost Center defined as business required with receivables monitoring.
The Challenges Faced
• Scope Finalization
• Co-ordination with multiple teams (Functional Areas)
• Meeting CTQs
• New technology introduction – Open Source
• Co-ordination with multiple projects
• Change management
• Testing
• User acceptanceBottom Line
• Project Went Live by 2 Months Time Gap
• 245 Requirements delivered
• 80% of CTQs Met
• No Parallel Entry / Entry in 2 Systems
• Successfully Closed the FY 2010-11 in OpenERP
• Trident - migrated to OpenERP 6.0.3 – Feb 2012
Discussions..?
Thanks