ERP Implementation Strategy

ERP will be the organization’s information backbone and will reach all areas of business and value chain. When ERP is discussed today, it is rarely in the context of planning how resources are to be expended. Rather, it refers to an enterprise view of the business — in other words, a view of a company and all its parts as connected whole, rather than small silos of activity. It is important to ensure that selected solution and not the product are best suited to support the business requirement.

The ERP should have the ability to support critical business issues & concerns and should grow with their business plans. The selected solution should also be able to support the current and future requirement including expansion & diversifications, new units at different physical locations and should be in line with the management’s vision of making the group a world class company.

ERP implementation is equally complex. However, when properly managed and executed, it can be highly successful. The implementation road map is the knowledge-based plan that sets the course. It is a carefully constructed and tested map & will be jointly developed by the company & ERP implementation Partner. It focuses on achieving the goals identified earlier and will need to migrate to newer technologies being offered. It also links process redesign with the implementation of ERP to ensure that a High Return on Investment (ROI) is achieved. The cornerstone of this effort is finding the right partner and specialist

WHAT ONE NEED TO KNOW

Ø ERP is a Business Project and not an IT exercise.
Ø ERP is more than a project, it’s a lifestyle.
Ø ERP implementation is inherently complex
Ø ERP is about people, not just technology
Ø ERP system will be the information backbone for the next 10 years and will reach all areas of business and value chain.
Ø Organization’s long-term business strategy will form the basis of the criteria for the selection of an ERP system.
Ø Select an ERP that is proven – it works and adds value – while supporting organization’s business growth, new operating methods, market expansion and strategies of future.
Ø The cornerstone of this effort is finding the right partner and specialist.
Ø They should be a part of organizations’s vision and should have the necessary Business / Domain knowledge.
Ø When selecting an ERP implementer, it is essential to measure the capability of the implementer to correctly size their application products and ensure acceptable performance for their end users throughout their life cycle.
Ø The ERP implementer should have the ability to support organization’s critical business issues & concerns and should grow with business.
Ø They should have faced these challenges in similar business environment many times earlier and learned from experience on how to help organization adopt new technologies.

ERP Implementation Strategy – Part II

This is the 2nd in a three part series of ERP Implemetation Strategy

ERP Implementation

ERP implementation is complex like any other ERP. However, when properly managed and executed, it can be highly successful. The implementation road map is the knowledge-based plan that sets the course. It is carefully constructed and tested map & is jointly developed by the organization & ERP Implementation Partner. It will focus on achieving the goals identified earlier and will need to migrate to newer technologies being offered by ERP.

By addressing the following critical success factors for implementations the organization can successfully mitigate some of the risks.

Critical Success Factors For ERP Implementation
1. Executive Management Commitment
One should not lose sight of the fact that ERP will fundamentally affect the way they operate. The success or failure of any ERP implementation is directly related to the level of involvement & commitment of the Steering Committee to the project.

Top management support must be obtained, sustained and visible throughout the life of the project. Involve senior management in project sponsorship, project steering committees, quality reviews, change management and conflict resolution. Involvement in these governance mechanisms helps sustain management support by keeping them informed of the project's progress.

2. Change & Conflict Management
ERP will bring with it substantial business process and organizational changes. Change & Conflict management skills are paramount for the success of any ERP project, and a robust change management program should be instituted by the organization at the project's outset. This will require earlier management and employee participation in the implementation process and investments in training programs.

Change & Conflict management skills are not normally found within traditional IT departments and may also not exist within. The organization should create its own change management team by sourcing external expert independently. Ongoing communication — through such mechanisms as project Web sites, newsletters etc, regarding the project's direction, changes, progress, accomplishments and benefits — is vital to a project's success.

3. Role-Based Separation of Duties

Today's best-practice model is to use role-based access control (RBAC), an operational
model for the implementation of privileges in a complex environment. Instead of determining exactly which privileges are needed by each and every individual, and adjusting those privileges as circumstances and job responsibilities change, privilege and access levels are assigned to specifically named roles, and then specific users are associated with specific roles, or areas of responsibility. Roles must be carefully implemented such that no role has excessive privileges. Furthermore, because individuals are normally given the use of multiple roles, the sum total of privileges across all of an individual's roles must be evaluated to ensure that proper duty separation was not inadvertently lost.

4. Training & Manpower Development
ERP is more than a project it's a life style. It is about people, and not just technology. Organizations that ignore the people side run a significant risk of project failure. The organization should not concentrate only on the technological aspects of ERP and ignore the "softer" components of implementation – the Human Aspect.

Don’t let your knowledge walk out of the door at the end of implementation. If your primary expertise of ERP comes from the implementation partner, you may be putting yourself at risk. Implementation is just the beginning. Make sure that your IT team, ERP team & users are properly & adequately trained to support & maintain the application after implementation partner leave.

Training & Education are the critical success factor for successful ERP implementations. When implementation fails, the cause is commonly one of the two. Either the implementation partner didn’t do what it was supposed to or the organization didn’t invest enough time & money in training its employees.

One-Size-All solution doesn’t work. The training needs of executives, managers, IT staff, users and implementation team members will be different. Depending on the organizational structure, training & education is generally the responsibility of the Human Resources Department. Steering Committee, ERP development team & IT department must help & provide support to Human Resources Department in ensuring that the organization is well trained & ready for ERP. If internal expertise is not available get an expert with experience.


ERP Implementation Strategy – Part III

This is the last of a three part series of ERP Implemetation Strategy
5. Program Management
Building a strong project team should be a priority, because it is a major differentiator between success and failure. Internal project members with deep business knowledge should be assigned to the project team on a full time basis for the life of the project and should work closely with the implementation partners. Their positions should be backfilled while they are "seconded" onto the project. This individual should be retained for the life of the project and should work in closely with the implementation partner's project manager.

A team-orientated approach is important. Most enterprises cite the need for empowered implementation teams that can make final decisions regarding such issues as configuration and process change without consultation.

6. Prioritization & Categorization of ROI
It is essential to align the organization to ensure that the business benefits from the new technology are realized There are three categories of ROI for organizations undertaking ERP implementation.

Ø Process Based – Independent of ERP
Ø Enhanced by ERP
Ø ERP-Enabled

7. Audit & Health Check
Regular project Audit & Health check ensures the implementation quality, scope & the project schedule
8. Corporate IT Policy
There has been substantial growth in the use of computers in companies over the years. With the increased use of computers, Intranet and Internet, the quantum of risk and financial loss from possible security breaches is growing because of the huge reliance of the business and information flow on computer systems and IT network. Given the above, security of information on IT systems becomes an area of concern for the organization.

Any Information security framework should address the following three aspects of Information Security:
Ø Confidentiality – Protecting sensitive information from unauthorized disclosure or interception Ø Availability – Ensuring that information and vital services are available to users when required
Ø Integrity - Safeguarding the completeness and accuracy of information and systems

9. Business Continuity Planning / Disaster Management
IT systems are vulnerable to a variety of disruptions, ranging from mild (e.g., short-term power outage, disk drive failure) to severe (e.g., equipment destruction, fire) from a variety of sources such as natural disasters to terrorists actions. While much vulnerability may be minimized or eliminated through technical, management, or operational solutions as part of the organization’s risk management effort, it is virtually impossible to completely eliminate all risks. In many cases, critical resources may reside outside the organization’s control (such as electric power or telecommunications), and the organization may be unable to ensure their availability. Thus effective Business Continuity Planning & Disaster Management, execution, and testing are essential to mitigate the risk of system and service unavailability. Accordingly, in order for contingency planning to be successful the following must be considered:
Ø Impact to the business of not having the system available
Ø How long the business activity can be productive under an alternative process
Ø The business costs of going to the alternative process
Ø Effort to restore the application to a current level of information
Ø Business Continuity Plan (BCP)

10. Post Implementation Help Desk

Help Desk is a critical center that needs to be in place to support users. Post Go live, there might be a variety of questions / doubts / problems which the users might face and unless there is a streamlined process in place to support the users, the implementation might come to a standstill. Plan this well in advance before going live.

Dushyant S. Lall
Chairman & CEO, DD& G Associates
Advisor - AAKIT Technologies Pvt Ltd