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Submitted to: Submitted by: Yaseen Bakht Yar Abdual Samad Iftikhar

Prof Numan Akbhar

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YASEEN BAKHT YAR

ABDUAL SAMAD IFTIKHAR

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Table of Content
Content Page #
Abstract ................................................................................................................................. 4 Introduction........................................................................................................................... 4 Stages of Midsized ERP Implementation................................................................................. 6 1. Pre implementation.................................................................................................... 6 a) b) c) d) e) f) g) h) i) j) k) An ERP solution required of Not?........................................................................... 6 Scope of work........................................................................................................ 6 Steering committee............................................................................................... 6 Preparedness......................................................................................................... 7 Pre evaluation....................................................................................................... 7 Project planning..................................................................................................... 9 Process Refinement (AS-IS, TO-BE) ........................................................................ 9 Implementation team............................................................................................ 9 Employee Buy-In.................................................................................................... 9 Interfaces for third party integration................................................................... 10 BPM..................................................................................................................... 10

2. During Implementation............................................................................................. 11 a) b) c) d) e) f) Data Collection................................................................................................... 11 Documentation with Configuration...................................................................... 12 Support team....................................................................................................... 12 Quality Team....................................................................................................... 12 End User Training................................................................................................. 12 Go Live................................................................................................................. 13

3. Post Implementation................................................................................................. 14 a) b) c) d) Change Management........................................................................................... 14 Support................................................................................................................ 14 Human Resource Retention................................................................................. 14 Competency Center............................................................................................. 14

Advantages........................................................................................................................... 15 Disadvantages...................................................................................................................... 15 Conclusion............................................................................................................................ 15

YASEEN BAKHT YAR ABDUAL SAMAD IFTIKHAR

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YASEEN BAKHT YAR

ABDUAL SAMAD IFTIKHAR

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Midsized Erp Implementation Life cycle

Abstract
ERP implementations in the South Asian countries, are comparatively different, harder and financially very expensive than the other parts of the worlds. This is because of different socio-economic conditions, working style of businesses, their operation methods and low currency comparative to international currencies. Most of the well renowned ERP solutions and their licenses are in foreign currencies such as Dollar, Pound or Sterling. When, a third world country would like to implement an ERP solution, investment becomes many folds due to the currency difference. But, the post implementation cost is lesser than the international market due to the cheaper labor cost. With the growing market of mobile operators in Pakistan, PTCL as a landline operator needs the cutting edge technology as its products and operations. Though, the ERP implementation has high cost but without it, gap between expenses and revenue could not be widened: profit only comes with less cost and high revenue. Making a decision for the ERP implementation is a huge and tough task for the management. But, the tougher is its proper implementation and post implementation monitoring and maintenance.

Introduction
A proper ERP solution has become a vital need of this era for the enterprises due to the market globalization and day by day growing competition. For the very fact, the ERP solution has become mandatory for an enterprise to run the business in an effective and efficient way. But, before going for the implementation of an ERP solution, an enterprise has gone through immense hard-hitting times: choosing the right solution, planning, selection of implementation team and managing the change. Whether it is an ERP implementation or reimplementation, it should be well thought as its life spreads over many years. Despite of the many reasons, the biggest challenges are choosing the right solution with the right vendor and its effective implementation according to the requirements of the business. Generally, the ERP is considered as the back bone of an organization. In fact, in 42% of the cases when new business applications are under consideration, the ERP is the default decision without even looking anywhere else. Rapid changes in businesses have thrown away the idea of bespoke and fusion solutions. The biggest fear of a midsized enterprise for the ERP implementation is the failure rate.

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There are three basic stages for Midsized ERP implementation: Pre-implementation During implementation Post implementation. All ERP implementation stages are equally difficult and full of challenges. Any loose brick can bring the whole implementation down. To keep up with the growing customer demands and fast changes in business trends, the enterprise must have the flexibility and agility to change quickly. And this could only be possible if the ERP solution is implemented successfully: aligned with the business requirements along with the seamless information flow between the modules and across departments. In this space age, everything is sought with extreme sense of urgency and there is no room for duplication of data inputs and serial processing.

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Stages of Midsized ERP Implementation:

1. Pre Implementation:
i) An ERP Solution Required or Not? Before the ERP implementation, the first question is to whether the organization does require new ERP solution or not? And, the answer does not come easy. It needs an immense amount of work to come up with final facts and figures. Writing the ERP Initial Documentation needs combination of the business experience and in depth knowledge of the ERP implementations. Once facts and figures appear on the paper, budget approval from the Board of Directors along with a convincing presentation is another hard part for the management. Without proper approved budget, the implementation is just a dream with no wings . ii) Scope of Work Scope of work should be clear with achievable objectives. A normal ERP implementation has the following modules: Finance & Accounting, Material Management and Human Capital Management. Though, organizational scope can be more or less than the above mentioned. Almost all ERP Solutions offer individual modules or combination of more than one as per clients requirements. The organization can opt for the modular scope. Even from some solutions, the organization may select desired sub modules and leave the rest. Many ERP installations failed due to undefined scope of work and project goals. iii) Steering Committee A midsized ERP implementation cannot be successful without the support from the highest management. For the very reason, the steering committee should be formed with C level management members. Few members from the board of directors in the committee may also be helpful for the easy release of the budget whenever required. The steering committee enables the project management team with proper mandate and to overrule the red tape issues which can be the bottlenecks for the ERP implementation. Not only the steering committee pushes the business towards the ERP implementation, but also it is evaluating the implementation team and its progress towards the end. While forming a steering committee, the CEO of the organization must realizes that it should be of apt size with the best suited members. Sometimes, a huge sized steering committee cannot make decisions due to diverse members.

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L1F09BSCS0068 iv) Preparedness

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Midsized ERP implementations success depends upon the preparedness before the implementation. The business requirements and business rules should be properly documented and signed off from stake holders and senior potential users. The implementation with inadequate documentation is an open invitation to failure. The legacy systems plus and minus points should also be documented so that the plus can be a part of implementation and the minus points can be avoided. Also record and document legacy application users comments as they are the actual users and they might give inside of the application to be required. Processes should be identified and they should be intact. Identify the pain points and touch points. Most of the time, the feedback from the actual users gets ignored with a thought that the ERP application is only for the use of management but actually it is for everyone in an organization.

v) Pre Evaluation After the budget approval, next is to select the suitable ERP Solution. Almost all ERP systems available are good at some things, yet not so good at other. Selecting and implementing the most appropriate software package to support a companys business processes is itself considered a best practice. With the internet and fast intelligent search engines an enterprise can browse through hundreds and thousands of the web sites for best suited ERP Solutions and vendor profiles. Every ERP solution provider is claiming that they are the best ERP solution providers. According to Boston-based AMR research about vendors, they will try their best to dazzle you with spectacular product demo and enticing promises of a smooth sailing deployment. ERP solutions have been reduced to top five: SAP AG, Oracle E-Business, J D Edwards, People Soft and Baan. According to some, it is just among two big giants: SAP and Oracle E-Business Suite. Even, the major competition is between two big giants, it is a cumbersome activity for an enterprise to choose the right Solution. ERP solutions are so expensive that one wrong decision not only makes the implementation project a failure but sometimes also destroys the business itself. Ratio of ERP implementations success is much lower than failure. In most of the cases, enterprises take one to two years just to decide the apt solution according to their requirements. An Organization should not believe on Vendors provided evidences and implementation references. The Organization should also dig out figures and facts of the particular ERP solution at their own. And, should contact the references provided by the vendor to find out the exact problems they have faced and are facing with this solution. All organizations are different even if they are in the same business. Requirements and business processes are always different and so is the ERP implementation and solution. Though, the best practices might be followed to gain the best out of an ERP implementation. Along with the ERP solution, an organization should evaluate the business partners who are implementing the solution in your region. May be during the evaluation you find out that though the solution is excellent but the business partners of vendor have bad repute, financially unsound or are have inept resources for implementation. These really matter during the implementation.

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L1F09BSCS0068 Following should be considered while selecting an ERP selection: a) b) c) d) e) f) g) h) i) j) k) Ease Of Use Cost Customization Efficiency Accuracy Comprehensive & Flexible Standard Reports Integration. Multi Currency Business Intelligence Support Security

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Other considerations Most of the organizations fell into the traps of vendors and consultants. It is a marketing gimmick of vendors and consultants to come up with highly colored presentation with lots of good references of big brands. Organizations should not completely rely on vendors or consultants but they should check the actual truth by contacting the references provided by vendors or consultants. This will not only make their decision more practical but also would help them to negotiate prices with them. Following should be evaluated against the ERP solution: Age in market (number of years). Stability in market. Average Human Resources required for each module. Average cost of Human Resources required for operations, development and its support. How easy to find resources: human and other. Number of platforms it can support: Unix, Linux , Windows etc Cost of Infrastructure required and how easy to get that in market. Frequency of new releases and how easy to upgrade it? Frequency of bug fixing patches.

Following should be evaluated against the vendor and consultant: Their Financial Strength Number of clientele Number of satisfied clients Proposal submitted by vendor should be reviewed legally and technically. They should offer transfer of technology (Knowledge transfer) They should not sublet contract to other companies. They should have their own seasoned professionals for all modules. ABDUAL SAMAD IFTIKHAR

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i)

Project Planning Once the ERP solution is selected, project planning is the major task to be performed between implementers and the organization. Project plan is the track of activities with date stamps, resource allocation from both the sides along with risks and dependencies. If project plan is followed with right pace, it gets the organization success in the implementation and open unlimited business opportunities. Project plan should have activities according to priorities. Risk should be covered in the project planning and steps should be taken to avoid risks and improvement of risks.

ii) Process Refinement (AS-IS, TO-BE) Documenting the AS-IS Business processes is the crucial activity of the process identification and its refinement. This could be achieved by conducting different sessions with the business stakeholders. The best approach is to select the teams from each domain. Once draft version of AS-IS documents are ready, the second should be arranging the workshop to further clarify the AS-IS processes with the stakeholders. After proper sign off from stake holders, conduct other workshops to document the TO-BE processes. To-Be processes should be evaluated with the help of technical staff before proper sign off from the stake holders. Once the To-Be processes are signed off, processes will be handed over to consultants / technical team for further action. Focus on your business strategy and not just software selection and implementation. To-Be processes should be well thought out to cover the requirements of the business for next ten years. To understand the changes of next ten years, rate of change should be doubled or multiplied with the ratio of changes during last ten years. As ERP solutions grows with the company and its future strategies iii) Implementation Team Selecting or hiring the professional implementation team with appropriate skills and experience is a must have. Team should be combination of technical and functional members. Skills that are critical to the implementation include project management, process improvement, requirements definition, data conversion, testing, separation of duties analysis, and post go live analysis. Proper trainings should be conducted for implementation teams iv) Employees Buy-in. Without employees buy-in, successful implementation is close to impossible. If management decide to go for the ERP implementation without buy-in from its employees, issue starts popping up from day one till the day of the final failure.ERP implementation is for the whole enterprise and not only for the management and thats why it is termed as ERP and not Management Planning.

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v) Interfaces for third party integration It should also be considered that ERP solution must provide easy to implement integration interfaces for third party applications. Most of the off shelf ERP solutions provide XML or web service interfaces. ERP solutions that do not provide integration interface costs lot of time, resources and money to develop interface every time organization would like to share the data with ERP Solution.

vi) BPM If ERP Solution supports Business Process Management it will be an additional edge on other ERP solutions as it enables employees to effectively manage the processes with dynamic approach: designing, configuring, executing, monitoring, and analyzing.

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2. During Implementation:
Once it has been decided that which ERP solution to implement, implementation has begun with all it challenges and activities. During implementation if proper monitoring and execution plan has not been taken on, it could take the implementation towards the failure without noticeable to the management. During implementation, the biggest factor is time. As loosing the time will impact budget and without budget implementation wont be possible.

a) Data Collection First the most difficult of all is to collect the data. To avoid Garbage in garbage out, Data collection team of experienced members should be formed. And, in the implementation plan activities of data collection with proper time lines should be mentioned. The vital part of data collection is to design the data collection templates. Data collection template should be well thought of. Following should be considered while designing the data collection templates:

Convert data. Collect new data. Review all data input. Clean-up data.

Convert data: You cant assume 100% of the data can be converted as there may be outdated information in the system. Determine which information should be converted through an analysis of current data. Collect new data: Define the new data that needs to be collected. Identify the source documents of the data. Create spreadsheets to collect and segment the data into logical tables (Most ERP systems will have a utility to upload data from a spreadsheet to their database). Review all data input: After the converted and manually collected data is entered into the ERP database, then it must be reviewed for accuracy and completeness. Data drives the business, so it is very important that the data is accurate. Data clean-up: Review and weed out unneeded information such as customers who havent purchased in a while or are no longer in business. Now is the time for improving data accuracy and reestablishing contact with inactive customers.

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b) Documentation with Configuration The prime focus of implementation and Project Management office is on configuration, testing, and deploying the ERP solution in the best possible manner. However, the importance of proper documentation and it configuration is placed aside. But, it is proved that lack of documentation cost more in implementation than maintaining proper documentation.

c) Support Team No matter how much trainings are conducted during the implementation, end users always need support to use the new implemented solution. Synchronously when the configuration is taking place, the implementation team is being trained. This is the phase where the company trains its employees to implement and later, run the system. For the company to be selfsufficient in running the ERP system, it should have a good in-house team that can handle the various solutions. Thus the company must realize the importance of this phase and selects right employees with good attitude d) Quality Team This is the point where you are testing real case scenarios. The test cases must be designed to specifically to find the weak links in the system and these bugs should be fixed before going live. There should be proper quality testing and assurance teams. Quality begins with the initiation of the implementation. To reduce the cost of implementation, some organizations ignore the formation of dedicated teams for quality testing and quality assurance. But, after implementation low quality cost the organization many folds then investing the money on quality during implementation. Despite other quality assurances, the most important for quality team is to keep check on the unnecessary development of reports.

e) End User Training

You can have the best technology in the world, but if you dont have a community who wants to use it and who are excited about it, then it has no purpose. Chris Hughes CoFounder of FaceBook. Then each group is given training on the new system. This training is very useful as the success of the ERP system is in the hands of end-users. The end-user training is much more important and much more difficult than implementation team training since people are always reluctant to change.

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L1F09BSCS0068 f) Go Live

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This is the phase where all technicalities are over, and the system is officially declared operational. In this phase all data conversion must have been done, and databases are up and running; and the prototype is fully configured and tested. The implementation team must have tested and run the system successfully for some time. Once the system is live the old system is removed and the new system is used for doing business. Final Go Live Countdown Checklist Sample

Physical inventory process is complete. Beginning balance entry procedures are developed for all modules. Any transition issues are addressed. Documents & modifications are tested thoroughly. Executives and departments heads are fully trained. Vendor is available for go-live day.
Users will have assistance during their first live transactions.

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3. Post Implementation:
After implementation, organizations celebrate the GO-LIVE, they forget about the fact that post implementation is as important as implementation. No matter how successful is the implementation, if not used or maintained properly it causes more harm to the organization then the implementation itself? a) Change Management People do not accept change easily. The biggest post implementation problem is the resistance to the change. Organizations which do not form a strategy for change management could not get the benefits from the ERP solution. Cultural change and insecurities are the biggest threats. b) Support ERP implementation is the outcome for huge financial investment and exhaustive hard work of teams. Organizations do not realize that ongoing support of ERP solution is the major part of the total ERP cost.

c) Human Resource Retention HR retention is the most difficult of all after post implementation. Internal staff not only gained the technical expertise but also in depth business knowledge which enabled them to get highly paid job very easily in the market. To retain the HR, different strategies can be adopted: incentives, salary increase and clarity to their future growth. d) Competency Center Formation of competency center will enable the teams for continuous improvements through extensive training for competency of staff and end users. Competency center will reduce the cost of after implementation support from third party

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Advantages
Visibility across the company figures saves time, resources and money. With one centralized database and integrated modules, fast and accurate information helps the management to make decisions and act quickly on decisions. Easy and automated fore casting, reduces the stock keeping and investment. Enhanced empowerment of employees through increased information sharing, Real time processing enables the organization for fast business moves, Reduces operations, paper environment, pain points and bottlenecks. Optimized processes and cycles which reduce resources and cost factors.

Disadvantages
Every picture has two sides and so does the ERP implementation. With flowers come thorns: disadvantages: huge investment on ERP implementation and its maintenance, too much reliability on the system and limitation ERP solution brings with it as inheritance. Some limitations of off shelf ERP solutions, also limit the business to grow in a particular direction.

Conclusions
ERP implementation is different from conventional IT Software Projects.ERP implementation involves process reengineering and optimization. It brings a new culture and a fresh breath to an organization if implemented in the right way. It takes an average of two and a half years from project initiation to achieve a quantifiable return on investment for an ERP system. Ninety percent of those quantified benefits are the result of a cost reduction, according to the study [6]. ERP implementation if would have been done with proper planning and long thought out process brings its benefits. But, if planning or processes are not in place, it would be a disaster for the organization. Studies showed that ERP implementation could only be possible if well planned along with organizations well placed processes.

Refrrences:
http://www.slideshare.net/sawanlaladiya/erp-implementation-life-cycle-10316390 http://www.ramco.com/blog/erp-implementation-life-cycle http://www.erppandit.com/erp-implementation-lifecycle.html http://www.baesis.com/Portals/52892/docs/11%20steps%20to%20successful%20erp%20implementati on.pdf http://blog.sageerpsolutions.com/nine-steps-to-erp-implementation-success/ http://www.datacorinc.com/articles/news/erp.pdf

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