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DEVELOPMENT LIFE CYCLE

1 ŞUB 2017 / RUKİYE BAYRAM

Jackson Laboratory is

nonprofit,

independent

world –reowned

Genetic research institue faunded in 1929.

Located in Bar Harbor,

Budget $80 million,

1200 employee.

Jackson Laboratory decided to install an ERP system with $5 million budget

and a 1 year time frame.

Despite the installation challenges, the project’s actual cost was close to the
budget and took only about 6 months longer than expected.

Major installation challenge was the integration of its unique mouse-development

functions into Oracle’s ERP system.

. One of the problems faced by Jackson stemmed from an internal HR issue (i.e.,
the risk that the action or inaction of the software provider would hinder the
implementation)

modifying the ERP system to accommodate its business process, placing special
emphasis on training, seeking a fixed-fee contract with Oracle and purchasing a
surety bond to reduce project risk.

Jackson Lab selected an integrated ERP suite from Oracle rather than a best-
of-breed option.

The Oracle applications suite included modules for process manufacturing,

accounting, e-procurement, and HR, among others. Their biggest challenge
was modification of the Oracle Process Manufacturing (OPM) module to
accommodate the lab’s unique business processes of raising and distributing
mice.

The implementation team chose a phased implementation approach instead of a

big-bang approach.

The first phase initially went live in February, including the management of
production capacity, accounts receivable, some general ledger functions, and the
purchasing of manufacturing material; in April they launched other modules
including accounting for research grants, the rest of general-ledger functions,
accounts payable, and fixed assets.

For the second phase, which began in June, the remaining modules including
process management, human resources, payroll, labor distribution, and a grant
filing application were installed

Jackson faced personnel problems during ERP installation when the best and
brightest employees were involved in the implementation process leaving
them short-handed to do the everyday work. In addition, Jackson’s IT staff
lacked experience with ERP, only one person had some experience in installing
an ERP. Further cost overruns resulted \ from training, an especially big cost
item. The timeand-materials basis contract would have increased the risk of
overtime and going over budget because vendors and consultants have an
interest in quoting low and seeing the work grow as the project proceeds.

Jackson faced personnel problems during ERP installation when the best and
brightest employees were involved in the implementation process leaving
them short-handed to do the everyday work. In addition, Jackson’s IT staff
lacked experience with ERP, only one person had some experience in installing
an ERP. Further cost overruns resulted \ from training, an especially big cost
item. The timeand-materials basis contract would have increased the risk of
overtime and going over budget because vendors and consultants have an
interest in quoting low and seeing the work grow as the project proceeds.

There is a natural competitiveness between the buyer and the ERP vendor.
vendor benefits by placing a “veil of complexity” over their work; the buyer
wants to get the system up and running with the least amount of work and
customization.

The service level agreements generay tend to be very complex because much
clearer definition of roles and responsibilities between client and service
provider is needed. From a consultant’s and vendor’s perspective, a high (>25
 percent) contingency is quite reasonable depending on the nature of the work,
whereas this is too much from the buyer’s perspective

Jackson Lab used several strategies to reduce the risk. First, they negotiated a
fixed-fee contract with Oracle rather than use the more commonly used time-
and-l11aterials contract. Second, they bought a surety bond from Gladwyne, a
risk management conSUlting firm. This strategy protected Jackson Lab from
the project’s cost overruns caused by IT staff being forced to solve the
technological challenges with “out-of-the-box thinking.” Third, it spent
considerable time and effort on changing the business processes and training
its employees with the new processes. Finally, they got better cooperation
from the vendor, Oracle, by negotiating a fixed-fee contract and a favorable
service level agreement. In addition, Jackson Lab should have built a time
buffer into their ERP implementation life cycle to avoid the pressure of
delivering the system on a predetermined timeline.

There are various technical and organizational challenges in implementing ERP

depending on

the organization,

scope of implementation,

business processes,

and skill level of the people using these applications

SYSTEMS DEVELOPMENT LIFE CYCLE

The process of developing new information systems is often called the system
development life cycle (SDLC).It basically includes a

systematic process of planning,

designing,

and creating an information system for organizations.

For complex systems development projects (e.g., ERP), it is often better to have a
structured methodology to avoid mishaps and coordinate the design and
development tasks properly among the members of a large systems development
team.

TRADITIONAL SDLC

The SDLC consists of tasks that are divided into phases or stages.

1.Investigation

2. 2. Analysis

3. 3. Design

4. 4. Implementation

5. 5. Maintenance

. The SDLC process begins when someone in the organization identifies a need
for a new system. The reason could be to gain competitive advantage, improve
operational efficiencies, expand business globally, or all of these. This
investigation phase conducted by the IT department will determine the
feasibility of successfully creating the new system from four different
perspectives.

These perspectives are:

1. 1. Organization feasibility-whether the new IT is aligned with the business

strategy and plans of the organization

2. 2. Technical feasibility-whether it is possible to solve the problem with the

current generation of information technology

3. Economic feasibility-whether benefits from new system will outweigh the

costs in the long term
4. 4. Operational feasibility-whether the organization has the necessary
resources to operate and support the new system

INVESTIGATION PHASE

the team should do a thorough analysis of the costs and benefits. The benefits
derived from the new system as well as the costs associated with a new
system are sometimes not very obvious

Costs and benefits that can be quantified are called tangible, whereas those
that cannot be quantified easily are called intangible.

Benefits like productivity improvements with a new system similarly are

tangible, whereas benefits gained due to better decision making are intangible

A good development team will highlight these issues in their investigation

report to top management such that they can plan for these expenses and
revenues over a longer period of time, thereby increasing the chances for the
new system to be implemented successfully.

A report is prepared for management and other stakeholders at the end of the
investigation phase. If approved, the project will begin the analysis phase;
otherwise, the project is abandoned or merged with another project.

ANALYSIS PHASE

Before beginning the analysis phase, the development team is usually

organized to include subject matter experts, consultants, and technical
specialists. The primary task of the analysis phase is to determine the user
requirements of the new system.

One approach that works best is to focus on the problems of the current
system

The information collected from this phase is analyzed and categorized by

different user groups and organized into a coherent list of new system-
functional requirements.
DESIGN PHASE

In the design phase, the focus is on

the new system’s architecture,

user interface,

and reporting requirements.

These requirements are grouped by input, process, and output stages of a system.
The design phase produces the blueprint or technical specifications of the new
system. The technical requirements and the architecture will again be scrutinized
by the management team. Once approved, the team can begin work on
implementing the new system.

IMPLEMENTATION PHASE

The implementation phase begins with

the acquisition of hardware, software, development of custom applications (if

necessary),

new system testing, training, and conversion of data from the old system to
the new system.

RAPID SDLC APPROACHES

The SDLC process has several problems, even though it is rigorous in making sure
that the new system is complete and successful in the organization

First, the time it takes to develop a new system is a long and tedious process.

Second, the cost associated with the SDLC process is very high.

Finally, all information systems do not require such a rigorous SDLC process.
 the SDLC would be overkill for a small-scale decision-making application;
therefore, over the years organizations have used rapid approaches to SDLC
that are quicker and less-expensive short-cuts to this process. These are called
Rapid SDLC approaches.

One rapid development approach is prototyping

Prototyping

ERP Life Cycle

ERP applications are prepackaged software developed by commercial

software vendors and custom installed for organizations to automate and
integrate the various business processes. Although ERP are packaged
software they are very different from PC-based software packages (e.g.,
Microsoft Office or other software) tha t you may have purchased for personal
use as shown in Table 4-1.

ERP IMPLEMENTATION PLAN

There are three major implementation plan choices are:

1.Comprehensive.

2. 2. Middle-of-the-Road.

3. 3. Vanilla.

Methodology refers to a systematic approach to solving a business problem.

ERP methodology builds on the theory that an enterprise can maximize its
returns by maximizing the utilization of its fixed supply of resources.
Information technology, with its increasing computer power and the ability to
correlate pieces of information, has proven to be the best tool for business
problem solving. Like SDLC, an ERP development life cycle provides a
systematic approach to implementing ERP software in the changing but
 limited-resource organizational environment. There are many different
vendor-driven methodologies or approaches that use traditional ERP
development life cycle or rapid ERP life cycles (e.g., Total Solution, FastTrack,
Rapid-Re,ASAP, and BIM)

TRADITIONAL ERP LIFE CYCLE

The traditional ERP life cycle includes the following major stages:

Stage 1. Scope and Commitment Stage.

Stage 2. Analysis and Design Stage.

Stage 3. Acquisition & Development Stage.

Stage 4. Implementation Stage.

Stage 5. Operation Stage

ROLE OF CHANGE MANAGEMENT

Change management (CM) plays an important role throughout the ERP life
cycle. System failures often occur when the attention is not devoted to this
from the beginning stages

RAPID ERP LIFE CYCLES

They provide different methodologies and techniques for rapid or accelerated

implementation. Scripts and wizards provided by consultants can help
automate some of the more common tasks that occur during an
implementation. These include migration of data, identification of duplicate
data, and other standard tasks.

The appropriate implementation model may vary based on company, culture,

software, budget, and the purpose of the implementation, but previous
implementation experience of the program management and consultants will
 likely be the’largest driving factor in determining the best approach

TOTAL SOLUTION

1. The Value Proposition.

2. Reality Check.

3. AlignedApproach.

4. Success Dimension.

5. Delivering Value.

FASTTRACK

Phases Designed to reflect and integrate decisions regarding business

redesign, organizational change and performance, training, process and
systems integrity, client-server technologies and technical architecture.

1. Scoping and Planning: Project definition and scope. Project planning is

initiated.

2. 2. Visioning and Targeting: Needs assessment. Vision and targets identified.

As-is modeling.

3. Redesign: To-be Modeling. Software design and development.

4. 4. Configuration: Software development. Integration test planning.

5. 5. Testing and Delivery: Integration testing. Business and system delivery.

Areas In addition, it identifies five areas (groups) as an individual thread to be

woven into a cohesive fabric through its five phase workplan. The areas and a
list of the functions performed are as follows:

1. 1. Project Management (project organization, risk management, planning,

monitoring, communications, budgeting, staffing, quality assurance).

2. 2. Information Technology Architecture (hardware and network selection,

procurement, installation, operations, software design, development,
 installation).

3. Process and Systems Integrity (security, audit control).

4. 4. Change Leadership (leadership, commitment, organizations design, change-

readiness, policies and procedures, performance measurements).

5. 5. Training and Documentation (needs assessment, training design and

delivery for project team, management, end-users, operations, and helpdesk.
Scripting of enduser and operations documentation).

RAPID RE

Gateway, a consulting firm in New York, has developed an ERP life cycle
methodology called Rapid Re. The five-stage, 54-step modular methodology is
customized to the needs of each project because that is what happens in
practice. Individual projects skip, rearrange, or recombine tasks to meet their
needs or give greater or lesser emphasis to some tasks.

Stage 1. Preparation. Mobilize, organize, and energize the people who will
perform the reengineering project.

Stage 2. Identification. Develop a customer-oriented process model of the

business.

Stage 3. Vision. Select the processes to reengineer and formulate redesign

options capable of achieving breakthrough performance

Stage 4. Solution. Define the technical and social requirements for the new
processes and develop detailed implementation plans.

Stage 5. Transformation. Implement the reengineering plans. In an ideal project,

stages one and two consider all key processes within a company and conclude
with a step that sets priorities for the processes to reengineer. The other stages
are executed repeatedly for each process selected for reengineering.
ACCELERATED SAP (ASAP)

The ASAP Roadmap is a detailed project plan by SAP that describes all
activities in an implementation. It includes the entire technical area to support
technical project management, and addresses such concerns as interfaces,
data conversions, and authorizations earlier than do most traditional
implementations. The ASAP Roadmap consists of five phases: project
preparation, business blueprint, realization, final preparation, go-live, and
support continuous change.

Phase 1. Project Preparation. Proper planning and assessing organizational

readiness is essential. Determine if there is a:

full agreement that all company decision makers are behind the project

clear project objectives

efficient decision-making process

company culture that is willing to accept change.

Phase 2. Business Blueprint.

Phase 3. Realization.

Phase 4. Final Preparation.

Phase 5. Go-Live and Support.

BUSINESS INTEGRATION METHODOLOGY (BIM)

The BIM methodology, developed by Accenture Systems in the 1990s, is

targeted for full-scale ERP projects that diagnose business integration needs,
design business strategies and architectures, deliver one or more business
capabilities to meet those needs, and ensure that the value of those
capabilities can be sustained over time.
1.The Planning Phase.

2.The Delivering Phase

3.The Managing Phase.

4.The Operating Phase.

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