ERP FAQ'S Page 1 of 7

What is customization in ERP?

What is the ERP life cycle?
Is there a good time to "go live"?
What is the role of implementation partner?
Why do ERP consultants charge a high fee?
What is the role of process-modeling tools ERP implementation?
What is the drawback of over customization?
What are the three dominant approaches to ERP implementation?
What is 'big bang' approach to ERP?
ERP being integrated software does one benefit by implementing
only specific modules?
Why are "financials", the first module implemented in many
Indian ERP implementations?
Why do consultants recommend changing business practice to
suit the ERP software rather than customizing the software to
every user needs?
I have a large MIS department with outstanding programmers
and analysis - Should I create my own ERP?
Is there a benchmarking tool to fine tune ERP performance?
How to prepare an organization for ERP implementation
What is an ERP Project team?
Who are the project champions?
What does "going live" mean?
How is "data migration" managed for ERP implementation?
For ERP implementation across multiple location does one need
dedicated communication channels like leased lines/ V SAT
terminals?
What is the main reason for end users accepting ERP?
BACK TO TOP

What is customization in ERP?

Customization is the job of fitting the ERP software to meet the
demands of a particular organization. This would mean the
mapping of the organizational structures, processes &

http://www.iiitb.ac.in/ss/erp-faq/main7pg1.htm 10/11/2008
ERP FAQ'S Page 2 of 7

environment of the organization into the corresponding model of

the organization that is embedded in the ERP software. In other
words, it is a mapping of the real world into the model world of
the particular ERP software. The structure and processes
represent one part of customization; the creation of master data,
input-output forms, validations, reports, queries, formats,
authorization, backup / restore procedures, data administration
procedures, disaster recovery processes etc., represent the full
gamut of customization.
BACK TO TOP

What is the ERP life cycle?

The set of activities through which ERP is implemented in an
organization constitutes the ERP life cycle. This can be
compared to the well developed System Development Life Cycle
(SDLC) in the traditional Structured System Analysis and Design
(SSAD). Typical ERP project consists of the following steps:

Step 1: ERP readiness assessment

Step 2: Preparing the organization for ERP
Step 3: ERP Feasibility Study
Step 4: Process modelling and documenting the "AS IS"
processes & "TO BE" processes (along with BPR)
Step 5: Detailed plan for ERP implementation (includes ERP
software selection, selection of implementation partners,
implementation methodology - "Big Bang" or Modular
Implementation - and the final and precise extent of
implementation)
Step 6: Detailed implementation including development, quality
assurance and production system
Step 7: Preparing to "go live" including data migration
Step 8: Going live
Step 9: Performance assessment, documentation, training
(continues in early stages also) and future plans.
BACK TO TOP

Is there a good time to "go live"?

Yes. Most implementations of ERP include financial module.
Every organization has a financial (fiscal) year both for internal
use as well as far legal / governmental consolidation. Since the
account books must be closed and financial reports prepared
(including the balance sheet and the profit and loss statement) for
the financial year, most ERP implementations try to synchronize
their "go live" date with that of the financial year. (April 1 in
India). If for some reason it cannot be on (April 1), many
organizations "go live" on October 1 at the end of the half-year.
Technically ERP software doesn't impose any restrictions. Any
day is good enough to "go live" as long as it is not " tomorrow"!
BACK TO TOP
What is the role of implementation partner?
Implementation partners generally come from specialized ERP
consulting houses that are generally outside the organization.

http://www.iiitb.ac.in/ss/erp-faq/main7pg1.htm 10/11/2008
ERP FAQ'S Page 3 of 7

Being experts in a particular area (materials, production, finance

or distribution), these experts from outside, not only bring
software expertise with respect to particular ERP software, but
also bring the extra benefit from their vast prior experiences in
other firms where they would have implemented that particular
ERP. Over the years, the implementation partners have
developed enough know-how in the form of templates for
implementation. These templates significantly reduce the cost
and time of implementation and errors of implementation.
Though implementation consultants charge a high fee, they bring
significant amount of value, thanks to their prior experiences.
BACK TO TOP

Why do ERP consultants charge a high fee?

ERP consultants operate in the "high risk high reward" area.
Contemporary ERP software are complex pieces which need
years to master. ERP consultants invest significant amount of
time and effort, which need to be rewarded. ERP Consultancy is
also given to the highest levels of management often at the level
of CEO. CEO level consulting cannot come cheap. A well-
implemented ERP can translate to crores of rupees of saving for
an organization justifying once again the high cost of ERP
consultants. ERP consultants also combine a rare combination of
communication skill, domain knowledge and software expertise,
once again justifying the high cost. Last, but not the least, ERP
sales are growing fast and the demand for ERP consultants is all
time high. The gap in supply-demand also explains the unusually
high cost of ERP consultants.
BACK TO TOP

What is the role of process-modeling tools ERP

implementation?
Process Modelling provides a means to map the organization
processes and visualize it in a graphical manner. This helps in
communication, clarification and documentation of the "AS IS"
and "TO BE" processes. Process modelling can be used to
reinforce the central theme of ERP, namely, a shift from function
orientation to process orientation.
BACK TO TOP

What is the drawback of over customization?

Customization is the process of fitting the chosen ERP software
to the needs of a specific organization. Whenever the processes
represented in the ERP software differ significantly from the
processes used by the firm one has two options. First is to build
the organizational process into the ERP software through
customization. The second one is to change the practice followed
by the firm to suit the process native to the ERP software.
Traditional common sense would force people to customize the
software to suit the individual demands of the organization. This
leads to two problems. The first one arises out of the fact that any
customization done locally is outside the core ERP software.

http://www.iiitb.ac.in/ss/erp-faq/main7pg1.htm 10/11/2008
ERP FAQ'S Page 4 of 7

Accordingly, the next release of the ERP software would not

support local customization. They have to be re-done by the end
user for the new release. Second the very purpose of ERP is to
take advantage of the best practices in industry that come
embedded with the ERP software. By over customizing the
implementers would deprive the benefit of world - class practice
to the organization that is implementing ERP.
BACK TO TOP

What are the three dominant approaches to ERP

implementation?
The three dominant approaches to ERP implementation are "big
bang", location-wise and module-wise implementation. In the big
bang approach the organization decides to implement all relevant
modules, for example - Financials, Logistics & HR- all at the
same time. This has the advantage of getting the full benefit of
the integrated software across all functions of the organization.
However there is a risk of the implementation getting out of
control. In "Location-wise" implementation, the organization
chooses a specific location, say, the head office, one of the new
plants etc. The choice could be based on better infrastructure,
better IT culture, more co-operative set of users, higher level of
automation etc. In "module-wise" implementation individual
modules are taken up for implementation in a phased manner
depending on the criticality of applications. Once again a module
taken up for implementation can be implemented across all
locations or just one location. Later they can be rolled out to
other locations.
BACK TO TOP
What is 'big bang' approach to ERP?
This has already been explained elsewhere. See previous answer.
BACK TO TOP
ERP being integrated software does one benefit by
implementing only specific modules?
Yes. The full benefit of ERP would accrue if all the ERP
modules are implemented. However many organizations
implement ERP only in those functions, which are, considered to
be of strategic importance. Some of the modules, though they
appear to be limited to specific functions, in fact integrate with
many other functions indirectly. For example finance module
primarily targets the accounting and finance functions. However
the accounts payable module address all the material purchases
and in turn impacts the entire materials management functions.
Many more examples can be quoted to reinforce our viewpoint.
The process orientation of ERP software definitely contributes to
a better management of the organization. Even partial
implementation of the ERP therefore leads to significant benefits.
BACK TO TOP
Why are "financials", the first module implemented in many
Indian ERP implementations?
Financial modules provide the basic pulse of an organization. It
also impacts all other modules. Successful implementations of

http://www.iiitb.ac.in/ss/erp-faq/main7pg1.htm 10/11/2008
ERP FAQ'S Page 5 of 7

financials show up immediately reinforcing the faith of an

organization in ERP. Other modules cannot be implemented
without the financial module in place. All these factors explain
the fact that financial modules are taken up first.
BACK TO TOP
Why do consultants recommend changing business practice
to suit the ERP software rather than customizing the
software to every user needs?
A key contribution of ERP software is the bundled business
process knowledge that come along with ERP software. These
processes have evolved over the past two decades of ERP
implementation in some of the most well-managed corporations
around the world. By adapting to those processes that have
proved successful in some of the finest corporations around the
world, an organization implementing ERP would get the
advantage of these "best of the breed" practices. That is the
reason behind the consultant recommendations.
BACK TO TOP
I have a large MIS department with outstanding
programmers and analysis - Should I create my own ERP?
Unless your line of Business is so unusual that no existing ERP
software available in the market meets your needs you should not
attempt to develop your own ERP software. The reason why
ERP software has been so successful is due to the deficiencies of
software developed in house by MIS departments. IS/IT staff
who generally constitutes the MIS department lack business and
process orientation. The success of ERP is due to the fact that
ERP software development teams have business knowledge. In
house software development has also proved to be more costly
and time consuming compared to the implementation of
packaged ERP software. No MIS department can afford to hire
hundreds, if not thousands of professionals dedicated to software
development. You should attempt ERP software development
only if you want to address the general business needs of an
enterprise through a standard ERP software product, not to meet
the requirements of your organization. As you can readily see
these are entirely different games. A software giant Microsoft
decided to use SAP R/3 rather than develop it in-house!
BACK TO TOP
Is there a benchmarking tool to fine tune ERP performance?
Every ERP vendor provides performance guidelines that can be
used by system administrators to fine tune performance. Some of
them are very comprehensive and address fine-tuning at the
application, database, operating system, processor and even the
network level. Other ERP vendors provide tools that can
leverage the leading edge database tuning, operating system
tuning and network performance tuning tools.
BACK TO TOP
How to prepare an organization for ERP implementation?
There is no easy magic through which one can prepare an
organization for ERP implementation. Exposing the top
management to the benefits of ERP through the real world case

http://www.iiitb.ac.in/ss/erp-faq/main7pg1.htm 10/11/2008
ERP FAQ'S Page 6 of 7

studies, sharing of experience by other corporations that have

successfully implemented ERP and creation of awareness is the
first step. Convincing the top management to use a high risk,
high reward scheme such as ERP is a major challenge. Almost
all the members of the organization should get the excitement
about ERP project implementation. Communicating and sharing
of the ERP vision is the most important organizational
preparation for a successful ERP implementation.
BACK TO TOP
What is an ERP Project team?
ERP project team would be charged with the responsibility of
implementing the ERP for the specific organization. A
champion, who is skilled in communication and understands the
organization well should head the ERP team. The leader must be
well accepted by the most employees of the organization. The
leader also must be a person who can keep the motivation level
of the implementation team at fairly high levels throughout the
several months of implementation. The implementation team
would consist of dozens of people. There will be a number of
teams for each of the functional area with every team consisting
of key users and IT personnel to provide technology support.
BACK TO TOP
Who are the project champions?
Project champions (for the crore processes that are taken up for
implementation) would be those individuals who would take the
ownership of implementation. They are expected to provide the
leadership so as to sustain the trials and tribulations of ERP
implementation.
BACK TO TOP
What does "going live" mean?
After many months of implementation plan every organization
would decide a particular date when they would shift from their
legacy system to the ERP system. Up to that time the ERP
software would be under development followed by testing and
quality assurance. Once by ERP implementation team feels
convinced that the development is complete and testing is
satisfactory, they would decide to "go live". In a sense "go live"
date marks the end of ERP project completion. Generally most
ERP project "go live" on the starting of the fiscal/ financial year,
namely April 1 in India.
BACK TO TOP
How is "data migration" managed for ERP implementation?
To complete the ERP implementation one would need to migrate
master data, including customer master, material master, budget
head, employee list etc from legacy systems. Large number of
earlier transaction (pending transaction for completion, archived
transaction for analysis) would also be transported to the ERP
system. In a typical corporation these would call for significant
amount of data transport. Often they many not be available in
machine-readable form. Often manual data will have
inconsistencies such as incorrect code numbers, multiple code
numbers to represent the same item, misspellings etc that needs

http://www.iiitb.ac.in/ss/erp-faq/main7pg1.htm 10/11/2008
ERP FAQ'S Page 7 of 7

data cleansing. Data cleansing itself could be a major activity.

Even if data is available in machine-readable form, it may be
distributed across heterogeneous hardware and software
platforms. Reasonable amount of effort must be spent in
reconciling such data. Special utilities are available for data
migration both from ERP vendors and third party vendors. For
the Indian IT industry data migration itself could be a major
business opportunity.
BACK TO TOP
For ERP implementation across multiple location does one
need dedicated communication channels like leased lines/ V
SAT terminals?
Many ERP implementation sites that are geographically
distributed need reliable communication links for on-line
transaction processing. In the absence of public data network in
India, most organizations are forced to go for VSAT networks
and leased line circuits in India.
BACK TO TOP
What is the main reason for end users accepting ERP?
ERP speaks the end user language more than any other software
piece. ERP implementation had been successful whenever it was
driven by business goals and not IT goals. ERP vendors have
been successful in convincing the end users to take ERP
decisions. Rarely IT departments take the decision to go far ERP.
The ERP training and skills to use ERP can be developed by end
users quite easily. All these together have generated substantial
user acceptance of ERP.
BACK TO TOP

http://www.iiitb.ac.in/ss/erp-faq/main7pg1.htm 10/11/2008