ERP implementation &

Transition strategies

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Agenda
What is an ERP System?
Why implement an ERP system?
How should ERP systems be
implemented?
Implementation strategies
Transition strategies

What is an ERP Key Characteristics
a business strategy and set of industry-domain-specific
applications that build customer and shareholder communities value
network system by enabling and optimizing enterprise and inter-
enterprise collaborative operational and financial processes
Integration
Packages
Evolving
Best Practices
Some Assembly Required





Typical architectural components
Why implement an ERP System?
To support business goals
Integrated, on-line, secure, self-service
processes for business
Eliminate costly mainframe/fragmented
technologies
Improved Integration of Systems and
Processes
Lower Costs
Empower Employees
Enable Partners,
Customers and Suppliers
ERP implementation life cycle
How should we implement ERP systems
Obtain the right
mix of people,
processes and
technology!!
How should we implement ERP Systems?
People
Project Structure
Should be aligned to processes
Process
Implementation Process (outlined in detail)
Adapt your processes to those of the ERP.
Technology
Hardware
Software
Integrated Systems
Alternative team structures
Method Description Advantages Disadvantages
Isolated
function
Participants from each
functional area are
responsible for their
own implementation
and use of the software.
1. Resources of the
organization are focused
on the implementation
2. They have the most
knowledge about their
business processes and
will be very
knowledgeable end-
users later
1.insufficient
communication
between functional
groups
2.workflows that span
multiple functional
modules may be
incorrectly
implemented, or may
not be implemented
Lightweight The project team
consists
1.Functional managers
2.Lead persons
3.A lightweight project
manager
Improved cross-
functional
communication through
regular project team
meetings
Conflicts are common
and it takes a long time
to resolve issues as
several participants
have to reach an
agreement.
Alternative team structures
Method Description Advantages Disadvantages
*Heavyweig
ht

A senior manager has
direct authority and
control over the ERP
project
Straight forward
communication
gives a clear
sense of
direction.
Strategy turns
increasingly difficult
to use as the size and
complexity of the
ERP implementation
increases.
A-Team This team structure is
similar to heavyweight
structure
1.A senior manager
manages the project
team. 2.all the
functional managers are
full time members of
the ERP team
The complete
authority to
make most of
the decisions at
all levels lies
within the team.
As decisions can be
made by the core
team without the
need to
communicate with
other team members
there may be limited
buy-in for these
decisions
Process
1. Definition and Analysis
2. Design
3. Build
4. Transition
5. Production



Technology
Technology is an enabler, not the driver
(it is there to assist the organisation to
achieve business goals)
It is a means to an end, not the end

Implementation strategy
Seven generally deployed strategies
Breakneck
Star
Turnkey, Low Risk, and In-House
Not have the luxury of full time human resources
to an ERP implementation
Budget
Partner
Implementation strategies
Method Description Advantages Disadvantages
Breakneck Implement an ERP
solution on a low
budget very rapidly
The company has a
quick solution if
strategy works
A very high risk approach
which rarely works
Star Do the right way with
a senior manager in
charge and dedicated
team members
The implementation
usually results faster
and cheaper
Full time resources are
needed
Turnkey Subcontract to ERP
system integrators
and providers all ERP
implementation
activities.
1.The
implementation is
done by experienced
people. 2.No internal
resources are
needed
1.The configured product
does not match business
needs.
2.Outsiders cannot fully
understand the functional
specifications
In-house Use only internal
resources to
implement the ERP
system
The strategy
generates cost
savings coupled with
internal ownership
1.An inexperienced team
requires a long time for
implementation
2.this turns out expensive
Implementation strategies(cont.)
Method Description Advantages Disadvantages
Budget Focus costs cutting by
limiting the scope of
the ERP project and
eliminating
consultants
There is a perception
that this approach is
cheaper
A general lack of support
from senior
management produces
lack of interest on the
project by the users
Partner

Use both internal and
external resources.
Split the responsibility
of the ERP project
Partners complement
the strength of the
internal team and
have partial
ownership of the
project
The implementation
usually takes longer due
to conflicts between the
supply chain partner
Low risk

Commit a high level
of resources with low
complexity and relax
milestones to
minimize
High probability of
success
Implementation takes a
long time
Selection of transition technique
Four basic transition techniques
Big bang
entails substantial risk
Phased
Process lines
Usually lack multiple process lines
Parallel
limited resources for small business.
ERP transition techniques
Method Description Advantages Disadvantages
Big Bang new system go live at the
same time the legacy
system is taken offline
Costs are reduced since no
interface programs are
required
high failure rates
are common
Phased One functional module
at a time is transitioned
in sequential order
1.Companies feel
comfortable implementing
one module at a time
2.the resources needed at
any given time are low
The transition
takes a long time.
Parallel Both the legacy and the
new ERP systems
operate in parallel
Good recovery options are
available if any thing goes
wrong with the new
system
Considerable
more resources
Process
line
1.in big bang fashion
2.only one process line
at a time
The experience gained
from doing one process
line at the time benefits
the next implementation
adds complexity
Database conversion strategy
Two basic data conversion methods
Electronic
Writing custom programs
Process is rapid
Verifiable Data is difficult
Manual
Judgments necessary during the conversion
Familiar with the new ERP system and develop a
sense
Risk management strategy
Three Risks
Small business location
Realities of small business
Companys niche and companys management
Risk management strategy
Minimize internal politics and resistance to
change
Appointment of a heavyweight project manager
Adopting a partner implementation strategy to
allow the internal team to focus on strategic
tasks
Change management strategy
The project manager, or champion, should
accept and deal with the internal politics
and resistance to change rather than go
into denial
Effective communications must be a
priority
Management should lay out the vision of
the company and explain the expected
benefits