ERP: POST-IMPLEMENTATION OPTIONS

ERP: POST-IMPLEMENTATION OPTIONS

After an ERP Implementation, organizations should not sit back and relax. Depending on the scope of the ERP Implementation exercise, several options can be explored to further maximize the gains.

The first thing that an organization should look forward to, after an ERP implementation, is improved morale of the workforce. Needless to say, It would have a cascade effect hi terms of Increased productivity and better customer response.

On the monetary side, depending on the Level of success, ROl should also be on the way up. It Is estimated that a well managed ERP project can have up to 200% return on investment within a short period of time while a poorly managed ERP project can yield a return on investment as low as 25%

During the phase of minimization, organizations move closer to best practices. Depending on the target environment design, which is governed by the ability to change, this effort could be a natural extension of the ERP implementation or it could be a separate project In Itself. Process optimization, and thus performance improvement, are a continuous exercise.

ERP IMPLEMENTATION METHODOLOGY

Broadly, the steps involved in a total ERP implementation can be listed as follows:

1. Identification of the needs for implementing an ERP package.

2. Evaluating the “as-is” situation of your business.

3. Deciding upon the desired would-be situation for your business.

4. Reengineering of the business processes to achieve the desired results.

5. Evaluation of the various ERP packages.

6. Finalizing of the ERP package.

7. Installing the requisite hardware and network.

8. Finalizing the implementation consultants

9. Implementation of the ERP package.

We now briefly discuss these steps:

1. Identification of the needs for Implementing an ERP package The fist step for Implementing an package is to Identify the reasons for going In for an ERP solution for your business. This step prepares you for some basic questions like:

Why should I Implement an ERP Package?

Will it significantly improve my profitability?

Will it lead to reduced delivery times for my products?

Will it enhance my customer's satisfaction level in terms of cost, delivery time, service and quality?

Will it help reduce the cost of my products?

Will it enable me to achieve the same business volume with reduced manpower?

Will it enable me to reengineer my business processes?

The above questions, although y obvious, should form the basis of the decision to adopt an ERP implementation and should at all times be the final goal. The other factors that should be taken into consideration are:

• Need for quick flow of Information between business partners

• Effective management information system for quick decision making

• Elimination of manual preparation of various statutory statements

• Need for a high level o integration between the various business functions.

2. Evaluating the "is-as" situation of your business. In this step, one needs to thoroughly understand what existing business processes the organization is following to transact its business. The various business functions should first be enumerated. For example, procurement, production, sales, etc. Now the processes used to achieve the business transactions should be listed in detail. The technique of process mapping can be used here. The process map should give you the following details for any business process:

• The total time the business process takes to complete

• The total number of decision points Involved

• The number of departments/geographical locations that the business process involves

• The flow of information

• The number of reporting points.

3. Deciding upon the desired would-be situation for your business. In this step, we decide on what we want on business processes to finally look like. Here we use the techniques of benchmarking to ensure that the targets set are comparable to the best in the Industry. Benchmarking can be done on various aspects of the business like cost, quality, lead time, service, etc.

4. Re-engineering of the business processes to achieve the desired results. To achieve the new business processes we reengineer the existing processes in such a manner that

• The business process cycle time is reduced significantly

• The number of decision points arc reduced to the bare minimum

• The flow of Information is streamlined, i.e. there is no unnecessary to-and-fro flow of Information between departments.

5. Evaluation of the various ERP packages. In this step various ERP packages available In the market are evaluated with respect to the following aspects:

Global presence. Check the performance and acceptability of the package globally.

Local presence. Check how the package Is performing In the local market— this gives an Idea as to how well a package Is taking care of the country specific business needs,

Investment in R & D, Evaluate the package from the point of view of investments the ERP vendor is making in R & D to continuously update their product. A good investment in R & D Is a healthy indication of the longevity of the package.

Target market, See which segment of the industry the package basically aiming at. some packages, for eg. a specific to process industry type of applications whereas others cater specifically to discrete manufacturing. Choose a package that has a strong hold your type of industry.

Price. This is of course the main criterion that decides what package you will finally go in for.

Modularity This aspect needs to be considered when you want to implement only some particular functions in the ERP package. The availability of the package as independent modules a must in this case.

Obsolescence. While considering a package it essential to see what would be the active life of the product before it becomes obsolete. As mentioned above the investments in R & D directly contribute to upgrade a package from time to time thus increasing useful life.

Ease of Implementation: This factor ne to looked into In detail because a quick, smooth and hassle-free implementation is the key to successful transition from the legacy system. This in turn ensures that your business is not adversely affected in the transition period.

Cost of implementation: With large-scale integration of ERP packages and the consequent complexity built into them, it has become essential to consider the cost of implementation which in some cases can be phenomenal.

Post-implementation support: Before deciding on an ERP package, It Is advisable to check the quality and range of the post-implementation support that the vendor provides for his package.

6. Finalizing of the ERP package After a thorough evaluation of all the ERP packages vis-à-vis the key factors of your business, the package best suited to your business needs selected. The process of finalizing can be simplified by making a matrix of the key factors. You can then rate all the packages under these heads.

7. Installing the requisite hardware and networks. In this step one has to install the hardware and network required for the chosen ERP package. The installation of the hardware has to be well planned because generally the hardware arrives in time and lies idle due to the delays in Implementation. Also, the induction of the hardware should be in a phased manner to avoid blocking of capital.

8. Finalizing the Implementation consultants. The factors which go into the selection of the consultant are:

• Skill-set available with the consultant (application area)

• Installation base of the consultant

• Industry-specific experience (knowledge of the various Industry-specific business processes)

• Finances involved in hiring the particular consultant

9. Implementation of the ERP package. The broad steps involved m the implementation of the ERP package are:

(i) Formation of implementation team

(ii) Preparation of Implementation plan

(iii) Mapping of business processes on to the package

(iv) Gap analysis

(v) Customization

(vi) Development of user-specific reports and transactions

(vii) Uploading of data from existing systems

(viii) Test runs

(ix) User training

(x) Parallel run

(xi) Concurrence from user on satisfactory working of the system

(xii) Migration to the new system

(xlii) user documentation

(xiv) Post implementation support

(xv) System monitoring and fine tuning.

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