1. Enterprise Resource
Planning (ERP) Systems

2. What is ERP?

Enterprise resource planning (ERP) software is a set of
applications that helps to automate different departments of
an organization.

“Integration” is the key word for ERP implementation.
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3. W hat is ERP?
 It
may also integrate key customers and
suppliers as part of the enterprise’s operation.
 It
provides integrated database and customdesigned report systems.
 It
adopts a set of “best practices” for carrying
out all business processes.
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4. Problems with Non-ERP Systems
In-house design limits connectivity outside the
company
 Tendency toward separate IS’s within firm

• lack of integration limits communication within the
company
Strategic decision-making not supported
 Long-term maintenance costs high
 Limits ability to engage in process reengineering

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5. Traditional IS Model:
Closed Database Architecture

Similar in concept to flat-file approach
• data remains the property of the application
• fragmentation limits communications

Existence of numerous distinct and independent
databases
• redundancy and anomaly problems

Paper-based
• requires multiple entry of data
• status of information unknown at key points
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6. Characteristics of an ERP System

Includes business management software that enables finance and
human resources in a completely integrated fashion

Enables high levels of integration across business functions and
units

Provides for widespread sharing of data from a single
information repository

Drives extensive business transformation and change
management efforts

Requires high levels of implementationand
effort and support
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ERP, Introduction, Scope
Benefits

7. Why ERP
 Integrate
financial information
 Integrate
customer order information
 Standardize
and speed up operations
processes
 Reduce
inventory
 Standardize
Human Resources information
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8. Potential Benefits of ERP
 Internal
Benefits
• Integration of a single source of data
• Common data definition
• A real-time system
• Increased productivity
• Reduced operating costs
• Improved internal communication
• Foundation for future improvement
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9. Potential Benefits of ERP
 External
Benefits
• Improved customer service and order fulfillment
• Improved communication with suppliers and
customers
• Enhanced competitive position
• Increased sales and profits
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10. ERP Functionality/Information
Integration Through ERP
-General Ledger
-Accounts Receivable
-Accounts Payable
-Procurement
-Fixed Assets
-Treasury Mgmt
-Cost Control
-Grant Management
-HR/Benefits
Administration
-Payroll
-Self-service HR
-eProcurement
- Employee Self Service
- e-Recruiting/e-Hiring
- e-Filing
- Citizen Access
- Web-enabled transactions
- e-Commerce
Transaction Engine
Core software that manages
transaction flow among
applications and handles tasks
like security and data integrity
Customer Relationship Mgt
Data Analysis
Decision support software that lets
senior executives and other users
analyze transaction data to track
business performance
Supply Chain Mgmt
Planning, scheduling and fulfillment
applications that address all
procurement requirements across
the enterprise
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Benefits
-Consistent user experience
- Personalization of services
- Realtime access- enterprise info
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11. ERP Implementation Challenges

Focus on applications rather than business processes

ERP project management expertise

Scope and change management

Sub-optimization of system capabilities

Staffing and retaining full time project resources

Experienced implementation partners

Product maturity and limitations
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12. ERP Implementation Approaches
 The
big bang approach – install a single ERP
system across the entire organization all at ones.
 Phase
out approach – install one or several ERP
modules for phased implementation of key
business processes.
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13. Company
Management
Go ahead
Pre-Evaluation Screening
ERP Vendors
Package Evaluation
Project Planning
Gap Analysis
Implementation Team Training
Reengineering
Testing
Configuration
End-User Training
Going Live
Post Implementation Phase
ERP implementation Lifecycle
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14. ERP Implementation



ERP implementation lifecycle focus on the ERP project
which is carried out to make ERP up and running.
ERP project is likely to go through different phases like
any other project.
Most often these phases do not necessarily depend on one
another in a sequence, i.e. one phase might start before
previous phase has finished.
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15. ERP Implementation
 The
different phases of ERP implementation
are:• Pre-evaluation Screening
• Package Evaluation
• Project Planning Phase
• Gap-Analysis
• Reengineering
• Configuration
• Implementation Team Training
• Testing
• Going Live
• End-user training
• Post – implementation
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16. Pre-evaluation Screening

When the company has decided to implement the
ERP the search for the convenient and suitable ERP
package begins.
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17. Package Evaluation
The objective of this phase is to find the package
that is flexible enough to meet the company’s
need or in other words, a software that could be
customized to obtain a ‘good fit’.
 Once the packages to be evaluated are identified,
the company needs to develop a selection criteria
that will permit the evaluation of all the available
packages on the same scale

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18. Package Evaluation
 Some
important points to be kept in mind
while evaluating ERP software include:
• Functional fit with the company’s business
•
process.
Degree of integration between the various
components of the ERP system.
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19. Package Evaluation
• Flexibility and scalability
• Complexity
• User friendliness
• Quick implementation
 It
is better to have a selection committee that
will do the evaluation process.
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20. Project Planning Phase
This is the phase that designs the implementation
process. Time schedules, deadlines, etc. for the
project are arrived at.
 The project plan is developed in this phase.
 In this phase the details of how to go about the
implementation are decided. The project plan is
developed, roles are identified and responsibilities
are assigned.

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21. Project Planning Phase



The organisational resources that will be used for the
implementation are decided and the people who are
supposed to head the implementation are identified.
The implementation team members are selected and
task allocation is done.
The phase will decide when to begin the project, how
to do it and when the project is supposed to be
completed.
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22. Project Planning Phase



The phase will also plan the ‘What to do’ in case of
contingencies; how to monitor the progress of the
implementation;
The phase will plan what control measures should be
installed and what corrective actions should be taken
when things get out of control.
The project planning is usually done by a committee
constituted by the team leaders of each
implementation group headed by CIO.
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23. Gap Analysis



This is the most crucial phase for the success of the
ERP implementation.
Simply it is the process through which companies
create a complete model of where they are now, and
in which direction they want to head in the future.
The trick is to design a model which both anticipates
and covers any functional gaps.
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24. Gap Analysis

Some companies decide to live without a particular
function. Other solutions include:
• Upgrade
• Identify the third party product that might fill the
gap
• Design a custom program
• Altering the ERP source code, (the most expensive
alternative; usually reserved for mission-critical
installation)
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25. Reengineering

This phase involves human factors.

In ERP implementation settings, reengineering has two
connotations. The first connotation is the controversial
one, involving the use of ERP to aid in downsizing
efforts.

In this case ERP is purchased with aim of reducing the
number of employees.
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26. Reengineering

Every implementation will involve some change in job
responsibilities as processes become more automated and
efficient.

However it is best to regard ERP as investment and costcutting measure rather than a downsizing tool.

ERP should endanger business change but not endanger
the jobs of thousands of employee.
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27. Configuration

This is the main functional area of ERP
implementation.

The Holy Grail (unwritten rule) of ERP
implementation is, synchronising existing company
practices with the ERP package rather than changing
the source code and customising it to suit the
company.
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28. Configuration

In this case business process have to be understood
and mapped in such a way that the incoming ERP
solutions match up with the overall goals of the
company.

It is not required to shut down company operations
while the mapping is in progress.
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29. Configuration

Using a prototype is a great idea (a simulation of the actual
business processes of the company).

The prototype allows for thorough testing of the “to be” model
in a controlled environment.

Configuring the system reveals both the strength and the
weaknesses of the company business processes.
It is important for the success of ERP implementation that
those configuring the system are able to explain what won’t fit
into the package where the gaps in functionality occur.

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30. Implementation Team Training

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 self-sufficient in running the ERP
system, it should have a good in-house team that can
handle the various solutions.

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31. Testing


This is the point where the real testing happens.
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.
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32. Going Live
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.

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33. End-User Training




This is the phase where the actual users of the system will be
trained on how to use the system.
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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34. Post – Implementation
(Maintenance Mode)



This is the very critical phase when the implementation phase
is over.
There must be enough employees who are trained to handle
the problem that might occurred when the system is running.
There must be technical people in the company who have the
ability to enhance the system when required.
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35. Major Challenges to ERP Implementation
 Flexibility
of software system upgrades
 Implementation
timelines
 Availability
of internal technical knowledge
and resources
 Education
and training
 Implementation
 Resistance
strategy and execution
to change
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36. ERP Implementation - Key Enablers






The organization is prepared for the change.
The executive leaders are active and visible in their
support.
The initiative is seen as a business imperative by the
organization.
The resources are available to conduct the project
completely.
A good packaged system is used and not customized.
The user group is trained to use the software before it is
implemented.
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37. Project Critical Success Factors
Leadership commitment
 Communication
 Full-time staff
 Professional project management
 Phased implementation approach
 Scope management.(The company should be clear of
the need)
 Business transformation and change management
 Job-specific end-user training
 Focused issue resolution
 Post implementation support

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38. Drawbacks of ERP systems


The success of the system is fully dependent on how the workers utilize it.
• Employees must be properly trained, and companies do not think to
invest much money on training. The thinking that goes along is that while
at work the employees will be trained on own.
One of the biggest challenge is customization.
• Altough companies customize the ERP software according to the client
need but some or the other issues always remain with the customization.
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