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ERP Implementation - Tips for successful ERP implementation

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How and why of ERP failure - issues and challenges of ERP Implementation by Jyotindra Zaveri who has hands-on experience of fifteen years

Publicada em: Negócios, Tecnologia
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ERP Implementation - Tips for successful ERP implementation

  1. 1. ERP Implementation How and why of ERP failure & tips for successful ERP implementation BY Prof. Jyoti Zaveri Freelance ERP Consultant J. Zaveri ERP Implementation Issues and tips 1
  2. 2. Need for training. Education Not understanding what the new system is designed to achieve. At least 100 hrs of training is required for key users. Preparing masters / transaction on practice databases to get the comfort level and singing off is highly recommended. The CEO can make this happen, if he / she personally take interest, otherwise if left to users, the quality training does not happen and then chances of success are reduced. In one company, the training was given after the system was ‘live’. Users were busy with ISO implementation and most people saw the data entry screen for the first time when the legacy was removed. ERP training is required. J. Zaveri ERP Implementation Issues and tips 2
  3. 3. BPR and ERP It may be necessary to change your current business process • Do BPR J. Zaveri ERP Implementation Issues and tips 3
  4. 4. Lack of Top Management commitment (managementbeing involved but not dedicated). If the owner is not spending enough quality time, then the ERP project is likely to be unsuccessful. In one organization, the MD hardly took part in the discussion with ERP vendor and delegated the task to the General Manager, who in turn never wanted the ERP system, so he created all the roadblocks, and the vendor got frustrated and finally left J. Zaveri ERP Implementation Issues and tips 4
  5. 5. SRS Inadequate SRS or System Requirements Specification: Current processes are not adequately addressed. User must write down the requirements, which means taking out time and extra effort. The user usually explains casually, verbally, and hurriedly, then how the ERP can succeed If sufficient time is not given for preparing the SRS, ERP is likely fail Chopping and changing of program codes after the ERP goes Live is observed, if SRS exercise is not done properly. J. Zaveri ERP Implementation Issues and tips 5
  6. 6. Poor ERP Package Selection The package does not address the basic business functions of the client The package should be totally integrated, including accounts Some organizations are so comfortable with their cheap account-centric package that they do inventory and other functions in ERP but ask for data transfer from ERP to such accounting package! J. Zaveri ERP Implementation Issues and tips 6
  7. 7. Internal Resistance Resistance to changing the old processes. This is perhaps human nature Unless proper confidence building is done (during training) the user will still want to use the old method (or the legacy way) One ERP user (in a Mumbai based company) was so adamant that the MD had to ask him to resign (and he was the works manager who was expert in fire fighting, but MD wanted to prevent fire altogether). J. Zaveri ERP Implementation Issues and tips 7
  8. 8. Give me moon Unrealistic Expectations of the Benefits A user starts expecting moon One must draw a line, be satisfied, at least in the first phase, and let the system take off. J. Zaveri ERP Implementation Issues and tips 8
  9. 9. Return on investment. ROI? Unrealistic Expectations of the ROI. People forget to quantify the intangible benefit or they simply expect returns overnight Most users do not know even, what the ROI is For example • ROI can be reducing inventory level by x percentage • or ROI can be preparing of Excise (TAX) Invoice quickly and accurately • or ROI is to get the correct material requirement planning. JIT. J. Zaveri ERP Implementation Issues and tips 9
  10. 10. Time Frame Unrealistic Time Frame Expectations. ERP is like changing the wall itself (and not changing merely the paint of the wall) CEO / CFO expect things to happen overnight when they have not taken trouble to define (in writing); to what extent customization will be allowed One has to learn to put a full stop to chopping and changing. J. Zaveri ERP Implementation Issues and tips 10
  11. 11. TCO - MoneyAnother issues is that the Total Cost ofOwnership (TCO) is not understoodERP vendor / implementer money is notpaid in timeThe ERP implementing company istreated like any other supplier and ERPproject goes into a kind of negative cycleE.g., Think of a mobile phone:• When the SIM card charge is over it stops working and needs to be charged by paying additional amount. J. Zaveri ERP Implementation Issues and tips 11
  12. 12. “….By-the-way, we will do ERP also…. “ User / top management safely assume that certain procedure should be present in ERP. If the procedure is not explained in the beginning, legacy is not given which it may not reflect in the Business Blueprint (these reference guidelines) or in the POC If it is not in the Business Blueprint, it will not be there in ERP program TIP: ERP project is taken as ‘by-the-way’ project; whereas in true sense it should be the only priority during implementation phase. • Do not take ERP casually J. Zaveri ERP Implementation Issues and tips 12
  13. 13. Tight linking (integration) is good Another example, one user from marketing, did not appreciate the link of quotation and the sales order • He asked implementer to remove the link. Later, after six months, he realized his mistake and asked to provide for the link Sometime Director or CEO of the company does not share his or her long-term vision of the company, with the middle management or lower management. J. Zaveri ERP Implementation Issues and tips 13
  14. 14. Follow the checklist given below • What Kind of products? • E.g., Make to stock or make to order. E.g. Continuous process production or discreet production. • What ERP modules are you looking for? Write it down from the scope list of ERP modules given by ERP vendor. • Are you planning on replacing legacy software applications? Within the next 3 years? Which ones? Make list and plan to phase out ‘out-dated’ software ASAP. J. Zaveri ERP Implementation Issues and tips 14
  15. 15. Information Technology and ITinfrastructure What databases and operating systems do we have expertise? What will the IT department agree to and what is the long-term plan? List them If you are not sure, consult I. T. expert. For instance, in one corporate company EDP manager was asked to select ERP. She was trained by Red Hat on Linux. She insisted that ERP should be on Linux platform. During the ERP deployment, seven months down the line, she left the organization for greener pasture. Nobody knew anything about Linux. ERP project was abandoned • One year later the company deployed ERP on Microsoft platform. J. Zaveri ERP Implementation Issues and tips 15
  16. 16. Learn about TechnologyTechnology has advanced, therefore the selection teammembers will need to learn about workflow, TCP/IP, and manyother issues involved. ERP coordinator should be trained in thefollowing areas: basics of SQL. ERP can give intelligent alertsautomatically by email. This needs understanding of emailmanagement settings (e.g., MS Outlook or MS ExchangeServer settings). It is expected that ERP coordinator or I. T.support person knows about networking of computers (LAN).If necessary, plan a separate training for the InformationTechnology and new techniques that are akin with ERP. E.g.,UPS can be connected to Server to shut give messages tousers that battery backup is low, so users can logout andshutdown properly. E.g., using RFID technology and so forth.Embrace technology with both hands. Do not be afraid ofusing new technology. May be attending seminars and trainpeople continuously. J. Zaveri ERP Implementation Issues and tips 16
  17. 17. DAILY BACKUP Make a disaster management plan. Nobody wishes that accident should happen. Nevertheless, it is necessary to have a written document in place. Especially, mention about the backup and restore procedure. Do a rehearsal exercises. For instance, one factory was near river. Floods came. ERP server was on the ground floor and was damaged. Fortunately, backup CD was taken home every day. They could restore the data on another computer and start the work. Selecting ERP. • Invest lot of time in the ERP selection process. It is not like buying a mobile. If you do not like a cell phone, you can discard, and buy new one. ERP is like a long-term partnership (marriage, shall we say). There are going to be difference of opinion with the spouse. This can be sorted out. Similarly, one cannot keep on changing ERP. J. Zaveri ERP Implementation Issues and tips 17
  18. 18. DO YOUR HOME WORK WELL. COMPARE ERP MODULES OFFEREDBY VARIOUS ERP COMPANIES Do not get carried away by impressive PowerPoint presentations. Marketing people are trained to give ‘Rosy’ picture. The chief of ERP (main sponsor) should know the limitation of ERP and its customization. ERP implementers cannot deliver Moon. Although sales team will promise Moon (and Jupiter also). ☺. J. Zaveri ERP Implementation Issues and tips 18
  19. 19. ERP is not bed of roses. Business transformation is a painful process. Do not underestimate. It is like that scene of ‘Jurassic Park II’ movie. She is amused when she is looking at the Dinosaurs for the first time. She is told that in beginning, it is always ‘wah wah’ (great) but it ends up in screaming! J. Zaveri ERP Implementation Issues and tips 19
  20. 20. It is said that ERP implementation is a journey and not the final destination J. Zaveri ERP Implementation Issues and tips 20
  21. 21. Additional resources created and updated by Zaverito learn ERP: https://www.facebook.com/groups/discuss.erp Join Facebook Group ERP. http://www.facebook.com/dnserp Like Facebook Page ERP. http://dnserp.wordpress.com Subscribe ERP Blog. http://www.twitter.com/followERP Follow on Twitter. http://linkd.in/lFj98r Join ERP, E-business Forum LinkedIn Group. www.dnserp.com Digital Marketing 21
  22. 22. Join Prof. Zaveri on Facebook and LinkedIn j.zaveri@dnserp.com Follow on Twitter @followERP Subscribe ERP Blog http://dnserp.wordpress.com Subscribe SMM Blog http://digital-nervous-system.blogspot.com Subscribe video channel http://www.youtube.com/dnserp Follow presentations http://www.scribd.com/eLesson www.dnserp.com Digital Marketing Slide # 22