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ERP Implementation cycle

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Mantavya Gajjar
Mantavya Gajjar

The document discusses the ERP implementation life cycle including the methodology, critical success factors, and critical failure factors. It describes the typical phases of an ERP implementation project including pre-implementation, implementation, and post-implementation. It also outlines some of the key challenges of implementing an ERP system such as change management, user adoption, and meeting expectations. Critical success factors include leadership commitment, effective project management, and training, while common critical failures include customization, high turnover, and poor testing.

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ERP Implementation Life Cycle A MS Rajesh Kanna rajesh@itarait.com
To Discuss • Enterprise Resource Planning System • ERP Implementation Life Cycle – Methodology – Critical Success Factor – Critical Failure Factor – Challenges • ERP Case Study – Experience Sharing • Discussions
A R E V I S I T
Evolution of ERP Inventory Production 1960 MRP Purchasing Scheduling Finance 1970 MRP MRP II Labour All Internal 1980 MRP II ERP Resources Internal 1990 ERP Customers & Internal SCM Suppliers External Extended Internal 2000 Customers & SCM ERP/SCM Suppliers 2010 ? TIME
ERP is the integrated IT platform for the business
Business Processes Traditional Approach is Function Specific like Sales – Dispatch - Purchase – Stores – Production - Accounts Modern Approach is based on Business Process - interlinking Departments • Order To Cash • Indent to Pay • Production - Planning to Execution to Warehouse • Maintenance – Planning to Execution • Customer / Supplier Relationship Management • Products – Concept – Design & Development to Market • Human Capital – Hire to Retire • Fixed Asset – Life Cycle • Accounting Cycle
Business Processes in ERP Quality Cycle Maintenance Cycle Production Cycle Sales Forecast – Confirmed Receive Indents / Plans – Order – FG Shipping Issue Materials Revenue Expenditure Cycle Cycle ERP System Accounting Customer Enquiry – Order Booking – Dispatch – Cycle Indents – Procurement – Invoice - Invoice Processing
Implementing ERP System – Project Management Methodology Challenges Critical Success Factor Critical Failure Factor
Implementing ERP System Methodology What is ..? Why it is required..? Benefits..?
Fundamentals • What is a Project ? • A project is a temporary endeavor undertaken to create a unique product or service. • What is Project Management ? • Project Management is the application of knowledge, skills, tools and techniques to project activities in order to meet or exceed stakeholder needs and expectations. • Project Management Methodology • To provide a standard management approach and guidelines to ensure that projects are developed in a disciplined, well-managed, and consistent manner that promotes the delivery of quality products and results in projects that are completed on schedule and within budget. • Success Criteria for a Project? • Does the implemented system/product meet the defined business goals and objectives..? • Does the project meet the documented requirement specifications..? • Was it completed on time and within the approved budget..?
Dimensions of Project Management Life Cycle Process Knowledge 1. Definition 1. Initiate 1. Integration 2. Requirements 2. Plan 2. Scope 3. Analysis 3. Execute 3. Time 4. Design 4. Control 4. Cost 5. Development 5. Closure 5. Quality 6. Testing 6. Human Resource 7. Implementation 7. Communication 8. Risk 9. Procurement Source
ITARA’s Implementation Methodology Extended Implementation Diagnostic Analysis Pre-Implementation Design Development Implementation Deployment Support Post-Implementation
Pre-Implementation • Conduct Process and System SDD Sign-Off Study • Conduct Kick- Off Meeting • Project Team Formation • Fixing Roles and System Study • Project Responsibility Preparation • Preliminary Kick-Off Meeting Discussions Project Organization • Solution Design Document Preparation • Discussion Project Plan • Sign-Off
Implementation • Conduct CRP Go-Live • Course Corrections • Conduct Module Testing and User Acceptance Testing • Start Configuring Modules and Data SDD Processes • Master Data Migration Collection – Training Scanning - Upload • Setting Up Servers, CRP Connectivity • Perform Data etc Migration Modules Activities Configuration • Ensure Go Live • Conduct User Day-1 Reports Master Data Training and Evaluate Training Feed Infrastructure Back
Post Implementation • Confirm Project Completion • Sign-Off • Provide Support till Warranty expires • Log Post Live Issues • Review and Resolve Issues • Establish Help Desk Function Completion • Appoint CRM Support Team Warranty Support Post Live Issues Help Desk
Deliverables • MoM - Kick-Off Meeting • Project Plan • Master Data Template • Solution Design Documents for • High Level and Business Processes wise • Module Deliveries • Day One Reports • MIS Reports • As agreed in Solution Design Document • Closure of Issue Logs
Implementing ERP System Challenges Risks Communication Alignment – Board Room to Stock Room Change Management Resistance to Adoption Knowledge Gaps – User / Consultant User doesn’t know what he wants & Consultant doesn't know how to give - Infrastructure Getting Sign-Off Expectation and Delivery Gap ….
ERP Implementation cycle
Implementing ERP System - CSF • Leadership commitment • Communication • Professional project management • Phased implementation approach • Scope management • Business transformation and change management • Removal of cross functional barriers • Job-specific end-user training • Members from Board Room to Stock Room know their roles and responsibilities. • Focused issue resolution • Post implementation support
Implementing ERP System - CFF • ERP System Misfit • High Turnover Rate of Project Team • Over-Reliance of Heavy Customization • Poor Consultant Effectiveness • Poor IT Infrastructure • Poor Knowledge Transfer • Poor Project Management Effectiveness • Poor Quality of Business Process Re-Engineering • Poor Quality of Testing • Poor Top Management Support • Too Tight Project Schedule • Unclear Concept of the Nature and Use of ERP System – from user’s point • User Resistance to Change
An Experience Sharing
Client Environment • Trident Pneumatics is one of the leading industry in manufacturing critical compressed air solutions. • They are largest exporters of compressed air treatment products in India. • Human capital size in the company is around 100. • The company was using a Indian accounting software to manage their accounts and were evaluating many ERP applications to consolidate the data & process integrity between the departments. • The company also has tried with 3 ERP Implementation in earlier times.
Business Need • Trident Pneumatics planned to go for ERP Implementation and the management was in a favour of implementing a proven Open Source ERP Application. There fore ITARA suggested OpenERP as recommended Solution. Trident has the following business needs to be sorted out in ERP. • Required to Streamline and automate the interlinked business processes and to get real-time and accurate MIS by implementing OpenERP System • Required to maintain complete and accurate master data (Customer, Vendor, Price Lists, Products,BOMs, Work Center etc) • Required to have Better Inventory Management • Expectation to have Optimized Production Planning and Control • Need to maintain SOD and Data Access Controls at all levels of User Group • Need to tightly integrate “Order to Cash” , “Procure to Pay “ , “Production Planning to Execution “ processes • Need to monitor Real Time Financial MIS, Payables and Receivables etc. • The company was using a Indian accounting software to manage their accounts and were evaluating many ERP applications to consolidate the data & process integrity between the departments.
The Implementation • About project – Goal: Role out Single ERP Team application to service the global ◦ Steering Committee - Trident customers. ◦ Core Team - Trident – Retire the legacy Application. – Users CTQ’s to be met ◦ Application User Team - Trident ◦ Functional Team - ITARA • Methodology ◦ Project Leader – Water Fall ◦ Functional Consultants ◦ OpenERP Developer • Users – 15 Business Users ◦ Tiny ERP Support – 15 Project Users - R&D – 10 CRM Users Time line ◦ 4 Months (P) / 6 Months (A) • Location – Multiple location - HQ in Coimbatore Support – User across India ◦ Off-Site / Remote Login
OpenERP Solutions ITARA started the ERP Implementation with APA Gap Analysis to find the Pain Areas and Opportunity for process improvements. Implementation is as below • Product: OpenERP 5.0.14 • Sector: Discrete Manufacturing • Modules Implemented • Sales Management • Service & Support • Purchase Management • Warehouse Management • Manufacturing • Project Management • HR Management • Accounting
Few of Key Solutions.. Delivered • MRP runs at scheduled time every day to generate Purchase Orders and Manufacturing Orders • Sub-Contracting Management • Credit Limit Control – Will not process Sales Order if exceeds Credit Limit • Built in eMail Solution for Sales Order Confirmation to Customers and Purchase Orders to Vendors • Functionality of Item where used in BOM • Purchase Order – Scheduled Delivery Dates – defined as required by the business • Inventory Planning & Stock Levels Monitoring @ real time • Management of Sales & Purchase Price Lists (more than 20 as required by business) • Item Ageing with Qty and Value – Helps to track Non-Moving Items • Status of Sale Orders @ each stage of order processing till invoice payments • After Sales – Customer Service Tracking
Few of Key Solutions.. Delivered • Multi Currency in Invoice • Indian Tax Structures (Excise, VAT, CST, ST with combinations) and related reports • ‘C’ Form Functionalities • Customer Ageing with Ledger Reports • Customer based Tax Structure • General Ledgers as required by business • Cheque Printing • Product Master Data with Labeling & Product Categorization and Monitoring • Monitoring New Product development and R&D through Project Management with Cost Monitoring • Cost Center defined as business required with receivables monitoring.
The Challenges Faced • Scope Finalization • Co-ordination with multiple teams (Functional Areas) • Meeting CTQs • New technology introduction – Open Source • Co-ordination with multiple projects • Change management • Testing Bottom Line • User acceptance • Project Went Live by 2 Months Time Gap • 245 Requirements delivered • 80% of CTQs Met • No Parallel Entry / Entry in 2 Systems • Successfully Closed the FY 2010-11 in OpenERP • Trident - migrated to OpenERP 6.0.3 – Feb 2012
Discussions..?
Thanks

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ERP Implementation cycle

  • 1. ERP Implementation Life Cycle A MS Rajesh Kanna rajesh@itarait.com
  • 2. To Discuss • Enterprise Resource Planning System • ERP Implementation Life Cycle – Methodology – Critical Success Factor – Critical Failure Factor – Challenges • ERP Case Study – Experience Sharing • Discussions
  • 4. Evolution of ERP Inventory Production 1960 MRP Purchasing Scheduling Finance 1970 MRP MRP II Labour All Internal 1980 MRP II ERP Resources Internal 1990 ERP Customers & Internal SCM Suppliers External Extended Internal 2000 Customers & SCM ERP/SCM Suppliers 2010 ? TIME
  • 5. ERP is the integrated IT platform for the business
  • 6. Business Processes Traditional Approach is Function Specific like Sales – Dispatch - Purchase – Stores – Production - Accounts Modern Approach is based on Business Process - interlinking Departments • Order To Cash • Indent to Pay • Production - Planning to Execution to Warehouse • Maintenance – Planning to Execution • Customer / Supplier Relationship Management • Products – Concept – Design & Development to Market • Human Capital – Hire to Retire • Fixed Asset – Life Cycle • Accounting Cycle
  • 7. Business Processes in ERP Quality Cycle Maintenance Cycle Production Cycle Sales Forecast – Confirmed Receive Indents / Plans – Order – FG Shipping Issue Materials Revenue Expenditure Cycle Cycle ERP System Accounting Customer Enquiry – Order Booking – Dispatch – Cycle Indents – Procurement – Invoice - Invoice Processing
  • 8. Implementing ERP System – Project Management Methodology Challenges Critical Success Factor Critical Failure Factor
  • 9. Implementing ERP System Methodology What is ..? Why it is required..? Benefits..?
  • 10. Fundamentals • What is a Project ? • A project is a temporary endeavor undertaken to create a unique product or service. • What is Project Management ? • Project Management is the application of knowledge, skills, tools and techniques to project activities in order to meet or exceed stakeholder needs and expectations. • Project Management Methodology • To provide a standard management approach and guidelines to ensure that projects are developed in a disciplined, well-managed, and consistent manner that promotes the delivery of quality products and results in projects that are completed on schedule and within budget. • Success Criteria for a Project? • Does the implemented system/product meet the defined business goals and objectives..? • Does the project meet the documented requirement specifications..? • Was it completed on time and within the approved budget..?
  • 11. Dimensions of Project Management Life Cycle Process Knowledge 1. Definition 1. Initiate 1. Integration 2. Requirements 2. Plan 2. Scope 3. Analysis 3. Execute 3. Time 4. Design 4. Control 4. Cost 5. Development 5. Closure 5. Quality 6. Testing 6. Human Resource 7. Implementation 7. Communication 8. Risk 9. Procurement Source
  • 12. ITARA’s Implementation Methodology Extended Implementation Diagnostic Analysis Pre-Implementation Design Development Implementation Deployment Support Post-Implementation
  • 13. Pre-Implementation • Conduct Process and System SDD Sign-Off Study • Conduct Kick- Off Meeting • Project Team Formation • Fixing Roles and System Study • Project Responsibility Preparation • Preliminary Kick-Off Meeting Discussions Project Organization • Solution Design Document Preparation • Discussion Project Plan • Sign-Off
  • 14. Implementation • Conduct CRP Go-Live • Course Corrections • Conduct Module Testing and User Acceptance Testing • Start Configuring Modules and Data SDD Processes • Master Data Migration Collection – Training Scanning - Upload • Setting Up Servers, CRP Connectivity • Perform Data etc Migration Modules Activities Configuration • Ensure Go Live • Conduct User Day-1 Reports Master Data Training and Evaluate Training Feed Infrastructure Back
  • 15. Post Implementation • Confirm Project Completion • Sign-Off • Provide Support till Warranty expires • Log Post Live Issues • Review and Resolve Issues • Establish Help Desk Function Completion • Appoint CRM Support Team Warranty Support Post Live Issues Help Desk
  • 16. Deliverables • MoM - Kick-Off Meeting • Project Plan • Master Data Template • Solution Design Documents for • High Level and Business Processes wise • Module Deliveries • Day One Reports • MIS Reports • As agreed in Solution Design Document • Closure of Issue Logs
  • 17. Implementing ERP System Challenges Risks Communication Alignment – Board Room to Stock Room Change Management Resistance to Adoption Knowledge Gaps – User / Consultant User doesn’t know what he wants & Consultant doesn't know how to give - Infrastructure Getting Sign-Off Expectation and Delivery Gap ….
  • 19. Implementing ERP System - CSF • Leadership commitment • Communication • Professional project management • Phased implementation approach • Scope management • Business transformation and change management • Removal of cross functional barriers • Job-specific end-user training • Members from Board Room to Stock Room know their roles and responsibilities. • Focused issue resolution • Post implementation support
  • 20. Implementing ERP System - CFF • ERP System Misfit • High Turnover Rate of Project Team • Over-Reliance of Heavy Customization • Poor Consultant Effectiveness • Poor IT Infrastructure • Poor Knowledge Transfer • Poor Project Management Effectiveness • Poor Quality of Business Process Re-Engineering • Poor Quality of Testing • Poor Top Management Support • Too Tight Project Schedule • Unclear Concept of the Nature and Use of ERP System – from user’s point • User Resistance to Change
  • 22. Client Environment • Trident Pneumatics is one of the leading industry in manufacturing critical compressed air solutions. • They are largest exporters of compressed air treatment products in India. • Human capital size in the company is around 100. • The company was using a Indian accounting software to manage their accounts and were evaluating many ERP applications to consolidate the data & process integrity between the departments. • The company also has tried with 3 ERP Implementation in earlier times.
  • 23. Business Need • Trident Pneumatics planned to go for ERP Implementation and the management was in a favour of implementing a proven Open Source ERP Application. There fore ITARA suggested OpenERP as recommended Solution. Trident has the following business needs to be sorted out in ERP. • Required to Streamline and automate the interlinked business processes and to get real-time and accurate MIS by implementing OpenERP System • Required to maintain complete and accurate master data (Customer, Vendor, Price Lists, Products,BOMs, Work Center etc) • Required to have Better Inventory Management • Expectation to have Optimized Production Planning and Control • Need to maintain SOD and Data Access Controls at all levels of User Group • Need to tightly integrate “Order to Cash” , “Procure to Pay “ , “Production Planning to Execution “ processes • Need to monitor Real Time Financial MIS, Payables and Receivables etc. • The company was using a Indian accounting software to manage their accounts and were evaluating many ERP applications to consolidate the data & process integrity between the departments.
  • 24. The Implementation • About project – Goal: Role out Single ERP Team application to service the global ◦ Steering Committee - Trident customers. ◦ Core Team - Trident – Retire the legacy Application. – Users CTQ’s to be met ◦ Application User Team - Trident ◦ Functional Team - ITARA • Methodology ◦ Project Leader – Water Fall ◦ Functional Consultants ◦ OpenERP Developer • Users – 15 Business Users ◦ Tiny ERP Support – 15 Project Users - R&D – 10 CRM Users Time line ◦ 4 Months (P) / 6 Months (A) • Location – Multiple location - HQ in Coimbatore Support – User across India ◦ Off-Site / Remote Login
  • 25. OpenERP Solutions ITARA started the ERP Implementation with APA Gap Analysis to find the Pain Areas and Opportunity for process improvements. Implementation is as below • Product: OpenERP 5.0.14 • Sector: Discrete Manufacturing • Modules Implemented • Sales Management • Service & Support • Purchase Management • Warehouse Management • Manufacturing • Project Management • HR Management • Accounting
  • 26. Few of Key Solutions.. Delivered • MRP runs at scheduled time every day to generate Purchase Orders and Manufacturing Orders • Sub-Contracting Management • Credit Limit Control – Will not process Sales Order if exceeds Credit Limit • Built in eMail Solution for Sales Order Confirmation to Customers and Purchase Orders to Vendors • Functionality of Item where used in BOM • Purchase Order – Scheduled Delivery Dates – defined as required by the business • Inventory Planning & Stock Levels Monitoring @ real time • Management of Sales & Purchase Price Lists (more than 20 as required by business) • Item Ageing with Qty and Value – Helps to track Non-Moving Items • Status of Sale Orders @ each stage of order processing till invoice payments • After Sales – Customer Service Tracking
  • 27. Few of Key Solutions.. Delivered • Multi Currency in Invoice • Indian Tax Structures (Excise, VAT, CST, ST with combinations) and related reports • ‘C’ Form Functionalities • Customer Ageing with Ledger Reports • Customer based Tax Structure • General Ledgers as required by business • Cheque Printing • Product Master Data with Labeling & Product Categorization and Monitoring • Monitoring New Product development and R&D through Project Management with Cost Monitoring • Cost Center defined as business required with receivables monitoring.
  • 28. The Challenges Faced • Scope Finalization • Co-ordination with multiple teams (Functional Areas) • Meeting CTQs • New technology introduction – Open Source • Co-ordination with multiple projects • Change management • Testing Bottom Line • User acceptance • Project Went Live by 2 Months Time Gap • 245 Requirements delivered • 80% of CTQs Met • No Parallel Entry / Entry in 2 Systems • Successfully Closed the FY 2010-11 in OpenERP • Trident - migrated to OpenERP 6.0.3 – Feb 2012