Business Accent

Moving outside the ERP comfort zone

An efficient approach to the implementation of an ERP solution is all about choosing the right methodology from those available.

Ipshita Basu Guha

Enterprise resource planning application is all-encompassing in nature as the name suggests. Ideally, it touches each and every aspect of a business which decides to procure and implement it. The reason to implement ERP is to induce efficiency and effectiveness while conducting business. It is also the time for change, renovation and remodelling of business processes, practices and systems. The implementation is a crucial step for an organisation as well as a vendor. It is the time to move out of your comfort zone and tread the unknown.

A shallow or inefficient approach to implementation could lead to overshooting the budget and time-frame. In a worst case scenario the entire application might have to be written off if it failed to deliver the goods. Yes, it has happened in some big implementations where a company had to write off as much as $49.5 million of ERP investment! But who is responsible for the failure— people, processes or the product? A good well-thought of implementation methodology ensures that we evade many of these pitfalls though not all.

In this article we will try to look at the various classes of implementation and the various methodologies adopted by organisations.

Implementation is execution

In the above context it is all about executing right with regard to how an application should work for you. Everything prior to the implementation stage is all about evaluation, negotiation and purchase. Once you have got the product then the actual odyssey begins. Implementation kickstarts the process of stretching outside your comfort zone to achieve the goals of the organisation, function and self. It is a combination of both science and art. There is no chart available like the periodic table to slot all elements in one segment or the other. The level and complexity of implementation will depend on the various metrics—a system of related measures that facilitates the quantification of some particular characteristic. What are the circumstances in which we are implementing the application? Here are some of the probable questions that we should try to answer:

• What is the business of the organisation?
• Is it a new industry and a first-time implementation or there have been earlier cases?
• Will it consist of only few selected modules? Or the entire gamut of features?
• Is the implementation restricted to only one location, multiple locations in one country or multiple locations across the globe?
• What is the product that we are going to implement?
• Are we part of a larger organisation which already has some application in place and we will be connecting to them in a hub-and-spoke format?
• What is the level of customisation that we plan to carry out?
• Do we have a legacy system in place or is this a Greenfield implementation?
• Do we have any instance of a failed implementation in the organisation?

A deeply introspective answer to the above queries will give you some idea of how to move ahead.

Categories of Implementation

Let us briefly look into the various categories of implementation.

Big-bang Approach: This category of implementation encompasses all modules across the entire organisation simultaneously. This is an ambitious way of implementing any application and can lead to possible failures or delay. Detailed Business Process Re-engineering (BPR) will be required in this case to streamline processes across the organisation since all of them will now get interconnected and have to follow a single system. Large amount of resources will be involved and chances of failure are higher. Nowadays this method is not heard of much though in a clean organisation with no prior history of any ERP or computerised application it can work.

Basic: This is one of the easiest forms where only core modules of the product are implemented at one central site. Once this becomes functional and successful then other related sites start connecting to it in a hub-and -spoke manner. Conservative organisations would prefer to implement at one site, evaluate the output and then proceed to make further investments.

Middle Approach: This is a combination of the above two categories. It involves implementation of core modules across all sites of the organisation. The risks are of course with more need for BPR but it helps in standardising core activities across the organisation. Functions like inventory management, ordering, accounting and payroll are essential and cannot be done with too many permutations and combinations. Hence, it is easiest to automate these processes for all locations.

Modular: Like the term suggests implementing each module of the product sequentially so that the flow of data can be demonstrated to the concerned functions. It helps in explaining users how the system integrates each function and the role of each user on the whole. It is helpful in fresh implementations where people have none or limited exposure to integrated systems.

Process-based Approach: This would be a preferred approach over modular one. This involves automating entire processes at one go. For example we can automate the ordering process which normally involves purchase, inventory and accounts. This leads to greater interaction between the three functions and an effective acceptable BPR can be done.

Methodology of Implementation

A methodology creates the roadmap for any category of implementation. It sets forth the steps and processes that should be followed to be successful. Let us see the logical steps in a normal methodology and how it is similar to the big three.

Planning and Preparation

The ERP vendor, implementation partner (if any) and the process owners should work out a detailed plan of metrics like kind of implementation, management of legacy data, and identification of advanced users, resource allocation etc. The planning should be detailed and the output of this stage normally would consist of a Gantt chart or Microsoft project document. This will act as the guiding light for navigation.

Resource Allocation

The necessary resources like hardware, networking equipment, manpower from each function, software, licences, and consultants should be procured / hired and put in place. An ERP vendor or implementation partner can give good advice about hardware and network facilities.

Process Design & Mapping

One of the most crucial phases is where the process owners and implementation consultants document the various processes of the organisation and map the same to the ERP product. Advanced users are educated and given basic training on the product and in return they help in the BPR activities. Test cases can be run at this stage to evaluate how the system behaves and to what degree it is acceptable. ERP implementation partners should document the final system requirements and deliverables and get a sign off from the organisation. This ensures seriousness and objectivity from both ends. This phase should be given due time and attention as the system blueprint is the output of this stage. It can make or break an implementation.

Data Management

Many companies already have existing data in legacy systems. They should be migrated to the new application. End-users should be made to run this system parallel to the current system to avoid massive surprises. Simulation and parallel run also allow the end-users to acclimatise themselves with their module and application on the whole. Companies also need to punch in some amount of the master data. The implementation consultants also configure the system as per the requirement in the previous stage which could involve minor security changes to reports and user interface creation.

Final check and Go-live

Finally, the requirements have been addressed, customisations have been done, user training has been conducted, parallel runs have been done and tested, all quality checks have been completed and it is the time to stop the old and click in the new. From this stage the organisation moves ahead with the new product and discontinues the old. Beyond this begins the post-implementation maintenance, fine tuning the system, and updating the patches. Organisations should conduct periodic refresher training for end–users to keep up the tempo.

There are three specific methodologies which are spoken of in the ERP community: AcceleratedSAP (ASAP)—SAP, The Total Solution—Ernst & Young, and the Fast-Track Workplan—Deloitte & Touche. The first one is an ERP vendor and the other two are consulting companies. All are pretty similar to each other.

The author works with a pharma company as Business Systems Analyst. The views expressed here are her own and not necessarily those of her employer. She may be reached at ipbasu@rediffmail.com