Is classroom study key to successful ERP implementation?
The introduction of Information Technology, especially enterprise systems such as
enterprise resource planning (ERP) systems, is a common way of implementing
organizational change today. Such enterprise system implementations frequently come
with new software systems and business processes that substantially alter workflow and
jobs.
While the annual investment of several millions of rupees in ERP systems is staggering,
estimates indicate that there could be chances of failures in implemented systems and
such failures have been observed even in highly successful organizations. Organizations
that successfully implement ERP systems, including new software and business
processes, have reported enormous benefits, such as greater efficiency and effectiveness
at the individual employee and organizational levels.
One of the primary causes of failure is the inability of managers to effectively manage the
change process. Managers frequently fail to consider the organizational environment and
culture relying, instead, on success stories of some organizations that used a big-bang
strategy, an implementation strategy in which all modules of an ERP system are
implemented simultaneously and in a short period time, to manage their own change. The
result can be catastrophic for firms, with consequences up to and including going out of
business as a result of a failed ERP implementation.
Given this backdrop, it is important to teach diverse aspects of ERP implementations to
make today's information systems and business management curricula relevant to
organizational practice. Yet, the effective integration of ERP related knowledge into
curricula continues to be a challenge with some suggesting that relevant knowledge
should be imparted in a wide range of classes. Of the many areas related to ERP
systems, the ability of students to understand that different strategies of ERP
implementation may be necessary in different scenarios is an important one, especially
for those who may go on to manage such implementations.
A "one-medicine-does-not-cure-all-ailments" argument goes well with when it comes to
ERP implementation strategies. Yet, mistakes and failures continue. Sorely needed is a
teaching approach that can open the eyes of managers, present and future, to the
different strategies to ERP success, and when a particular strategy is appropriate. With a
good teaching approach with minimum three cases of examples could help the student
identify the areas where a failure is bound to happen and may rectify it. It is also a must
that each student is assigned to read only one of the three cases, lessening the total
workload, but the students understand the differences in approaches and successes of
ERP implementations related to all three cases.
For more information kindly
visit:http://www.eresourceerp.com/study-key-to-successful-ERP-implementation.html
Or contact us at
TMA House, 1st Floor,Road No 16, Plot No. 6,Wagle Industrial Estate,Thane (West) 400 604, MaharashtraTel: +91 22 25827692 +91 22 25828775 +91 22 65130234e-mail (Sales): sales@eresourceerp.come-mail (Help Desk): helpdesk@eresourceerp.com
Wednesday, April 7, 2010
Saturday, April 3, 2010
Key to an ERP package
Basic ERP Features
COMPARING midmarket ERP packages is not exactly an apples-to-apples type of
exercise. Each vendor wraps its midmarket offering with different functionality, tailored to
the needs of the kinds of companies the solution is intended for and based on the
vendor's particular areas of expertise.
However, almost every midmarket ERP suite shares several common modules: BI, CRM,
financial management, HCM, manufacturing operations and SCM. The differences among
solutions tend to be quite granular within these modules. Also, even if different packages
offer the same feature - say, sales-order management - it might not be bundled in the
same module; some vendors include sales-order management in their CRM suites while
others package it in their SCM suites.
Key to an ERP package is tight integration between modules, so that all of the core
business modules are related. For instance, manufacturing operations are integrated with
customer service, logistics and delivery.
Business IntelligenceOne of the newer components of most modern midmarket ERP packages, BI shines a
bright light into the heart of a company's performance. In general, an ERP suite's
analytics or BI tools allow users to share and analyze the data that the ERP applications
collect from across the enterprise from a unified repository. The end result is more
informed decision making by everyone from executives to line managers to
human-resources professionals to accountants. A variety of automated reporting and
analysis tools can help streamline operations, as well as improve an organization's
business performance. With greater control and visibility of data across the enterprise,
business leaders can better align the company's operations with its overarching strategic
goals.
CRM (Customer Relationship Management)CRM has long been a core component of any ERP offering, giving manufacturers a way to
improve customer service by pulling together tools to fulfill customers' orders, respond to
customers' service needs, and often, create marketing campaigns to reach customers.
Most vendors include sales tools to provide customers with sales quotes, process their
orders and offer flexible pricing on their products. Another important CRM component is
service management, which may arm customer-service agents with scripts for talking to
customers, as well as allow them to authorize product returns and search a knowledge
base of support information. The third main component is usually marketing, which may
include tools to manage campaigns, create sales literature and develop a library of
marketing collateral.
Additionally, CRM often has tools for account management, SFA, and opportunity or lead
management, as well as self-service tools for customers and an e-commerce storefront
builder.
Financial ManagementOf all the ERP modules, the financials applications tend to be the most frequently
utilized. Across the board, these include general ledger, accounts receivable and
accounts payable, billing, and fixed asset management. Because many midmarket
companies deploy ERP to support efforts at breaking into global markets, it is imperative
that their ERP packages support multiple currencies and languages.
The financial-management applications may also include tools for creating and adhering
to budgets, cash-flow management, expense management, risk management and tax
management.
HCM (Human Capital Management)For the most part, the HCM module includes tools for human-resources management,
performance management, payroll, and time and labor tracking. Some vendors also
provide functionality for administering benefits, managing compensation, dealing with
salary taxes, recruiting new employees and planning workforce needs. Some also include
self-service tools for managers and employees.
Even though HCM is generally considered core ERP functionality, some vendors offer it
as an add-on module.
Manufacturing OperationsThe manufacturing module is where much product differentiation happens, including
industry-specific functionality. In general, these applications are intended to make
manufacturing operations more efficient and simple. Most vendors support different modes
of manufacturing, include configurable product capabilities, perform different types of job
costing and offer a BOM (bill of materials) tool.
Applications often include PDM (Product Data Management), CRP (Capacity
Requirements Planning), MRP (Materials Requirements Planning), forecasting, MPS
(Master Production Scheduling), work-order management and shop-floor control.
SCM (Supply Chain Management)Of all the ERP modules, SCM has the greatest variability between vendors: It is vast and
varied, yet often adapted to the needs of specific industries. In general, SCM improves the
flow of materials through an organization's supply chain by "managing planning,
scheduling, procurement, and fulfillment for optimum service levels and maximum
profitability," according to Lawson Software. Some vendors segment their SCM into
smaller modules. Oracle's JD Edwards, for instance, breaks it down into Supply Chain
Planning, Supply Chain Execution (Logistics) and Supply Management (Procurement).
SCM features tend to include also production scheduling, demand management,
distribution management, inventory management, warehouse management, procurement,
sourcing and order management.
For more information kindly visit:http://www.erppandit.com/erp-features.html
COMPARING midmarket ERP packages is not exactly an apples-to-apples type of
exercise. Each vendor wraps its midmarket offering with different functionality, tailored to
the needs of the kinds of companies the solution is intended for and based on the
vendor's particular areas of expertise.
However, almost every midmarket ERP suite shares several common modules: BI, CRM,
financial management, HCM, manufacturing operations and SCM. The differences among
solutions tend to be quite granular within these modules. Also, even if different packages
offer the same feature - say, sales-order management - it might not be bundled in the
same module; some vendors include sales-order management in their CRM suites while
others package it in their SCM suites.
Key to an ERP package is tight integration between modules, so that all of the core
business modules are related. For instance, manufacturing operations are integrated with
customer service, logistics and delivery.
Business IntelligenceOne of the newer components of most modern midmarket ERP packages, BI shines a
bright light into the heart of a company's performance. In general, an ERP suite's
analytics or BI tools allow users to share and analyze the data that the ERP applications
collect from across the enterprise from a unified repository. The end result is more
informed decision making by everyone from executives to line managers to
human-resources professionals to accountants. A variety of automated reporting and
analysis tools can help streamline operations, as well as improve an organization's
business performance. With greater control and visibility of data across the enterprise,
business leaders can better align the company's operations with its overarching strategic
goals.
CRM (Customer Relationship Management)CRM has long been a core component of any ERP offering, giving manufacturers a way to
improve customer service by pulling together tools to fulfill customers' orders, respond to
customers' service needs, and often, create marketing campaigns to reach customers.
Most vendors include sales tools to provide customers with sales quotes, process their
orders and offer flexible pricing on their products. Another important CRM component is
service management, which may arm customer-service agents with scripts for talking to
customers, as well as allow them to authorize product returns and search a knowledge
base of support information. The third main component is usually marketing, which may
include tools to manage campaigns, create sales literature and develop a library of
marketing collateral.
Additionally, CRM often has tools for account management, SFA, and opportunity or lead
management, as well as self-service tools for customers and an e-commerce storefront
builder.
Financial ManagementOf all the ERP modules, the financials applications tend to be the most frequently
utilized. Across the board, these include general ledger, accounts receivable and
accounts payable, billing, and fixed asset management. Because many midmarket
companies deploy ERP to support efforts at breaking into global markets, it is imperative
that their ERP packages support multiple currencies and languages.
The financial-management applications may also include tools for creating and adhering
to budgets, cash-flow management, expense management, risk management and tax
management.
HCM (Human Capital Management)For the most part, the HCM module includes tools for human-resources management,
performance management, payroll, and time and labor tracking. Some vendors also
provide functionality for administering benefits, managing compensation, dealing with
salary taxes, recruiting new employees and planning workforce needs. Some also include
self-service tools for managers and employees.
Even though HCM is generally considered core ERP functionality, some vendors offer it
as an add-on module.
Manufacturing OperationsThe manufacturing module is where much product differentiation happens, including
industry-specific functionality. In general, these applications are intended to make
manufacturing operations more efficient and simple. Most vendors support different modes
of manufacturing, include configurable product capabilities, perform different types of job
costing and offer a BOM (bill of materials) tool.
Applications often include PDM (Product Data Management), CRP (Capacity
Requirements Planning), MRP (Materials Requirements Planning), forecasting, MPS
(Master Production Scheduling), work-order management and shop-floor control.
SCM (Supply Chain Management)Of all the ERP modules, SCM has the greatest variability between vendors: It is vast and
varied, yet often adapted to the needs of specific industries. In general, SCM improves the
flow of materials through an organization's supply chain by "managing planning,
scheduling, procurement, and fulfillment for optimum service levels and maximum
profitability," according to Lawson Software. Some vendors segment their SCM into
smaller modules. Oracle's JD Edwards, for instance, breaks it down into Supply Chain
Planning, Supply Chain Execution (Logistics) and Supply Management (Procurement).
SCM features tend to include also production scheduling, demand management,
distribution management, inventory management, warehouse management, procurement,
sourcing and order management.
For more information kindly visit:http://www.erppandit.com/erp-features.html
aspects of running a business
ERP Benefits: ERP helps midmarket businesses
BUSINESSES all around the world are increasing their reliance on ERP systems as a
cost efficient alternative to their software applications. However, high cost involved in
deployment of this marvelous technology prevents the small/mid size organizations enjoy
the tremendous benefits of ERP. Since the introduction of an affordable, low-cost ERP
from eresource ERP, many of the midmarket organizations also started to administer
their businesses effectively using this latest technology.
An ERP package should provide an organization with a solid foundation, incorporating all
of the fundamental aspects of running a business. Expectations run high when an
organization deploys an ERP package - if the solution is a good fit for the company, the
company stands to gain tremendous cost savings and service improvements across the
enterprise.
Manual processes are automated, production scheduling is more efficiently managed and
inventory is more accurately assessed. Also, business performance can be measured in
a much more holistic fashion than ever before. This gives executives real-time visibility
into all business processes, enabling them to make better strategic decisions. In short,
with the right ERP package, a midmarket company can compete more aggressively in
global markets.
According to a survey an ERP implementation can reduce costs in three primary
categories: inventory costs, manufacturing operating costs and administrative costs. The
survey's best-in-class respondents reported a 21 percent decrease in inventory costs, a
17 percent decrease in manufacturing operating costs and a 16 percent decrease in
administrative costs. The average respondents' reductions were 11 percent, 8 percent and
9 percent, respectively.
Because an ERP solution has its fingers in all aspects of running a business, its benefits
are myriad and go beyond tangible cost reductions. It can improve an organization's
customer service and response time when solving issues. It can solve issues of
interoperability among multiple manufacturing locations. It can standardize and accelerate
manufacturing processes in all of a company's manufacturing sites.
It can streamline a manufacturer's order-fulfillment processes. It can facilitate connecting
with partners' and suppliers' enterprise systems. ERP can even help an organization
maintain compliance with government regulations, from hiring practices to environmental
laws.
Case studies done on specific ERP implementations reveal a variety of different
business-specific benefits. One of the case studies revealed that by replacing legacy
systems with an integrated ERP package, one travel-accessories manufacturer reduced
its inventory levels by 30 percent, reduced its warehouse space requirements by 38
percent, improved its month-end close process by five days, reduced its DSO (Days
Sales Outstanding) by 44 percent and increased sales by 100 percent without hiring new
employees.
For more information kindly visit:http://www.erppandit.com/erpbenefits.html
BUSINESSES all around the world are increasing their reliance on ERP systems as a
cost efficient alternative to their software applications. However, high cost involved in
deployment of this marvelous technology prevents the small/mid size organizations enjoy
the tremendous benefits of ERP. Since the introduction of an affordable, low-cost ERP
from eresource ERP, many of the midmarket organizations also started to administer
their businesses effectively using this latest technology.
An ERP package should provide an organization with a solid foundation, incorporating all
of the fundamental aspects of running a business. Expectations run high when an
organization deploys an ERP package - if the solution is a good fit for the company, the
company stands to gain tremendous cost savings and service improvements across the
enterprise.
Manual processes are automated, production scheduling is more efficiently managed and
inventory is more accurately assessed. Also, business performance can be measured in
a much more holistic fashion than ever before. This gives executives real-time visibility
into all business processes, enabling them to make better strategic decisions. In short,
with the right ERP package, a midmarket company can compete more aggressively in
global markets.
According to a survey an ERP implementation can reduce costs in three primary
categories: inventory costs, manufacturing operating costs and administrative costs. The
survey's best-in-class respondents reported a 21 percent decrease in inventory costs, a
17 percent decrease in manufacturing operating costs and a 16 percent decrease in
administrative costs. The average respondents' reductions were 11 percent, 8 percent and
9 percent, respectively.
Because an ERP solution has its fingers in all aspects of running a business, its benefits
are myriad and go beyond tangible cost reductions. It can improve an organization's
customer service and response time when solving issues. It can solve issues of
interoperability among multiple manufacturing locations. It can standardize and accelerate
manufacturing processes in all of a company's manufacturing sites.
It can streamline a manufacturer's order-fulfillment processes. It can facilitate connecting
with partners' and suppliers' enterprise systems. ERP can even help an organization
maintain compliance with government regulations, from hiring practices to environmental
laws.
Case studies done on specific ERP implementations reveal a variety of different
business-specific benefits. One of the case studies revealed that by replacing legacy
systems with an integrated ERP package, one travel-accessories manufacturer reduced
its inventory levels by 30 percent, reduced its warehouse space requirements by 38
percent, improved its month-end close process by five days, reduced its DSO (Days
Sales Outstanding) by 44 percent and increased sales by 100 percent without hiring new
employees.
For more information kindly visit:http://www.erppandit.com/erpbenefits.html
Enterprise has an impact in his cumulative performance results
ERP Concept
IN today's competitive world many major companies have decided to use a popular tool that has evolved over the past few decades. ERP, the descendant of MRPII offers the "answer" to the economic and productivity troubles of manufacturing and service enterprises. Thus, the ERP system has become very popular as an enterprise management software tool.
In order for a software system to be considered ERP, it must provide an organization with functionality for two or more systems. While some ERP packages exist that only cover two functions for an organization (QuickBooks: Payroll & Accounting), most ERP systems cover several functions.
The term ERP originally referred to how a large organization planned to use organizational wide resources. In the past, ERP systems were used in larger more industrial types of companies. However, the use of ERP has changed and is extremely comprehensive, today the term can refer to any type of company, no matter what industry it falls in. In fact, ERP systems are used in almost any type of organization - large or small.
ERP systems today can cover a wide range of functions and integrate them into one unified database. For instance, functions such as Human Resources, Supply Chain Management, Customer Relations Management, Financials, Manufacturing functions and Warehouse Management functions were all once stand alone software applications, usually housed with their own database and network, can now fit under one umbrella
As in any integrated System or Unit, the performance of each one of the parts of an Enterprise has an impact in his cumulative performance results. Specifically, we can say that a 95% performance in independent vital enterprise elements (Item master, Bills of Materials, Production Master Schedule Adherence, Inventories Accuracy, Production Orders Accuracy and Purchase Orders Accuracy), will reflect a cumulative 75% in a ERP environment. This means a percentage of failure possible in productivity terms. Here is where we should support and combine this useful tool with a business strategy based on the desired administration tendency or theory.
On this sense, it is vital to note the point on administration before deciding which ERP software is the one you will be using, you need to have solid administration principles (no matter which administration tendencies you decide to choose) and strong knowledge of ERP methodology.
This will translate into synergy between areas that will allow organizations to have highly effective processes with a continuous success. Only by creating a deep understanding of this philosophy you will have the certainty of obtaining the best results, as well as being in position to face and take proactive actions for any obstacle you could find in the road. If you have not this reference point, your efforts will deliver the wrong results.
For more information kindly
visit:http://www.erppandit.com/erpconcept.html
IN today's competitive world many major companies have decided to use a popular tool that has evolved over the past few decades. ERP, the descendant of MRPII offers the "answer" to the economic and productivity troubles of manufacturing and service enterprises. Thus, the ERP system has become very popular as an enterprise management software tool.
In order for a software system to be considered ERP, it must provide an organization with functionality for two or more systems. While some ERP packages exist that only cover two functions for an organization (QuickBooks: Payroll & Accounting), most ERP systems cover several functions.
The term ERP originally referred to how a large organization planned to use organizational wide resources. In the past, ERP systems were used in larger more industrial types of companies. However, the use of ERP has changed and is extremely comprehensive, today the term can refer to any type of company, no matter what industry it falls in. In fact, ERP systems are used in almost any type of organization - large or small.
ERP systems today can cover a wide range of functions and integrate them into one unified database. For instance, functions such as Human Resources, Supply Chain Management, Customer Relations Management, Financials, Manufacturing functions and Warehouse Management functions were all once stand alone software applications, usually housed with their own database and network, can now fit under one umbrella
As in any integrated System or Unit, the performance of each one of the parts of an Enterprise has an impact in his cumulative performance results. Specifically, we can say that a 95% performance in independent vital enterprise elements (Item master, Bills of Materials, Production Master Schedule Adherence, Inventories Accuracy, Production Orders Accuracy and Purchase Orders Accuracy), will reflect a cumulative 75% in a ERP environment. This means a percentage of failure possible in productivity terms. Here is where we should support and combine this useful tool with a business strategy based on the desired administration tendency or theory.
On this sense, it is vital to note the point on administration before deciding which ERP software is the one you will be using, you need to have solid administration principles (no matter which administration tendencies you decide to choose) and strong knowledge of ERP methodology.
This will translate into synergy between areas that will allow organizations to have highly effective processes with a continuous success. Only by creating a deep understanding of this philosophy you will have the certainty of obtaining the best results, as well as being in position to face and take proactive actions for any obstacle you could find in the road. If you have not this reference point, your efforts will deliver the wrong results.
For more information kindly
visit:http://www.erppandit.com/erpconcept.html
relational database management systems
Set targets, establish budget and make it happen
This is the second part of article on Success factors of an ERP implementation. We are sure this series of articles will guide our readers make their ERP system work effectively and successfully.
Make ERP-related decisions quickly: How about a rule that all decisions must be made within three days? This may seem arbitrary, but setting a fast and deliberate implementation pace is critical. Experience has shown that when an ERP project stretches more than 10-12 months, it is at risk - mostly because key team members move on.
Put the very best people on the implementation team: The natural tendency is to staff projects with people who are the most available. But these people may not have the skills or process knowledge required to get the job done. This is complex stuff. An ERP project will require the best talent that you have. And if you assign only part-time talent, then work gets prolonged and the project is at risk. ERP work is not just a project. It is the beginning of a continuous improvement process. There are at least five years of benefits to get out of any ERP implementation.
Phased approach: It is important to break as ERP project down to manageable pieces by setting up pilot programs and short-term milestones. Depending on the IT experience, some organizations choose the easiest piece as the pilot project, while others may implement a mission-critical application first. The pilot project can both demonstrate the benefits of ERP and help gain hands-on ERP implementation experience.
Data conversion: Second generation ERP systems use relational database management systems (RDMBS) to store enterprise data. If large amounts of data are stored in other database systems or in different data formats, data conversion is a daunting task, which is often underestimated in ERP implementation. A two-hour data conversion task could be turned into a two-month effort as a result of the DBA group's lack of technical experience and the management's incompetence or ignorance.
Organization commitments: The involvement of ERP implementation goes far beyond the IT department to many other functional departments. The commitment and smooth coordination from all parties is the key to the success of ERP project. The commitments come from the understanding of how ERP can benefit each functional department. For example, if the warehouse staff is not completely sold on the benefits of the inventory control module, they may not input the kind of usage data that is essential to the project's success.
Create partnership between your software vendor and your stakeholders: While this concept may seem obvious, it has been found that the vendor-client relationship is often contentious and sometimes outright hostile. This fact is particularly true if the organization is severely divided regarding the choice of vendor software. As problems arise during implementation, and they will arise, the blame game often begins. Before long, the project evolves into a standoff with neither vendor nor client willing to admit fault. A third-party project director or manager is often the best solution for this dilemma. This person can usually serve as an objective mediator to bring the parties together, finding solutions, rather than allowing the project to slow down to a crawl.
Sell, sell, and continue to sell the ERP to your stakeholders: Implementing ERP systems are extremely complex and take months or even years, to implement it. If your stakeholders understand the long-term benefits of the system, they are much more willing to accept any perceived temporary steps backward.
Build and leverage process expertise: Process focus is if anything, more important after going live since the company now has an even greater core of process expertise. Successful companies fully capitalize on this expertise and the power of ERP-enabled process. One way is by sending process experts from the implementation team back into the organization, or by having some serve at centers of excellence, some as key process performers and some as business managers. Successful companies never forget the point of the integrated enterprise - that it is not about ERP so much as it is about people involved in ERP-enabled processes.
Adequately resource your project: Ensure that replacements are in place to release key team participants. The people who do the daily work of running functional departments are the same people who will be essential to implementing an ERP system. No surprise. The people with the most knowledge will be needed for the majority of the project. Priorities will conflict between the demands of the office and demands of the project. The most effective solution we have seen is hiring or contracting with additional resources to serve as backfill for key office personnel. Admittedly a new resource cannot do everything that an experienced resource normally does; however, the replacement can handle routine work and coordinate with the experienced person for critical decision.
Define metrics and manage them: Successful companies set targets, establish budgets and make it happen - especially after gong live. On the other hand, after seeing head-counts fall and inventory shrink to more efficient levels, less successful companies can see these giants reversed if they do not continue to decline metrics and stick to them.
For more information kindly
visit:http://www.erppandit.com/Set-targets-establish-budget-and-make-it-happen.html
This is the second part of article on Success factors of an ERP implementation. We are sure this series of articles will guide our readers make their ERP system work effectively and successfully.
Make ERP-related decisions quickly: How about a rule that all decisions must be made within three days? This may seem arbitrary, but setting a fast and deliberate implementation pace is critical. Experience has shown that when an ERP project stretches more than 10-12 months, it is at risk - mostly because key team members move on.
Put the very best people on the implementation team: The natural tendency is to staff projects with people who are the most available. But these people may not have the skills or process knowledge required to get the job done. This is complex stuff. An ERP project will require the best talent that you have. And if you assign only part-time talent, then work gets prolonged and the project is at risk. ERP work is not just a project. It is the beginning of a continuous improvement process. There are at least five years of benefits to get out of any ERP implementation.
Phased approach: It is important to break as ERP project down to manageable pieces by setting up pilot programs and short-term milestones. Depending on the IT experience, some organizations choose the easiest piece as the pilot project, while others may implement a mission-critical application first. The pilot project can both demonstrate the benefits of ERP and help gain hands-on ERP implementation experience.
Data conversion: Second generation ERP systems use relational database management systems (RDMBS) to store enterprise data. If large amounts of data are stored in other database systems or in different data formats, data conversion is a daunting task, which is often underestimated in ERP implementation. A two-hour data conversion task could be turned into a two-month effort as a result of the DBA group's lack of technical experience and the management's incompetence or ignorance.
Organization commitments: The involvement of ERP implementation goes far beyond the IT department to many other functional departments. The commitment and smooth coordination from all parties is the key to the success of ERP project. The commitments come from the understanding of how ERP can benefit each functional department. For example, if the warehouse staff is not completely sold on the benefits of the inventory control module, they may not input the kind of usage data that is essential to the project's success.
Create partnership between your software vendor and your stakeholders: While this concept may seem obvious, it has been found that the vendor-client relationship is often contentious and sometimes outright hostile. This fact is particularly true if the organization is severely divided regarding the choice of vendor software. As problems arise during implementation, and they will arise, the blame game often begins. Before long, the project evolves into a standoff with neither vendor nor client willing to admit fault. A third-party project director or manager is often the best solution for this dilemma. This person can usually serve as an objective mediator to bring the parties together, finding solutions, rather than allowing the project to slow down to a crawl.
Sell, sell, and continue to sell the ERP to your stakeholders: Implementing ERP systems are extremely complex and take months or even years, to implement it. If your stakeholders understand the long-term benefits of the system, they are much more willing to accept any perceived temporary steps backward.
Build and leverage process expertise: Process focus is if anything, more important after going live since the company now has an even greater core of process expertise. Successful companies fully capitalize on this expertise and the power of ERP-enabled process. One way is by sending process experts from the implementation team back into the organization, or by having some serve at centers of excellence, some as key process performers and some as business managers. Successful companies never forget the point of the integrated enterprise - that it is not about ERP so much as it is about people involved in ERP-enabled processes.
Adequately resource your project: Ensure that replacements are in place to release key team participants. The people who do the daily work of running functional departments are the same people who will be essential to implementing an ERP system. No surprise. The people with the most knowledge will be needed for the majority of the project. Priorities will conflict between the demands of the office and demands of the project. The most effective solution we have seen is hiring or contracting with additional resources to serve as backfill for key office personnel. Admittedly a new resource cannot do everything that an experienced resource normally does; however, the replacement can handle routine work and coordinate with the experienced person for critical decision.
Define metrics and manage them: Successful companies set targets, establish budgets and make it happen - especially after gong live. On the other hand, after seeing head-counts fall and inventory shrink to more efficient levels, less successful companies can see these giants reversed if they do not continue to decline metrics and stick to them.
For more information kindly
visit:http://www.erppandit.com/Set-targets-establish-budget-and-make-it-happen.html
Success factors of an ERP implementation
ERP is not 'everything for everybody' solution
This is the third part of article on Success factors of an ERP implementation. We are sure
this series of articles will guide our readers make their ERP system work effectively and
successfully.
Communicate and manage expectations at go-live: Many stakeholders in the organization
expect the ERP to be an 'everything for everybody' solution. Even in the best-case
scenario, this is rarely true. And inevitably, some functionality must often be re-scheduled
into a post "go-live" phase. All of this combined could crate disillusionment with the new
system. If the project teams are struggling to meet deadlines, they may have to make
decisions on the functionality that needs to be delayed in order to meet the original
"go-live" date and avoid delays. These decisions must be communicated and "sold" in the
stakeholders to ensure expectations are effectively managed. The organization needs to
know what will be in place at "go-live" and when they can expect the additional
functionality.
Extend capabilities beyond the ERP foundation: As a backbone technology, ERP delivers
more powerful benefits when companies do their utmost to build on that platform. In doing
so, successful companies turn to a host of complementary applications that generate
ROI, from advanced planning and scheduling to warehouse management to sales force
automation. Successful companies also pay closer attention to the constant stream of
innovative new solutions developed by today's software developers like CRM, SCM, BI,
etc.
Ensure the project has sufficient budget: What project teams feel they have enough
money budgeted for their projects? The perception of not enough funds is likely to be even
greater in a project with the complexity of an ERP. Careful planning during the budgeting
process helps project teams make better decision on timing and allocation of resources.
If budgets are not sufficient to support the deadlines, project resources find themselves
working extensive overtime and under constant pressure. Ultimately, morale disintegrates
along with the quality of work. If counter measures are not implemented the image of the
entire. ERP system could suffer not only during implementation, but also long after
go-live.
Encourage functional ownership of the project: Doing project work is a way of life for most
IT departments, while functional departments typically have little or no experience with
projects the size of ERP implementations. So, many organizations choose to let IT lead
the ERP implementation. Rarely is this decision successful. In the long term, the
functional departments with own the ERP. Hence, they must establish the rules that
govern system functionality; learn how the system will handle business processes within
their departments and be able to obtain information by on-line inquiry or by creating their
own reporting. This ownership should be in place at the start of the implementation
project.
Develop dependency-driven project schedules that can be tracked and managed to
provide early warnings and help avoid crises: Successful ERP project implementation
have well planned project schedules. These schedules are not built from a desired end
date. Instead, they are built with a realistic view of the amount of time needed for the
various tasks. These tasks are lined with clear dependencies - what must happen before
a task can begin. With a schedule, you can track and manage your progress throughout
the project. Most importantly, a well-designed project schedule can provide early warnings
of problems.
Implement pre-project readiness assessment and overall project planning: Most
organizations have never been involved in a project as complex and cross-functional as an
ERP implementation. Additionally, an ERP project requires near full-time participation. A
readiness assessment conducted prior to the project kick-off can help identify areas of
strength and potential problem areas in need of improvement. This information is
extremely helpful when planning the project budget and the project tasks. For more information kindly
visit:http://www.erppandit.com/ERP-is-not-everything-for-everybody-solution.html
This is the third part of article on Success factors of an ERP implementation. We are sure
this series of articles will guide our readers make their ERP system work effectively and
successfully.
Communicate and manage expectations at go-live: Many stakeholders in the organization
expect the ERP to be an 'everything for everybody' solution. Even in the best-case
scenario, this is rarely true. And inevitably, some functionality must often be re-scheduled
into a post "go-live" phase. All of this combined could crate disillusionment with the new
system. If the project teams are struggling to meet deadlines, they may have to make
decisions on the functionality that needs to be delayed in order to meet the original
"go-live" date and avoid delays. These decisions must be communicated and "sold" in the
stakeholders to ensure expectations are effectively managed. The organization needs to
know what will be in place at "go-live" and when they can expect the additional
functionality.
Extend capabilities beyond the ERP foundation: As a backbone technology, ERP delivers
more powerful benefits when companies do their utmost to build on that platform. In doing
so, successful companies turn to a host of complementary applications that generate
ROI, from advanced planning and scheduling to warehouse management to sales force
automation. Successful companies also pay closer attention to the constant stream of
innovative new solutions developed by today's software developers like CRM, SCM, BI,
etc.
Ensure the project has sufficient budget: What project teams feel they have enough
money budgeted for their projects? The perception of not enough funds is likely to be even
greater in a project with the complexity of an ERP. Careful planning during the budgeting
process helps project teams make better decision on timing and allocation of resources.
If budgets are not sufficient to support the deadlines, project resources find themselves
working extensive overtime and under constant pressure. Ultimately, morale disintegrates
along with the quality of work. If counter measures are not implemented the image of the
entire. ERP system could suffer not only during implementation, but also long after
go-live.
Encourage functional ownership of the project: Doing project work is a way of life for most
IT departments, while functional departments typically have little or no experience with
projects the size of ERP implementations. So, many organizations choose to let IT lead
the ERP implementation. Rarely is this decision successful. In the long term, the
functional departments with own the ERP. Hence, they must establish the rules that
govern system functionality; learn how the system will handle business processes within
their departments and be able to obtain information by on-line inquiry or by creating their
own reporting. This ownership should be in place at the start of the implementation
project.
Develop dependency-driven project schedules that can be tracked and managed to
provide early warnings and help avoid crises: Successful ERP project implementation
have well planned project schedules. These schedules are not built from a desired end
date. Instead, they are built with a realistic view of the amount of time needed for the
various tasks. These tasks are lined with clear dependencies - what must happen before
a task can begin. With a schedule, you can track and manage your progress throughout
the project. Most importantly, a well-designed project schedule can provide early warnings
of problems.
Implement pre-project readiness assessment and overall project planning: Most
organizations have never been involved in a project as complex and cross-functional as an
ERP implementation. Additionally, an ERP project requires near full-time participation. A
readiness assessment conducted prior to the project kick-off can help identify areas of
strength and potential problem areas in need of improvement. This information is
extremely helpful when planning the project budget and the project tasks. For more information kindly
visit:http://www.erppandit.com/ERP-is-not-everything-for-everybody-solution.html
aggressive project management processes
Make the best use of consultants' knowledge
This is the fourth and final part of article on Success factors of an ERP implementation. We are sure this series of articles will guide our readers make their ERP system work effectively and successfully.
Implement aggressive project management processes: The magnitude of an ERP implementation requires aggressive and structured project management processes. An ERP implementation is complex and touches virtually everyone in the organization. Without the structure of project management processes and without a project manager who understands this methodology, the project runs significant risk in time, quality and costs. "Go-live" dates could be missed and the credibility of the project team and the ERP software itself could suffer dramatically.
Create a project organization structure to provide planning and quick response for decision-making and issues management: The toughest problems with any project implementation involve people issues. Pre-project planning must include the creation of clearly defined roles and responsibilities. The following critical roles need to be filled by qualified people: project sponsor, project director and/or project manager, functional team leaders, technical team leaders, project coordinator/scheduler, etc. These people must have dedicated time to the project and they must be willing to be accountable for dealing with issues and making timely decisions. Many ERP implementations become paralyzed when issues are put on hold and are not dealt with quickly.
Make the best use of the external consultants and experts: These people are paid huge amounts of money for helping you in implementing the ERP system. So you must make the best use of their knowledge and skills and ensure that the knowledge transfer is complete before they leave the project.
Teach the organization to use new capabilities: The natural progression from building capabilities is actually using them. While this may sound obvious, many organizations are far better at building new capabilities than at teaching (and motivating) people to use them. Successful companies avoid this fundamental imbalance. For them teaching goes hand-in-hand with building new capabilities, from defining roles to developing skills to culture shifts.
Implementation review: This review must be performed after users are competent with the system. The goal is to ask the software vendor to suggest better ways to use the system.
Assign clear ownership of benefits: During implementation, it is usually clear that the responsibility for going live-on-time and on budget-ultimately belongs to one person, the project leader. But after going live, who owns the benefits that are being targeted? In many companies, this is a difficult question to answer - no one is identified as the owner. But in successful companies accountability for results is no mystery. The owner may be the business unit leader, a project sponsor, a process owner or someone else. What is important is that there is somebody whose responsibility is realizing the benefits.
For more information kindly
visit:http://www.erppandit.com/Make-the-best-use-of-consultants-knowledge.html
This is the fourth and final part of article on Success factors of an ERP implementation. We are sure this series of articles will guide our readers make their ERP system work effectively and successfully.
Implement aggressive project management processes: The magnitude of an ERP implementation requires aggressive and structured project management processes. An ERP implementation is complex and touches virtually everyone in the organization. Without the structure of project management processes and without a project manager who understands this methodology, the project runs significant risk in time, quality and costs. "Go-live" dates could be missed and the credibility of the project team and the ERP software itself could suffer dramatically.
Create a project organization structure to provide planning and quick response for decision-making and issues management: The toughest problems with any project implementation involve people issues. Pre-project planning must include the creation of clearly defined roles and responsibilities. The following critical roles need to be filled by qualified people: project sponsor, project director and/or project manager, functional team leaders, technical team leaders, project coordinator/scheduler, etc. These people must have dedicated time to the project and they must be willing to be accountable for dealing with issues and making timely decisions. Many ERP implementations become paralyzed when issues are put on hold and are not dealt with quickly.
Make the best use of the external consultants and experts: These people are paid huge amounts of money for helping you in implementing the ERP system. So you must make the best use of their knowledge and skills and ensure that the knowledge transfer is complete before they leave the project.
Teach the organization to use new capabilities: The natural progression from building capabilities is actually using them. While this may sound obvious, many organizations are far better at building new capabilities than at teaching (and motivating) people to use them. Successful companies avoid this fundamental imbalance. For them teaching goes hand-in-hand with building new capabilities, from defining roles to developing skills to culture shifts.
Implementation review: This review must be performed after users are competent with the system. The goal is to ask the software vendor to suggest better ways to use the system.
Assign clear ownership of benefits: During implementation, it is usually clear that the responsibility for going live-on-time and on budget-ultimately belongs to one person, the project leader. But after going live, who owns the benefits that are being targeted? In many companies, this is a difficult question to answer - no one is identified as the owner. But in successful companies accountability for results is no mystery. The owner may be the business unit leader, a project sponsor, a process owner or someone else. What is important is that there is somebody whose responsibility is realizing the benefits.
For more information kindly
visit:http://www.erppandit.com/Make-the-best-use-of-consultants-knowledge.html
Lack of top management commitment
Failure factors in ERP implementation
Having discussed about the success factors in the previous articles it is time to anaylze
on failure factors. Here is the first article on this series. We are sure this series of articles
will guide our readers make their ERP system work effectively and successfully.
ERP implementation is, at its core, a people project: The biggest challenge before and
after implementation is not the technology; the biggest issues are related to people. At
every stage, companies must work harder to manage change, secure buy-in,
communicate with and educate their employees. Top human resources issues are related
to changing management, training and internal staff adequacy.
Employee resistance: If the employees are not educated and informed about the benefits
of the ERP system and assured about the security of their jobs by the top management,
they will start believing in the rumours that float around and will either resist or sabotage
the ERP implementation.
Lack of top management commitment: The top management should pledge and
demonstrate that the ERP implementation has its full support. They should assure the
employees about their jobs, clear any doubts and explain why the ERP system is a
necessity for the organization. The CEO or some senior level manager should sponsor the
ERP project in order to demonstrate the management commitment.
Inadequate training and education: All users of the ERP system should be trained
properly in using the system to its fullest. Different groups of people in the company will
have different training needs. Managers need more focus on the decision-making and
analysis features of the system, while the clerical staff need more focus on how to
perform their jobs. But all the users must be trained in the ERP basics, overview of the
system and its working, how an action by an employee triggers a host of events through
the organization, how automation will help, what processes are changed and so on. Educate everyone so that they understand what is going to be achieved with the new
system. Additional education should include total quality management and change
management strategies. Also the training sessions should be used to gain acceptance for
the ERP systems by dispelling the myths about ERP. When the employees do not
understand what the new system is and what it is supposed to do and how to operate it,
they will not use it or use it incorrectly. This can lead to failure of the system. Train
process owners (department managers) in how to use the system. Have them train the
users.
Inadequate requirements definition: If the requirements of the new system or what is
expected from a new system are not adequately defined, then the implementation team
will find it very difficult to plan the project. Only if the requirements are specified correctly,
the ERP package that is best suited can be selected.
Inadequate resources: ERP implementation is a complex, costly and lengthy project. The
initial budgets are very often exceeded and there are still many hidden costs in an ERP
implementation. So, while preparing the budget and allocating resources for the ERP
implementation care should be taken to consider all the factors that could affect the
costs, manpower requirements, infrastructure needs and then reserve a reasonable
amount of buffer of buffer for any contingencies that might occur during implementation.
For more information kindly
visit:http://www.erppandit.com/Failure-factors-in-ERP-implementation.html
Having discussed about the success factors in the previous articles it is time to anaylze
on failure factors. Here is the first article on this series. We are sure this series of articles
will guide our readers make their ERP system work effectively and successfully.
ERP implementation is, at its core, a people project: The biggest challenge before and
after implementation is not the technology; the biggest issues are related to people. At
every stage, companies must work harder to manage change, secure buy-in,
communicate with and educate their employees. Top human resources issues are related
to changing management, training and internal staff adequacy.
Employee resistance: If the employees are not educated and informed about the benefits
of the ERP system and assured about the security of their jobs by the top management,
they will start believing in the rumours that float around and will either resist or sabotage
the ERP implementation.
Lack of top management commitment: The top management should pledge and
demonstrate that the ERP implementation has its full support. They should assure the
employees about their jobs, clear any doubts and explain why the ERP system is a
necessity for the organization. The CEO or some senior level manager should sponsor the
ERP project in order to demonstrate the management commitment.
Inadequate training and education: All users of the ERP system should be trained
properly in using the system to its fullest. Different groups of people in the company will
have different training needs. Managers need more focus on the decision-making and
analysis features of the system, while the clerical staff need more focus on how to
perform their jobs. But all the users must be trained in the ERP basics, overview of the
system and its working, how an action by an employee triggers a host of events through
the organization, how automation will help, what processes are changed and so on. Educate everyone so that they understand what is going to be achieved with the new
system. Additional education should include total quality management and change
management strategies. Also the training sessions should be used to gain acceptance for
the ERP systems by dispelling the myths about ERP. When the employees do not
understand what the new system is and what it is supposed to do and how to operate it,
they will not use it or use it incorrectly. This can lead to failure of the system. Train
process owners (department managers) in how to use the system. Have them train the
users.
Inadequate requirements definition: If the requirements of the new system or what is
expected from a new system are not adequately defined, then the implementation team
will find it very difficult to plan the project. Only if the requirements are specified correctly,
the ERP package that is best suited can be selected.
Inadequate resources: ERP implementation is a complex, costly and lengthy project. The
initial budgets are very often exceeded and there are still many hidden costs in an ERP
implementation. So, while preparing the budget and allocating resources for the ERP
implementation care should be taken to consider all the factors that could affect the
costs, manpower requirements, infrastructure needs and then reserve a reasonable
amount of buffer of buffer for any contingencies that might occur during implementation.
For more information kindly
visit:http://www.erppandit.com/Failure-factors-in-ERP-implementation.html
best use of the information processing power
ERP is just for the Managers/Decision-makers
The managers and decision-makers are the major users of the ERP system. They are the people who benefit the most from the properly implemented ERP system. They will have all the information they need at their fingertips for making informed decisions. The quality of the decisions and the speed with which the decisions are made are dramatically improved as the ERP systems provide high-quality, timely and relevant information. But every employee in an organization benefits from the ERP system. An ERP system gives the store clerk access to the inventory record and enables him to find out the exact quality of an item. It allows the production supervisor to plan his activities. It allows all employees to apply for leave, get loads approved, gets the travel expenses reimbursed and so on.
But for making the best use of the information processing power of an ERP system the users should be trained on how to make the best use of the various features available. If people are ignorant about these, they will find it useless and if they are not properly trained, they will find the experience frustrating and tedious. These people will not use the ERP system or if forced will use it but not to its fullest potential. They will see ERP as a waste of time and do it just because they are forced to do it. This hostility towards ERP can be eliminated if the users are properly educated and make aware of the benefits of the ERP system.
For more information kindly visit:http://www.erppandit.com/erpmyths-for-managers.html
The managers and decision-makers are the major users of the ERP system. They are the people who benefit the most from the properly implemented ERP system. They will have all the information they need at their fingertips for making informed decisions. The quality of the decisions and the speed with which the decisions are made are dramatically improved as the ERP systems provide high-quality, timely and relevant information. But every employee in an organization benefits from the ERP system. An ERP system gives the store clerk access to the inventory record and enables him to find out the exact quality of an item. It allows the production supervisor to plan his activities. It allows all employees to apply for leave, get loads approved, gets the travel expenses reimbursed and so on.
But for making the best use of the information processing power of an ERP system the users should be trained on how to make the best use of the various features available. If people are ignorant about these, they will find it useless and if they are not properly trained, they will find the experience frustrating and tedious. These people will not use the ERP system or if forced will use it but not to its fullest potential. They will see ERP as a waste of time and do it just because they are forced to do it. This hostility towards ERP can be eliminated if the users are properly educated and make aware of the benefits of the ERP system.
For more information kindly visit:http://www.erppandit.com/erpmyths-for-managers.html
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