Basic Framework For ERP Implementation

Success of ERP system largely depends upon the implementation of ERP in accordance with the processes defined/Reengineered in the organization for respective modules. The objective of this article is to explain the theoretical framework for implementation of ERP.

Following are the key steps involved:

1.Identifying the Needsr
Some of the basic questions, which are to be answered during this step:

ï·How does it improve customer satisfaction in terms of quality, cost, delivery time and service? ï·Why should an ERP package be implemented? Objectives/What do you want to achieve? ï·Will it improve profitability? ï·Can the delivery times of products be reduced? ï·Will it help to reduce manufacturing cost of products? ï·How can it help to contribute in the turnover and at the same time reduce manpower? ï·Will it be possible to reengineer the business processes?

2.Evaluating the "AS IS" situation of the business

To understand the present situation of the business, the various functions should first be listed and measured according to the following aspects.

ï·Total time taken by the business processes. ï·Number of decision points existing in the present scenario. ï·Number of Departments/Locations of businesses process. ï·The flow of information and its routing.

3.Deciding the desired 'Would Be' situatio

The concept of 'Benchmarking' is used to see that processes achieved are the best in industry. Benchmarking is done on factors like cost, quality, service etc. This concept enables to optimize the processes to gain overall benefits.

4.Reengineering the business process

Reengineering of business processes is done to

ï·Reduce the business process cycle time. ï·To reduce the number of decision points to a minimum. ï·Streamlining the flow of information and eliminating the unwanted flow of information.

5.Evaluation of ERP packages

The various ERP packages are evaluated on the following criteria

ï·Flexibility:It should enable organizations to respond quickly by leveraging changes to their advantage, letting them concentrate on strategically expanding to address new products and markets.

ï·Comprehensive:It should be applicable across all sizes, functions and industries. It should have in-depth features in accounting and controlling, production and materials management, quality management and plant maintenance, sales and distribution, human resources management and plant maintenance, sales and distribution, human resources management, and project management.

ï·Beyond the company:It should support and enable inter-enterprise business processes with customers, suppliers, banks, government and business partners and create complete logistical chains covering the entire route from supply to delivery, across multiple geographies, currencies and country specific business rules. Other factors to be considered are:

ï·Global presence of packagernï·Local presencernï·Market Targeted by the packagernï·Price of the packagernï·Obsolescence of packagernï·Ease of implementation of packagernï·Cost of implementationrnï·Post-implementation support availability

6.Finalization of the ERP package

Finalization of the ERP package can be done by making a comparison of critical factors through a matrix analysis.

7.Installation of Hardware and Networks

This work is carried out in a phased manner depending on the schedule of implementation and need of the hardware components.

8.Finalizing the Implementation Consultants

The factors of selection for consultants arer
Skill set, Industry specific experience, cost of hiring consultants etc

9.Implementation of ERP package

This involves following things-

ï·Formation of teamrnï·Preparation of planrnï·Mapping of business process to packagernï·Gap analysisrnï·Customizationrnï·Development of user specific reports and transactionrnï·Uploading of data from existing systemrnï·Test runrnï·User trainingrnï·Parallel runrnï·Concurrence from userrnï·Migration to the new systemrnï·User documentationrnï·Post-implementation supportrnï·System monitoring and fine tuning