Topic 4: ERP Lifecycle :

Project Preparation (Planning)

Kedareshwaran S
 ERP Implementation Lifecycle (SLDC)

• Pre-implementation (Feasibility)
• Project Preparation (Planning)

• Business Blueprinting (Design)

• Realization (Execution)

• Final preparation and pre-Go Live

• Go live

• Support
 Project Preparation (Planning) Phase Activities

• Project Team Selection

• Executive/Steering Committee, Project Team

• Project Implementation Methodology

• Detailed Project Scope

• Project Procedures and Governance

 Project Team Selection

• The way a company organizes its ERP project team can greatly influence the
outcome of an ERP implementation.

• ERP project teams are formed not just for implementing ERP software but also for
the ongoing maintenance required of an ERP system.

• Team structures vary tremendously from company to company and situation to

situation.

• The company management should form the ERP team in consultation with the
consultants and vendors.
 Project Team Selection

• The ERP teams should contain the implementation partners (consultants) before,
during and after the implementation.

• The external implementation partners (consultants) should be there to help in the

package selection and ERP vendor negotiations.

• The ERP vendor representatives will come into the ERP team only after the selection
of the ERP package.

• The most critical factor that decides the success of any ERP system implementation
is the support of the end users- the people who use the system.
ERP Project Teams/Stakeholders
 Executive Committee/Steering Team

• Executive steering team consists of CXO level people who take ownership of the
project and provide clear direction to the project team.

• One CXO person designated as the primary sponsor or project champion.

• Involvement of the executive steering team heaviest at the beginning of the project.

• Ensure support of the shareholders and board members.

 Executive Committee/Steering Team

• The committee may meet once in a month to check the progress of the project.

• The primary sponsor of the project continues to be involved on a weekly basis

throughout the project.

• Their job is to be proactive and resolve issues quickly to avoid schedule slippage and
cost overrun.

• They perform both substantive and symbolic roles to ensure that the
implementation receives the necessary support and attention to succeed.
 Project Manager

• A full-time project manager needs to be identified so as to lead the program from its
onset through go live.

• There is another project manager from the implementation partner's side.

• Project managers (PM) must have exposure in implementing large projects and
understand business and technology both.

• A person liked by most of the people with appropriate skill set would make a better
PM than an extremely skilled person who is difficult to get along.
 Work/Implementation Team

• The project manager works with an implementation team for process designing,
system configuration and testing.

• The teams are constituted of people from business functional units, implementation
partner and external consultants and IT department.

• Since the ERP consists of many modules, the implementation team is divided into
groups that take care of individual modules.

• The implementation team for a large organization could be as large as 100.

 Sample High Level ERP Project Plan and Milestones

Jan Feb Mar Apr May June July Aug

Milestone 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35
Project Preparation
Blueprinting
Realization
Realization Final

Go Live Preparation

Go Live
Hyper care & Support

Preparation work completed,

Project team training starts Standard configuration
Completed, Testing started Go Live, Sustain starts

Development of objects Sustain Ends

To be design completed
completed, Testing completed,
Development objects specified
Go live preparation started
 ERP Implementation Methodology

• Big Bang

• Phased

• Parallel

• Hybrid
 Big Bang Approach

• In this strategy, the installation of ERP systems of all modules happens across the
entire organization at once.
• In the big bang strategy, the company moves from the existing or legacy system to
the new ERP system on a specific date.

• Advantages of big bang strategy include lower overall implementation cost, faster
return on investments and elimination of complex integration issues.

• Disadvantages of this strategy are high amount of time and effort for pre-
implementation planning, high failure rates, ‘do-it-right-the-first-time’ nature.
 Phased Approach

• The phased approach implements one functional module at a time, in sequential

order.

• The phased approach is also known as modular, functional and sequential

approaches.

• One of major requirement of this approach are interface programs.

• The interface programs are required to bridge the gap between the legacy ERP
system and the new ERP system until the new ERP system becomes fully functional.
 Phased Approach

• Advantages of phased approach include less risk, step-by-step approach and low
resource commitment.

• Disadvantages of this approach include large amount of technical resources for

creating the interface programs, high overall cost and lengthy implementations.
 Parallel Strategy

• Parallel approach keeps both the legacy system and the new ERP system active
simultaneously for a certain time duration after Go-Live.

• The parallel approach is ideally suited for mission critical situations that cannot
survive a major malfunction of an ERP system.

• It also works well for business environments that require the utmost in stability of
an ERP system such as BFSI/Pharmaceutical/Medical organizations.
 Parallel Strategy

• The main advantage of the parallel approach is that it has good recovery options in
case something goes wrong.

• The main disadvantage of the parallel approach is that consumes considerably more
resources than other techniques during the transition as all functional interaction
with the legacy system must also be duplicated exactly in the new ERP system.
 Hybrid : Big Bang variants

• The mini big bang strategy applies the big bang approach to one or two business
modules at a time.

• The multi big bang strategy uses multiple big bangs sequenced for different
geographical facilities.

• The mega big bang strategy refers to a large company, with multiple sites, all
going live at the same time using the big bang strategy.
 Which Strategy is the best?
• Risk

• Time

• Change Management

• Resource demand on company

• Learning scope
 Detailed Project Scope

• Location • Data

• Business • User base

• Business Process / Modules • Technology (Hardware, storage,

networking)
• Third party System Integration
• Exclusions
• Reports
 Project Procedures and Governance

• Frequency of communication • Change request management

• Mode of communication • Testing standards

• Project monitoring and status • System configuration/development

reporting standards

• Issue management
 References
• Textbook, Chap 9 (ERP Implementation)

• Textbook, Chap 10 (ERP Vendors, Consultants, Users)

• ERP by Alexis Leon, 4th Edition (2019), McGraw Hill Publication