Enterprise Systems

INSY 4103 – Lecture 4 - ERP Implementation

Project Processes
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 ● Understand and explain ERP development life cycle
● Describe major issues in acquiring and implementing ERP
Lecture systems
Objectives ● Explain steps in ERP procurement
● Being familiar ERP implementation issues and challenges

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 ● ERP development life cycle (if in-house or at the vendor
premise)
● ERP Acquisition and Implementation
● Business and Requirements study (techniques, tools, models)
● Inviting vendors to participate (via bids, short listing, etc.)
Outline ● Software and Vendor selection
● Implementation and Go-Live (customization, configuration,
testing, training, deploying and Go-Live)
● Change management
● Post implementation issues

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ERP Implementation Life
cycle
 ● System development methodologies
● Traditional SDLC
● Rapid SDLC approaches (e.g Prototyping, agile )
● ERP applications are prepackaged software developed
by commercial software vendors and custom installed
for organizations to automate and integrate the various
Basics business processes.
● In understanding better methodology, knowing the
difference between ERP and other software packages is
important
● Similar to any other systems development, there are also
traditional and rapid ERP implementation approaches
 What part of this methodology
is challenging ? Why?
You may discus your
experience related to your
industrial project.

SDLC
Rapid SDLC
(prototyping)
ERP vs other
software
packages
 ● Discuss the role of ERP in organizations. Are ERP tools
used for business process reengineering (BPR) or does
Exercise – 4.1 BPR occur due to ERP implementation?

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 ● The appropriateness of the plan/methodology depends,
in part, on the project, the company, and the reasons for
the implementation.
ERP ●ERP implementation methodologies
Implementation ● ERP Life Cycle
● Rapid ERP Life Cycles
plan
/methodologies ● Key decisions – ERP implementation plan
● Comprehensive
● Middle of the Road
● Vanilla
 ● Discuss ERP implementation plan in terms of
● Comprehensive
Self ● Middle of the Road
● Vanilla
construction of
● Focus on the difference
knowledge ● Report to the class

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 ● Comprehensive
● It is the most expensive, lengthy, and costly
approach.
● It involves implementation of the full functionality of
the ERP software in addition to industry-specific
Cont… modules.
● Implementing the full functionality requires a high level
of business process reengineering (BPR) with major
changes in the business processes and customization of
legacy systems.

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 ● A middle-of-the-road
● It is an ERP implementation plan involves some changes
in the core ERP modules and a significant amount of
Cont… BPR.
● The middle-of-the-road approach is not as expensive as
the comprehensive approach or as straightforward as the
vanilla approach.

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 ● Vanilla
● Is an ERP implementation plan utilizes core ERP
functionality and exploits the best practice business
processes built into the software.
● A company following a vanilla implementation will have
Cont… to simply align their business processes to the ERP
system, rather than modify the software.
● By eliminating or minimizing the required BPR, the
project’s costs and time required for the implementation
are minimized.

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 ● Stage 1. Scope and commitment stage
● This is similar to the investigation stage in SDLC discussed
earlier.
● In addition to conducting the feasibility study, however, one of
the first steps is to develop a scope of ERP implementation
within the resource and time requirement.
ERP Life ● Stage 2. Analysis and design stage.
● In addition to analysis of user requirements, the ERP team
Cycle has first to make a decision on the software and decide on
consultants and SMEs.
● Another key activity is to map the differences between the
current business process and the embedded process in the ERP
software or gap analysis and to develop a long-term plan on
whether to change the business processes of the organization or
to customize the ERP software to support existing processes.

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 ● Stage 3. Acquisition and development stage.
● The organization has to purchase the license for the
production version of the software and build the
production version of the system, which is eventually to
be made available to the end users.
● The entire production platform must be configured and
Cont… built with the necessary hardware, network, security,
software, database, and real production data.
● The tasks identified in the gap analysis are executed at
this stage.
● These include customization of embedded software
rules, data in the database tables, input screens, and
reports that come with the ERP system.

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 ● Describe Four basic ERP conversion approaches
● Big bang
● Phased
● Pilot
Self ● Parallel
construction of ● Focus on;
knowledge ● The most expensive/costly
● The most risky
● The most safe

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 ● Stage 4. Implementation stage.
● The focus for this stage is on
installing and releasing the
system to the end users (i.e.,
“Go-Live”) and on monitoring
the system release to the end
users.
Cont… ● System conversion is a major
activity for the new system
and needs to be managed
carefully.
● There are four basic
conversion approaches, which
are visually represented in the
following Figure

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 ● Stage 5. Operation stage.
● This is often managed by the operation team with
assistance from the implementation team.
Cont…
● Knowledge transfer is the major activity as support for
the new system is migrated to the help desk and support
staff.

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Cont…
Cont…
 ● There are various rapid implementation approaches offered
by ERP consulting firms
● Ernst & Young, LLP, have developed a systematic way
of approaching systems reengineering called the Total
Solution.
Rapid ERP ● Deloitte & Touche Consulting Group’s FastTrack
implementation methodology can enhance and
Life Cycles accelerate ERP software implementations.
● Accelerated SAP (ASAP) road map by SAP
● BUSINESS INTEGRATION METHODOLOGY
(BIM) developed by Accenture Systems
● AGILE DEVELOPMENT
 ● Describe the following rapid ERP implementation
methods
Self ● Ernst & Young’s ----Total Solution.
construction of ● Deloitte & Touche Consulting Group’s - FastTrack
● SAP’s - Accelerated SAP (ASAP) road map
knowledge
● Reflect on the similarity with the standard ERP life
cycle

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 ● Because of their prepackaged nature, ERP applications
generally do not require the traditional SDLC process;
however, that does not mean they can be bought from the
vendor, installed (i.e., a PC-based software package), and
used as is immediately
ERP Life
Cycle Vs. ● Consultants play an important role in rapid implementation of
SDLC ERP systems.
● Rapid or accelerated implementation approaches are very
popular and require the use of experienced
consultants to leverage the knowledge of techniques that
have worked well with other organizations
 ● ERP applications generally do not require the rigorous
traditional SDLC process (mainly that of the design).
● The emphasis on the ERP life cycle is whether to
customize the software or to change the
organization’s processes to match those embedded
Cont… in the software.
● Change management strategy therefore plays a very
important role in the ERP life cycle.
Identify key
difference
area’s – focus
on the analysis,
design and
implementation
stages
 ● It is critical to have solid top management commitment

Implication for
Management ● Given the complexities of ERP implementations, it is
also important to have strong and experienced program
and project management.
ERP Acquisition and
Implementation

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 ● Course work 1: Exploration and reporting of 3 ERP
solutions (20 %)
● Group work (5 – 7 students)
● In terms of number of modules, delivery mode,
technical requirement , cost of ownership, vender
Reminder details …. Comparisons
● Do not base on only one sources for criteria setting
(course work ● Use of most comprehensive criteria is much appreciated
1) ● Good also if you focus on those that are not well know on
the literature
● Submission in document format (5 to 10 pages) and
Presentation in PPT format (20- 30 slides)
● Submission - April 26, 2024 (Friday)
● Presentation - April 29, 2024 (Monday)

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 ● ERP Acquisition and Implementation
● Purchase process-
● Inviting vendors to participate (via bids, short listing,
etc.)
● Business and Requirements study (techniques, tools,
models)
Key issues ● Software and Vendor selection…..
● Implementation and Go-Live (customization,
configuration, testing, training, deploying and
Go-Live)

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 ● A start-up process involves assessing the business
environment, culture, and skills of the staff and “readiness”
of the company.
● Early in the project, open and honest assessments are
critical to project planning
Cont… ● It is often said that the ERP software is the inexpensive
component of an implementation—other surrounding
systems components and resources cost more.
● With any ERP implementation strategy, all the
implementation components (HW, SW, People) need to be
identified and planned.

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 High Level ERP Purchase Process

● Vendor research and information gathering

● Vendors’ list (local, international, standard), profile,
● Product list, product module, Literature Review
ERP System ● High-level vendor demonstrations and evaluation
and Vendor ● Prepare criteria, Invitation, demo session, evaluation, filtering
(purchasing) – ● Needs and requirements assessment using current legacy
systems, BPR analysis, or both
● Compiling the final document (Functional and technical)
Basic steps ● Development of request for bid or proposal (if needed or desired)
● Bid document preparation (Standard Bid Document – SBD)
● Release request for bid to vendors/Float bid

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ERP System
Research
Table
 ● Analysis and selection (vendor/software )
● Evaluation of bids (Functional evaluation, Technical
evaluation)
● Vendor-detailed demonstrations
Cont… ● Contact references / client visit
● Develop a total cost of ownership
● Vendor(s) negotiation
● Contract review and change
● Pricing—software, maintenance, and consulting support
● Purchase system (let the fun begin)

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 ● Business and Requirements study (techniques, tools, models)
● Note that most ERPs are more of purchased than inhouse
developed
● The first step actually in such a process is to study and shape
own Business process and requirements.
● Fundamentally, business process modelling involves
identifying, defining, and representing a process in its
entirety, in order to aid communication of that process. It also
Cont… has the following benefits:
• Allows you to identify tasks that are redundant and
remove them
• You can spot bottlenecks in the process and improve
process efficiency by eliminating them
• Efficient processes can be identically repeated, even when a
new staff member must perform that part of the process

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 ● There are several techniques in business process modelling:
● Business process modelling notation (BPMN): Business
process modelling notation (BPMN) is comprised of symbols
that are used as a representation of tasks and workflows.

● Unified modelling language diagrams: Unified modelling

Cont… language (UML) is a more modern approach to modelling and
documenting processes.
● UML was initially developed by software developers, but has been
successfully used in business process modelling, with a more
object-oriented approach to its 14 UML diagram types.

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Process modelling
notation (BPMN)

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 ● Flow chart technique: This is a graphic representation of
something that is manufactured or produced, which gives people
involved in the project or process a single reference point.
● Flow charts use basic shapes and arrows to define relationships,
such as processes, decisions, or data.

Cont… ● Data flow diagrams: Data flow diagrams (DFDs) show how data
enters a system from external sources, how data moves internally
within the system, and how the data is stored.

Example from real world ERP project

document

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Self ● Identify 3 criteria in ERP vendor selection
construction of ● Identify 3 criteria in ERP solution selection
knowledge

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 ● Software and Vendor selection
● The selection of a vendor that best meets the needs and
long-term direction of the company is a critical step in a
successful implementation.
● In selecting a vendor, a well-understood selection process
needs to be utilized.
Cont… ● Depending on a given company’s experience in purchasing
an ERP system, that company may want to bring in a
specialized consulting firm to assist in the selection process.
● In any event the steps involved in selecting a vendor
generally are based on
● best fit of an ERP to business functions and
● the overall ERP vendor’s product performance in the
market.

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 ● Key decisions in vendor/software selection
● On premise vs cloud option
Cont… ● Less customization vs more
● More BPR or less
● Phased vs big bang vs pilot vs parallel
 ● Essential ERP vendor/ERP evaluation criteria
● Functional fit
● ERP systems aren't a one-size-fits-all proposition, so consider
required business functions.
● Business functions or modules supported by their software
● Systems integration
Cont… ● ERP software will inevitably need to connect with third-party
systems, thus it is good to make sure that they're considering
those systems in their discussions.
● Features and integration capabilities of the software
● Process coverage
● Process coverage is another important consideration.
● Vendor technology
● The ERP buying team should evaluate whether the vendor's
technology is the right fit for them
 ● Customization options
● Another criterion for consideration is the ERP
software's customizability and how much
customization a business might need.
● Vendor roadmaps
● A vendor's software plans are another important
aspect of the ERP selection list.
● Financial viability of the vendor as well as length of
Cont… time they have been in business
● Implementation and maintenance costs
● Keeping ERP costs in mind is crucial, and the buying
team can easily overlook some figures
● Vendor support
● The amount of support a vendor will provide is
extremely important to consider.
● Customer service and help desk support
 ● Licensing and upgrade policies
● Total cost of ownership
● IT infrastructure requirements
More ● Consulting and training services
● No vendor will meet all requirements so vendor discussions and
negotiations should focus on the best fit for the business.
 https://www.selecthub.com/erp-software/

Best ERP Software Vendor Companies Comparison 2021 (selecthub.com)

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Cont…
 ● Going live (“Go-live”) is one of the most critical points in a
project’s success.

● It is vital to focus the efforts of all project teams to ensure that

Implementation task and activities are completed before going live.
and Go-Live ● This allows project management to address any
outstanding issues that may jeopardize the Go-live date.
● This involves a readiness process that needs to include as
many team members and appropriate users and managers
as possible

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 ● ERP implementation is resources intensive
● People resources (IT experts, capable end users, consultants ..)
● software (OS and DB
● Hard ware (server and client)
● ERP implementation organization and approach
● To successfully implement an ERP, a temporary organization
cont… needs to be defined and staffed and an overall implementation
strategy decided and communicated.
● A well-defined governance structure, with a clearly understood
organization in place, helps to create a comfort level for all
involved as to how the project decisions and priorities will be
addressed
● It should outline key decision makers along with their role and
communication lines
 ● What is necessary for the ERP implementation to be
successful ? Mention top five issues one has to get in shape
Exercise for successful ERP implementation.

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 ● Tenacity and Commitment From Top Management
● Getting the right ERP Vendors
● Proper & Adequate Awareness /Training
● Sufficient Testing
Key Issues in ● Employee Retention

ERP ● Proper Planning & Management

● Investment In Internal Hardware
implementation
● Maintenance Cost
● Disaster Recovery and Business Continuity
● Last, and it does not happen very often, but planning for a
disaster and providing business continuity is a part of every
ERP implementation
 ● Project management
● It requires Multiple stakeholders and resources
● Project planning
● Organizations often underestimate the time and budget
necessary for a successful implementation
Implementation ● Data quality
Challenges ● Once the organization has located all data sources, it can start
thinking about migrating it to the ERP system. But that may
involve a serious data hygiene exercise.
● Issues related to Change management
● An ERP implementation involves more than just switching to
a new software system
 ● Cost overruns
● Very common
● Continuous improvement
● An ERP implementation is not a one-off effort that ends when
the new system goes live.
Cont… ● The solution must continue to evolve to support new business
demands and technology.
● The project team needs to continue to manage the project after
deployment, fixing issues and supporting new requirements as
they come up.
2nd and Last ●Monday 29, 2024
Test

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 ● Use mind mapping techniques to represent key concepts related to
ERP/Enterprise system

Exercise

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 ● Essential ERP vendor/ERP evaluation criteria
● Business process modelling
● ERP System and Vendor (purchasing) steps
● Rapid ERP Life Cycles
Inputs to the ● ERP vs other software packages
solution ● ERP implementation plan
● ERP Life Cycle
● System conversion approaches
● Key Issues in ERP implementation
● Implementation Challenges

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Thank You

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