Enterprise Systems

Department of Information Technology

Case Study

• Jackson Laboratory implemented an ERP system from Oracle with a $5 million

budget and a one-year time frame.
• They faced challenges with modifying the system to accommodate their unique
mouse-development functions and personnel problems during installation.
• Jackson Laboratory deal with with these challenges by modifying the ERP
system, placing special emphasis on training, seeking a fixed-fee contract with
Oracle, and purchasing a surety bond to reduce project risk.
• The Oracle applications suite included modules for process manufacturing,
accounting, e-procurement, and HR, among others.
• The implementation team chose a phased-implementation approach instead of
a big bang approach.
Introduction

• ERP implementation success depends on process redesign rather

than customization to fit the technology.
• Jackson Lab used strategies to reduce risk, such as a fixed-fee
contract, a surety bond, process change and employee training.
• The chapter provides an overview of the ERP life cycle process,
including key phases, roadblocks, and solutions, and discusses the
role of end-users and implications for managers.
SDLC

• System Development Life Cycle (SDLC) is a structured methodology

for developing information systems for organizations, which
involves planning, designing, and creating the system.
• SDLC is a top-down problem identification and bottom-up solution
process that requires technical and non-technical problem-solving
skills and a development team with a wide variety of IT and
business skills.
Traditional SDLC

• Early systems development projects had a high rate of failure due

to lack of experience, leading to the development of a structured
SDLC methodology.
Traditional SDLC
Rapid SDLC

• SDLC process is time-consuming, expensive, and may not be suitable

for all systems; Rapid SDLC approaches such as prototyping and end-
user development have been developed to provide quicker and less
expensive alternatives to SDLC.
• Prototyping involves implementing a skeleton or prototype of the
actual system to demonstrate its functionality to users and get their
feedback, while end-user development allows users to create their
own applications with the help of IT staff or professional trainers.
These approaches have proven to be effective in developing user-
interactive systems and custom reports in ERP systems.
Rapid SDLC
ERP Implementation Lifecycle

• ERP applications are prepackaged software that automate and

integrate business processes
• ERP systems are mission-critical and any breakdown can be very
disruptive and costly
• A rigorous ERP life cycle process is recommended to ensure success
• ERP systems can be deployed in a big bang or phased approach,
which initiates the stages of the system development life cycle
• The ERP life cycle consists of four phases: adaptation, acceptance,
routinization, and infusion.
ERP Implementation Lifecycle
ERP Implementation Plan

• An ERP implementation plan is a roadmap or blueprint to meet cost, scope, and time
constraints of an implementation.
• There are three major implementation plan choices: Comprehensive, Middle of the Road,
and Vanilla.
• Comprehensive is the most expensive and involves implementing the full functionality of
the ERP software in addition to industry-specific modules with major changes in business
processes and customization of legacy systems.
• Middle of the Road involves some changes in the core ERP modules and a significant
amount of BPR.
• Vanilla utilizes core ERP functionality and exploits the best practice business processes
built into the software. It requires aligning the company's business processes to the ERP
system, rather than modifying the software, and minimizes the project's costs and time
required for the implementation.
ERP Implementation Methodologies

• Methodology is a systematic approach to solving business

problems, and ERP methodology is based on maximizing the
utilization of resources using information technology.
• There are different ERP implementation methodologies, including
traditional and rapid approaches, which differ in their staging and
formality of structure. Rapid ERP life cycles allow for more
flexibility and quicker feedback loops.
Traditional ERP Lifecycle

• The traditional ERP life cycle approach has a deliverable at the end of each
stage that is reviewed by management and upon which a decision is made either
to continue with the project or not.
• End-user or people involvement is critical in both SDLC and ERPLC.
• The emphasis in ERP implementation is on customizing the software as well as
on changing the organization’s business processes, rather than determining the
user requirements for developing new applications as in the traditional SDLC.
• This requires a major change in the thinking process as well as team
composition and skill level of people involved in the development process.
• The ERP life cycle iterates at a much faster pace than in the traditional SDLC.
Change Management

• Change management (CM) is crucial throughout the ERP life cycle to

avoid system failures.
• A vision for CM must be articulated from the first stage and
constantly monitored and revised.
• SMEs and internal users guide the implementation team on change
management activities such as process changes, customization of
business rules, input screen and report design, and end-user
training and communication plan.
• Support from top management and skilled change management
team is essential for successful implementation.
Traditional ERP Lifecycle
Implementation Stage of Traditional ERP LS
Rapid ERP Life Cycle

• ERP implementations are long and involve requirements gathering, design, and implementation
phases.
• Time between requirement and implementation can be months or years, leading to potential changes
in requirements.
• Consultants provide methodologies and techniques for rapid implementation.
• Experienced consultants can best be leveraged to bring knowledge of techniques and approaches
that have worked well with other organizations.
• Scripts and wizards provided by consultants can automate common tasks.
• The appropriate implementation model may vary based on company, culture, software, budget, and
purpose.
• Previous implementation experience of program management and consultants is the largest driving
factor in determining the best approach.
• Time and cost savings claimed by rapid implementation approaches have increased the number of
rapid implementations.
TOTAL Solution

• ERP packages are necessary for running businesses but often fail
due to integration, collaboration, and change management issues.
• ERP solutions have matured but are still difficult to implement and
manage.
• Ernst & Young's Total Solution approach has five components:
• Value Proposition
• Reality Check
• Aligned Approach
• Success Dimension
• Delivering Value
FASTTRACK

• Deloitte & Touche Consulting Group's FastTrack methodology can

enhance and accelerate ERP software implementations.
• The FastTrack approach is based on a matrix of five phases and
five focus areas.
• The five phases reflect and integrate decisions regarding business
redesign, organizational change and performance, training,
process and systems integrity, client-server technologies, and
technical architecture.
FASTTRACK - Phases

• The five focus areas include business and systems redesign, change management,
project management, knowledge transfer, and technical architecture.
• The FastTrack methodology can be applied to various business objectives,
including global reengineering, process improvement, and software replacement.

• Stage 1. Scoping and planning: Project definition and scope. Project planning is initiated.
• Stage 2. Visioning and targeting: Needs assessment. Vision and targets identified. As-is
modeling.
• Stage 3. Redesign: To-be Modeling. Software design and development.
• Stage 4. Configuration: Software development. Integration test planning.
• Stage 5. Testing and delivery: Integration testing. Business and system delivery.
FASTTRACK - Areas

• Stage 1. Project management (project organization, risk management,

planning, monitoring, communications, budgeting, staffing, quality assurance).
• Stage 2. Information technology architecture (hardware and network
selection, procurement, installation, operations, software design,
development, installation).
• Stage 3. Process and systems integrity (security, audit control).
• Stage 4. Change leadership (leadership, commitment, organizations design,
change readiness, policies and procedures, performance measurements).
• Stage 5. Training and documentation (needs assessment, training design and
delivery for project team, management, end users, operations, and help desk.
Scripting of end-user and operations documentation)
FASTTRACK – Rapid Re

• Stage 1. Preparation. Mobilize, organize, and energize the people who will
perform the reengineering project.
• Stage 2. Identification. Develop a customer-oriented process model of the
business.
• Stage 3. Vision. Select the processes to reengineer and formulate redesign options
capable of achieving breakthrough performance.
• Stage 4. Solution. Define the technical and social requirements for the new
processes and develop detailed implementation plans.
• Stage 5. Transformation. Implement the reengineering plans. In an ideal project,
stages one and two consider all key processes within a company and conclude with
a step that sets priorities for the processes to reengineer. The other stages are
executed repeatedly for each process selected for reengineering
ASAP – Accelerated SAP

• Project Preparation
• Business Blueprint
• Realization
• Final Preparation
• Go-live and Support
Business Integration Methodology

• Developed by Accenture Systems 1990s

• To diagnose ERP Integration and Architectures
• Best suited for Customized and Blended Implementations
• Can be implemented in medium and large enterprises
Business Integration Methodology

• The Planning Phase –

• Finding Competitive Advantage
• Efficiency and Effectiveness
• Realization of Value and its Sustainability
• The Delivering Phase
• Business Architecture to Capability
• Business Capability can be:
• Human performance
• Business process
• Technology
• Blueprint to Development
Business Integration Methodology

• The managing Phase

• Direction, Coordination and Monitoring
• Tracking the progress of proposed business needs
• Checking the alignment of goals, context, content, and course
• Making sure the expectations are fulfilled (stakeholders)
• The Operating Phase
• Live and in-field working
• Generate Feedback
• Reality check of Planning Phase
• Feedback generation for improvements
Agile Development

• Most successful methodology of SDLC

• Moto: Start small and adjust yourself with the flow. Nothing is
constant in this world. Get better with every iteration.
• Implement in small pieces -> deliver it to customer -> change with
the feedback
• Approaches:
• Scrum
• Extreme Programming
Agile Development - Scrum

• Instead of providing complete, detailed descriptions of how

everything is to be done on the project, much is left up to the
team. This is done because the team will know best how to solve
its problem.
• Iterative
Agile Development - XP

• Extreme Programming (XP) is successful because it stresses

customer satisfaction. Instead of delivering everything you could
possibly want on some date far in the future this process delivers
the software you need as you need it.
ERP Lifecycle vs SDLC

• ERP Development is Possible not Recommended

• Extensive research to ensure best practices is not possible at
organization’s end
• Focus on implementation as ERP systems are generic and need to
fit a specific organization (a lot of implementation effort)
ERP Lifecycle vs SDLC
Project Management

• ERP Implementation is not a routine task and it needs:

• Special resources with special skills
• Extensive Resources
• Extensive Communication
• Long period of time
• Cross Departmental Collaboration
• Better to have project management with a proper reporting
structure
Project Management
Project Management - Suggestions

• Organizational structure must align with project governance

• Project owners, steering committee, and executives determine responsibilities
• Existing staff assigned to project; functional and technical staff report to project
leads
• Provide backfill staff to departments to ensure business continuity
• Team development is the responsibility of project management office and leads
• Project organization divided into several areas: project management office, leads,
teams
• Project measurement is crucial for identifying progress and meeting deadlines
Project Management - Suggestions

• Leads provide input to management and coordinate team activities

• Functional team broken out by ERP functional components with an overall
lead
• Technical area consists of infrastructure and development teams
• Conversion team critical for accurate data transfer
• Reporting team responsible for developing reporting framework and
prioritizing reports
• Change management team responsible for training and communications
plan
• Use all communication methods available for effective implementation