ERP Implementation Life Cycle

A MS Rajesh Kanna

rajesh@itarait.com

To Discuss

• Enterprise Resource Planning System

• ERP Implementation Life Cycle

– Methodology

– Critical Success Factor

– Critical Failure Factor

– Challenges

• ERP Case Study – Experience Sharing

• Discussions

A

R

E

V

I

S

I

T

Evolution of ERPInventory

Purchasing

MRP

MRP II

ERP

Internal

ERP/SCM

Production

Scheduling

Finance

Labour

All Internal

Resources

Internal

Customers &

Suppliers

MRP

MRP II

ERP

Internal SCM

Extended

SCM

External

Customers &

Suppliers

1960

2000

1980

1990

1970

TIME

2010

?

ERP is the integrated IT platform for the business

Business Processes

Traditional Approach is Function Specific like

Sales – Dispatch - Purchase – Stores – Production - Accounts

Modern Approach is based on Business Process - interlinking Departments

• Order To Cash

• Indent to Pay

• Production - Planning to Execution to Warehouse

• Maintenance – Planning to Execution

• Customer / Supplier Relationship Management

• Products – Concept – Design & Development to Market

• Human Capital – Hire to Retire

• Fixed Asset – Life Cycle

• Accounting Cycle

Business Processes in ERP

ERP System

Revenue

Cycle

Production

Cycle

Expenditure

Cycle

Accounting

Cycle

Quality Cycle Maintenance

Cycle

Customer Enquiry – Order

Booking – Dispatch –

Invoice -

Indents – Procurement –

Invoice Processing

Receive Indents / Plans –

Issue Materials

Sales Forecast – Confirmed

Order – FG Shipping

Implementing ERP System –

Project Management

� Methodology

� Challenges

� Critical Success Factor

� Critical Failure Factor

Implementing ERP System

� Methodology

� What is ..?

� Why it is required..?

� Benefits..?

• Project Management Methodology • To provide a standard management approach and guidelines to ensure

that projects are developed in a disciplined, well-managed, andconsistent manner that promotes the delivery of quality products andresults in projects that are completed on schedule and within budget.

Fundamentals

• What is a Project ? • A project is a temporary endeavor undertaken to create a unique

product or service.

• What is Project Management ? • Project Management is the application of knowledge, skills, tools and

techniques to project activities in order to meet or exceed stakeholderneeds and expectations.

• Success Criteria for a Project? • Does the implemented system/product meet the defined business goals

and objectives..?• Does the project meet the documented requirement specifications..?• Was it completed on time and within the approved budget..?

Life Cycle

1. Definition

2. Requirements

3. Analysis

4. Design

5. Development

6. Testing

7. Implementation

Process

1. Initiate

2. Plan

3. Execute

4. Control

5. Closure

Knowledge

1. Integration

2. Scope

3. Time

4. Cost

5. Quality

6. Human Resource

7. Communication

8. Risk

9. Procurement

Dimensions of Project Management

Source

Extended Implementation

Diagnostic

Analysis

Design

Pre-Implementation

ImplementationDevelopment

Deployment

Post-ImplementationSupport

ITARA’s Implementation Methodology

Pre-Implementation

Project Plan

Project Organization

Kick-Off Meeting

System Study

SDD Sign-Off

• Project

Preparation

• Preliminary

Discussions

• Project Team

Formation

• Fixing Roles and

Responsibility

• Conduct Kick-

Off Meeting

• Conduct Process

and System

Study

• Solution Design

Document

Preparation

• Discussion

• Sign-Off

Implementation

Infrastructure

Master Data

Modules

Configuration

CRP

Go-Live

• Setting Up

Servers,

Connectivity

etc

Training

Data

Migration• Master Data

Collection –

Scanning -

Upload

• Start

Configuring

Modules and

SDD Processes

• Conduct CRP

• Course Corrections

• Conduct Module

Testing and User

Acceptance Testing

• Conduct User

Training and

Evaluate

Training Feed

Back

• Perform Data

Migration

Activities

• Ensure Go Live

Day-1 Reports

Post Implementation

Help Desk

Post Live Issues

Warranty Support

Completion• Establish Help

Desk Function

• Appoint CRM

Support Team

• Log Post Live

Issues

• Review and

Resolve Issues

• Provide

Support till

Warranty

expires

• Confirm

Project

Completion

• Sign-Off

Deliverables

• MoM - Kick-Off Meeting

• Project Plan

• Master Data Template

• Solution Design Documents for

• High Level and Business Processes wise

• Module Deliveries

• Day One Reports

• MIS Reports

• As agreed in Solution Design Document

• Closure of Issue Logs

Implementing ERP System

� Challenges� Risks

� Communication

� Alignment – Board Room to Stock Room

� Change Management

� Resistance to Adoption

� Knowledge Gaps – User / Consultant

� User doesn’t know what he wants & Consultant doesn't know how to give -

� Infrastructure

� Getting Sign-Off

� Expectation and Delivery Gap

� ….

Implementing ERP System - CSF

• Leadership commitment

• Communication

• Professional project management

• Phased implementation approach

• Scope management

• Business transformation and change

management

• Removal of cross functional barriers

• Job-specific end-user training

• Members from Board Room to Stock

Room know their roles and

responsibilities.

• Focused issue resolution

• Post implementation support

Implementing ERP System - CFF

• ERP System Misfit

• High Turnover Rate of Project Team

• Over-Reliance of Heavy Customization

• Poor Consultant Effectiveness

• Poor IT Infrastructure

• Poor Knowledge Transfer

• Poor Project Management Effectiveness

• Poor Quality of Business Process Re-Engineering

• Poor Quality of Testing

• Poor Top Management Support

• Too Tight Project Schedule

• Unclear Concept of the Nature and Use of ERP System – from user’s point

• User Resistance to Change

An Experience Sharing

Client Environment

• Trident Pneumatics is one of the leading industry in manufacturing

critical compressed air solutions.

• They are largest exporters of compressed air treatment products in India.

• Human capital size in the company is around 100.

• The company was using a Indian accounting software to manage their

accounts and were evaluating many ERP applications to consolidate the

data & process integrity between the departments.

• The company also has tried with 3 ERP Implementation in earlier times.

Business Need

• Trident Pneumatics planned to go for ERP Implementation and the

management was in a favour of implementing a proven Open Source ERP

Application. There fore ITARA suggested OpenERP as recommended

Solution. Trident has the following business needs to be sorted out in ERP.

• Required to Streamline and automate the interlinked business processes and

to get real-time and accurate MIS by implementing OpenERP System

• Required to maintain complete and accurate master data (Customer, Vendor,

Price Lists, Products,BOMs, Work Center etc)

• Required to have Better Inventory Management

• Expectation to have Optimized Production Planning and Control

• Need to maintain SOD and Data Access Controls at all levels of User Group

• Need to tightly integrate “Order to Cash” , “Procure to Pay “ , “Production

Planning to Execution “ processes

• Need to monitor Real Time Financial MIS, Payables and Receivables etc.

• The company was using a Indian accounting software to manage their

accounts and were evaluating many ERP applications to consolidate the data

& process integrity between the departments.

The Implementation• About project

– Goal: Role out Single ERP

application to service the global

customers.

– Retire the legacy Application.

– Users CTQ’s to be met

• Methodology

– Water Fall

• Users

– 15 Business Users

– 15 Project Users - R&D

– 10 CRM Users

• Location

– Multiple location - HQ in

Coimbatore

– User across India

� Team

◦ Steering Committee - Trident

◦ Core Team - Trident

◦ Application User Team - Trident

◦ Functional Team - ITARA

◦ Project Leader

◦ Functional Consultants

◦ OpenERP Developer

◦ Tiny ERP Support

� Time line

◦ 4 Months (P) / 6 Months (A)

� Support

◦ Off-Site / Remote Login

OpenERP Solutions

ITARA started the ERP Implementation with APA Gap Analysis to

find the Pain Areas and Opportunity for process improvements.

Implementation is as below

• Product: OpenERP 5.0.14

• Sector: Discrete Manufacturing

• Modules Implemented

• Sales Management

• Service & Support

• Purchase Management

• Warehouse Management

• Manufacturing

• Project Management

• HR Management

• Accounting

Few of Key Solutions.. Delivered

• MRP runs at scheduled time every day to generate Purchase Orders and Manufacturing Orders

• Sub-Contracting Management

• Credit Limit Control – Will not process Sales Order if exceeds Credit Limit

• Built in eMail Solution for Sales Order Confirmation to Customers and Purchase Orders to Vendors

• Functionality of Item where used in BOM

• Purchase Order – Scheduled Delivery Dates – defined as required by the business

• Inventory Planning & Stock Levels Monitoring @ real time

• Management of Sales & Purchase Price Lists (more than 20 as required by business)

• Item Ageing with Qty and Value – Helps to track Non-Moving Items

• Status of Sale Orders @ each stage of order processing till invoice payments

• After Sales – Customer Service Tracking

Few of Key Solutions.. Delivered

• Multi Currency in Invoice

• Indian Tax Structures (Excise, VAT, CST, ST with combinations) and related reports

• ‘C’ Form Functionalities

• Customer Ageing with Ledger Reports

• Customer based Tax Structure

• General Ledgers as required by business

• Cheque Printing

• Product Master Data with Labeling & Product Categorization and Monitoring

• Monitoring New Product development and R&D through Project Management with Cost

Monitoring

• Cost Center defined as business required with receivables monitoring.

The Challenges Faced

• Scope Finalization

• Co-ordination with multiple teams (Functional Areas)

• Meeting CTQs

• New technology introduction – Open Source

• Co-ordination with multiple projects

• Change management

• Testing

• User acceptanceBottom Line

• Project Went Live by 2 Months Time Gap

• 245 Requirements delivered

• 80% of CTQs Met

• No Parallel Entry / Entry in 2 Systems

• Successfully Closed the FY 2010-11 in OpenERP

• Trident - migrated to OpenERP 6.0.3 – Feb 2012

Discussions..?

Thanks