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ERP and project Management

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Enterprise Systems

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ERP Project management

1 Project Integration Management

2 Project Scope Management

3 Project Time Management

1.1 Project Plan Development 2.1 Initiation 3.1 Activity Definition

1.2 Project Plan Execution 2.2 Scope Planning 3.2 Activity Sequencing

1.3 Integrated Change Control 2.3 Scope Definition 3.3 Activity Duration Estimating

2.4 Scope Verification 3.4 Schedule Development

2.5 Scope Change Control 3.5 Schedule Control

4 Project Cost Management

5 Project Quality Management

6 Project Human Resource Management

4.1 Resource Planning 5.1 Quality Planning 6.1 Organisational Planning

4.2 Cost Estimating 5.2 Quality Assurance 6.2 Staff Acquisition

4.3 Cost Budgeting 5.3 Quality Control 6.3 Team Development

4.4 Cost Control

7 Project Communications Management

8 Project Risk Management

9 Project Procurement Management

7.1 Communications Planning 8.1 Risk Identification 9.1 Procurement Planning

7.2 Information Distribution 8.2 Quantitative Risk Analysis 9.2 Solicitation Planning

7.3 Performance Reporting 8.3 Risk Response Planning 9.3 Solicitation

7.4 Administrative 8.4 Risk Monitoring and Control 9.4 Source Selection

9.5 Contract Administration

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A number of factors will effect the success or failure of a systems

project

Operational methods and techniques

Business management and style

Leadership and communications

Risk factors

Organizational factors, management support, software design, the levels of

user involvement, and the scope and size of the project itself

Implementation risks for technologies, the organization, and human resource

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Factors Influencing Information Systems Project Success

Number of modifications

Effective communications

Authority for project implementation

Business management

Ability to generate additional funds to cover implementation

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Factors Causing ERP Project Failures

Poor technical methods

Communication failures

Poor leadership

Initial evaluation of project

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ERP Systems

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Risk Factors

Organizational factors

Changes in scope

Sufficiency of resources

Magnitude of potential loss

Departmental conflicts

User experience

Management support

Changing requirements and scope

Lack of commitment

Software design

Developing wrong functions, wrong user interface

Problems with outsourced components

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Risk Factors, cont………….inued

User involvement Lack of commitment

Ineffective communication

Conflicts

Inadequate familiarity with technologies

Project management Size and structure

Control functions

Project escalation Societal norms

Continue pouring resources into sinking ships

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Implementation Risks

Technology

Consistencies with current infrastructure

Organizational

Customization increases risks

Redesign of business processes to fit package decreases risk

Human resource factors

IT staff skills and expertise

Project size

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Managing Large-Scale Projects

MRP or ERP

Package implementation differs from custom implementation

Vendor participation

User skills and capabilities

Management commitment

Project champion

Communication with stakeholders

Training in MRP

Good project management

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Managing ERP Projects

Implementation factors

Re-engineering business processes

Changing corporate culture

Project team

Include business analysts on project team

Management support

Commitment to change

Risk management

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Factors in Successful ERP Projects

Customization

Increases time and cost

BPR advantage from “best practices” adoptions lost

Use of external consultants

Offer expertise in cross-functional business processes

Problems arise when internal IT department not involved

Supplier relationship management

Need effective relationships to facilitate and monitor contracts

Change management

People are resistant to change

Organizational culture fostering open communications

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Project-Related Factors

Project division into subprojects

Project leader with proven track record

Project focus on user needs instead of technology

Project champion

Slack time in project schedule

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Additional Factors in the Success of a Project

User training

Focus on business, not just technical

Critical

Management reporting requirements

May need to add query and reporting tools

Technological challenges

Data conversion

Interface development

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CASE

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FoxMeyer versus Dow Chemical

FoxMeyer

Project went over budget because of new client

Implemented two new systems at same time

Technical issues with the ERP software

No open communications

Unrealistic expectations on ROI

Dow

Had project implementation problems

Dow had strong leadership and project champion

Was able to adjust scope and maintain control

Fostered open communications

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Featured Article: FoxMeyer’s Project Was a Disaster. Was the Company Too Aggressive or Was It

Misled?

Was FoxMeyer misled?

What strategies could have been put into place to avoid the project

disaster?

What business misjudgments occurred?

Was FoxMeyer’s failure due to technology failure or business failure?

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Featured Article: FoxMeyer’s Project Was a Disaster. Was the Company Too Aggressive or Was It Misled?, continued

Nation’s fourth largest pharmaceutical distributor

1990s engaged in enterprise-wide software and warehouse automation

project

Filed Chapter 11 in 1996

Claimed to be misled by SAP, Anderson Consulting, Pinnacle Automation

Claimed vendors oversold capabilities

Computer integration problems topped $100 million

Vendors blame management

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Featured Article: FoxMeyer’s Project Was a Disaster. Was the Company Too Aggressive or Was It Misled?, continued

Background

FoxMeyer had orders for over 300,000 items per day, anticipated much

growth

Processing hundreds of thousands of transactions each day

Old system was Unisys mainframe

Wanted scalable client/server system

Tested SAP’s software on both DEC and HP against benchmarks

Implementations scheduled by Andersen for 18 months

Modules to be implemented in 2-3 months

Unrealistic – could take up to 12 months

All modules fast-tracked

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Featured Article: FoxMeyer’s Project Was a Disaster. Was the Company Too Aggressive or Was It Misled?, continued

Two systems for most important business systems

SAP supplied the accounting and manufacturing software

Claims volume was issue

Warehouse system from McHugh Software International

Purchased through Pinnacle

Pinnacle also supplied some hardware

Added complexities to project

Functional holes in systems

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Featured Article: FoxMeyer’s Project Was a Disaster. Was the Company Too Aggressive or Was It Misled?, continued

FoxMeyer strategies

High volume

Low price

Anticipated savings from new computer system

Wanted to win market share by further price-cutting

Hoped new system would be more efficient, but did not

improve processes

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Featured Article: FoxMeyer’s Project Was a Disaster. Was the Company Too Aggressive or Was It Misled?, continued

FoxMeyer got major new client

Out of capacity of mainframe

Issues on balancing system traffic

Unisys-based management system eventually failed

Information wasn’t being received timely

FoxMeyer suffered losses in transferring inventory to new centers

Customers received incorrect shipments

New customer didn’t deliver expected volume

FoxMeyer overspent

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Summary, continued

Success in ERP projects includes factoring in Consideration of customizations, use of external

consultants, management of supplier relationships, establishing metrics, and change management

Project-related concerns Technological changes, user training, and

management requirements