Transcript ERP System Selection and Implementation

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SEMINAR
ON
ENTERPRISE RESOURSE PLANNING
Presented by
Malaya Kumar Behera
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Introduction
It is a major business decision for a manufacturing
company to make the decision to select and
implement an ERP system within their organization. If
done properly it will be a profitable and enjoyable
experience. However, if it is implemented poorly all
concerned will be disappointed with the results. This
presentation is based on actual experiences of
implementing these type systems in various
manufacturing environments.
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Project Organization
• It is advisable to give the effort the status of a
major project and require regular progress reviews
at the appropriate levels of management.
• To be successful the effort of selecting and
implementing an ERP system must have high
priority and visibility within an organization.
• ERP implementation truly is a company-wide effort
and is doomed to failure if treated as anything less.
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Selecting a Project
Manager
• Project Manager
• Key user of the new ERP system who
has a a good deal of experience and
high level of credibility within your
company.
• The project should not be managed by
the IT department.
• Should be trained in the techniques of
project management.
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Budget/Funding
• Many decision-makers turn
to vendors
A better way is to ask,
"Why are we doing this and
how will we benefit?" By
answering these questions,
an organization can begin
establishing an ERP budgeta valuable tool for
negotiation.
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Budget/Funding, cont.
•
Budget/Funding (cont.)
• Management should establish budget
guidelines for the project prior to
beginning the project
• Project team needs a budget that they
can use for planning and executing the
project
• Many companies have no idea what to
pay for an ERP system, therefore,
many decision-makers turn to vendors
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Functional Requirements
• An important prerequisite to
selecting an ERP software
package is to document the
functionality required to support
your business.
• This effort should also include
where possible, functionality to
support your business
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objectives in the future.
Gather Requirements
• The project team can analyze and document the
functional requirements.
• The project manager can organize and conduct
interviews with people in various departments
throughout the company. From these interviews
a formal requirements document is produced.
• Alternatively, the project manger can request
written requirements from each department and
then organize the responses into a requirement
document.
• Often a combination of the two methods works
well, but at any rate someone who is
knowledgeable of the company and ERP
functionality should document requirements.
• If no one within the organization is qualified, it
is not unusual for companies to enlist outside
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help.
Two Types of
Requirements
• To keep the requirements documentation
process as simple as possible we will
classify requirements into two types:
• General or Standard requirements
• Special Interest requirements
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General or Standard
Requirements
• List the primary functions or
departments which you want
supported by the new system.
These may include, but is
certainly not limited to:
• Receiving
• Shipping
• Marketing/Sales
• By definition these
requirements include
functionality that most systems11
provide and most companies
General or Standard
Requirements, cont.
• After determining the major functions , you can
expand to the next level of description.
• Example 1:
• Accounting is an area or department that is
an integral part of the ERP system, however,
it is not necessary for you to describe every
function that the accounting department
requires from the system.
• Example 2:
• Another example might be purchasing.
Requirements could be listed as: “must
support contract purchases and blanket
purchases, has Request For Quotation
capability, etc.”
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Request for Information (RFI)
• After you have developed a candidate list, the next
step is to acquire all the information that is readily
available for these packages.
• This information will be used to narrow the
candidate list to the top two to three candidates.
• The following are a few means of requesting the
required information.
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Reviewing the Finalists
• After narrowing the choices a more in
depth study of the finalist packages can
take place.
• There is not an absolute method for
accomplishing this task but some proven
recommendations are listed on the
following slides.
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References, and
Trial Software
References:
• Vendors should be able to provide you with names
of additional companies that have installed the
software.
• They should provide you with points of contact so
you can conduct telephone interviews. This can be
very informative as to actual satisfaction with the
software and the vendor.
Trial Software:
• Vendors may provide a copy of the actual software
that can be installed for in-house use for a limited
period of time (30 to 90 days).
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Selection Criteria
• Making the final selection can be easy - when there
is a clear choice and consensus among all team
members.
• In most cases, though, there will be trade-offs, with
specific vendors excelling in different areas.
• One of the main activities for the selection team is
to develop the key criteria for the selection
decision and to assign weights to these criteria
based on the company's specific situation.
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Implementation Phase
• It is assumed for the implementation phase of this
course that the selection and acquisition of the
system is complete.
• The sections that follow deal primarily with the
actual implementation of the system.
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Education and Training
• 1. Conceptual Training
• Depending on the users’ experience you
may want to offer conceptual training in
conjunction with implementing your new
system.
• This education could include instruction
on the principles and logic behind
material requirements planning
(MRP),capacity requirements planning
(CRP), bills of material structuring (BOM),
inventory management and others.
• Different systems manipulate these
functions in various ways through screen
presentations, but the principles and
logic upon which they are based is
usually very similar.
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2. System Training
• Users will require training on the new system
prior to start up.
• Typically this training is provided on a formal
basis directly by the software vendor or through
certified subcontractors.
• It can usually be accomplished by traveling to
their training site or having them come to yours.
• The method for completing this training should
have been part of your evaluation process in
selecting your system.
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Operating Procedures
• In many companies implementation of the new
system is not only a commitment to a formal
method of managing the business, but also a
means of replacing a structure of informal
procedures and methods. Therefore, it is necessary
to document how things will be done with the new
system. This will be an evolving process, but some
areas need to be addressed prior to system start
up.
• One of these areas is selecting individuals who will
be responsible for the accuracy of inventory
records, bills of material, and routings. Not only
should these individuals be selected, but prior to
system start up they should develop the working
procedures for how the accuracy will be
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maintained.
Conclusion
• This concludes the “Selection and Implementation
of an ERP System.”
• To get the most of this presentation, print out each
sample worksheet (provided as a hyperlink) and
use the contents when selecting and implementing
your new ERP system.
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