SPM ASSIGNMENT

Enterprise Resource Planning (ERP)

0. Select A Project : Project Introduction:Enterprise Resource Planning, or ERP, is a system that is used to combine all of the information or operations of a company into a single unit. The standard ERP system will utilize both computer hardware and software in order to achieve this. Perhaps one of the most important parts of the ERP system is the central database. This database will be used to store information from various modules. When the term ERP was originally coined, it was used to describe systems that were designed to use multiple resources. It was commonly connected to the manufacturing industry. The term is used today in a much broader context. The goal of ERP is to unify the various functions of an institution. However, the use of Enterprise Resource Planning is not simply limited to corporations. It is commonly used by nonprofit organizations, government agencies, and other institutions. In order for system to be recognized as an ERP, it must meet a certain requirement. The software must be capable of giving functionality to one unit that would commonly have to use multiple systems. For example, a system that was able to combine two elements into a whole, such as a system that combined payroll with accounting, would be an Enterprise Resource Planning system. Manufacturing Engineering, resource & capacity planning, material planning, work flow management, shop floor management, quality control, bills of material, manufacturing process, etc. Financials Accounts payable, accounts receivable, fixed assets, general ledger, cash management, and billing (contract/service) Human Resource Recruitment, benefits, compensations, training, payroll, time and attendance, labor rules, people management

Supply Chain Management Inventory management, supply chain planning, supplier scheduling, claim processing, sales order administration, procurement planning, transportation and distribution Projects Costing, billing, activity management, time and expense Customer Relationship Management Sales and marketing, service, commissions, customer contact and after sales support

1. Identify project objectives

1.1 Identify objectives and measures of effectiveness General Business Goals and Objectives: You may have heard the saying: How can we all be on the same page if there is no page? This is especially applicable when undertaking an ERP implementation. Having a well-defined and written scope of work can mean the difference between a failed project with disastrous results, and a highly successful project with huge benefits. Assuming you prefer the latter, lets look at what a good scope of work includes. Anatomy of a good scope document while each ERP consulting firm will have their own variations on their scope of work definitions, generally you should look for a table of contents that covers the following major areas: Scope Statement What is the project overall, when will the project be complete, how much will it cost, and most importantly, how does it meet the companys strategic goals. Objectives dont confuse these with goals. Objectives are specific action items that will be taking place during your project. For example: install product X, convert data, provide training, develop custom reports, etc. Objectives should be focused around action items that solve specific problems and achieve desired results. Project Risks and Mitigation Making sure you proactively identify the things that can derail your project is critical. These can be things such as a key project manager leave during the project, unrealistic workloads, lack of proper hardware, communication issues, funding issues, etc. Each risk should be clearly stated along with how each will be monitored to help ensure project success. Roles and Responsibilities basically, who is responsible for what. Be sure to list names and contact information for each person and define their functional role for each area of the project. Some example roles include project sponsor, key advisors, project owners, etc. Roles should also cover functional areas such as IT, financials modules, operational modules, sales force automation modules, etc. Assumptions This may seem, well, assumed, but often what isnt said is the thing that gets you into the most trouble. The ERP implementation consultant may be assuming you are doing all data entry tasks, and you may be assuming they are. Be sure to identify as many assumptions as possible to avoid misunderstandings and project delays.

Deliverables These are documents used by the team to achieve the objectives of the project. An example would be the scope of work document, project plans, training manuals, issues lists, etc. Deliverables are not the end result of the project, they are the written tools used to accomplish it. Functional Requirements The devil is in the details and this is where they should be listed. Each functional requirement should be stated by functional area (such as general ledger, accounts payable, inventory control, etc.) and define details such as: Manual input required Data to be converted Required reports Interfaces to other systems How this area will affect changes in current business procedures Project Change Control You can count on something coming up you didnt anticipate. Since you know its going to happen, nows the time to define how that should be handled. Clearly state who is authorized to request changes and as importantly, who approves them. A change request form should always be completed for any change, even if it doesnt involve a dollar amount, such as changes to go live dates. Issue Escalation Procedures If theres a problem, does your team know who to go to next? Youll want to clearly state how an issue should be escalated and to whom. The last thing you need is a problem quickly getting out of hand and turning into a bigger issue than it should. Future Projects This can probably be better stated as what is not included. If you are building a technological foundation for a second phase, future project or business strategy, list it here. Its important that everyone works with an eye towards future goals and plans accordingly.

In summary Professional ERP implementation consultants know that the best projects are those where the customer takes ownership. Since most clients dont know all the steps to implementing a new system (hence the reason you hired the consultants), the scope and work plan are your guiding light throughout the process. Your ERP implementation consultant should be ready, willing, and eager to help you define a proper scope and work plan. Current State Analysis Successful solutions begin with analysis. This usually starts with an assessment of the current state of things. These most usually include the "aches and pains" that hinder your teams productivity and detract from your companys goals, but they might also include certain strengths within the current system. It is important to identify both. Desired State Analysis Your desired state will establish and define the ultimate project goals. This analysis will result in a clear direction for the project and be the foundation for measuring the projects success. This analysis will also define the "Gap" between the Current and Desired State. Also, as a result of this phase of the analysis, the areas where the
Revenue Gap can be narrowed will become obvious.

Technology is an enabler, not a solution itself. Automating an inefficient process will only speed up the wrong activity. On the other hand, automating very strong processes can be easy and early victories for your system. Project Goals Your project will begin to come into focus once you begin to drill down into the measurable, tangible project goals that address your ERP solutions unique requirements and specific needs. Example Objectives: - Reduce the time required to disseminate leads to the sales team - Create and distribute reports electronically Project Deliverables Your project deliverables drill down further into the specific business needs that your system must address. This detailed list of features and functions will sometimes serve as the body of an RFP used to evaluate and compare ERP applications. Example Deliverables: - Run reports automatically and distribute electronically

- Track customer referrals and lead sources Cost Justification Your ERP solution plan should also provide a basis for justifying the expense associated with your initiative. To achieve success, the ERP initiative must be endorsed and used at the highest level. Involve users in the analysis. Create a system that becomes a tool for them, not just a repository for management information. A solution may take as little as 30 days to implement, all the way up to 120 days, based on complexity.

Involve the Appropriate People The most important factor in a successful ERP implementation is the people involved. Involvement has to start at the top with management and include relevant parties all the way to the user level. As a rule, successful ERP projects have an executive as the project champion. They make sure the project stays on track by setting the initial project goals and objectives, and eliminating obstacles that arise. Prioritize Plan meetings where the teams can discuss the opportunities to improve your current system and have them establish the priority of some "must-dos". Since the ERP project will also impact management and information services (IS), poll them individually or create representative teams to compile their critical success factors as well. Early participation by everyone affected by the ERP solution promotes a sense of ownership and stimulates enthusiasm before the solution is implemented. Establish a Timeline Implementing a ERP solution, or any automation project, without preimplementation planning is a sure-fire way to set out on the road to failure. An effective planning process includes creating the project calendar, complete with established deadlines and scheduled meetings. If your decision process will be by committee, delegate the appropriate tasks to the members. The length of the planning process can range from a few weeks to several months depending upon the complexity of your companys processes. Take a Technical Inventory One area thats often overlooked prior to selecting a ERP solution is the technical inventory. It is critical to know the current components and age of your companys technical infrastructure. This information will directly impact both the cost and operability of any ERP solution. Enterprise wide ERP solutions are designed for the

client/server environment, Web-based environment or combination of the two. While some products will function in a variety of technical infrastructure configurations, others are designed for a limited number of configurations. If your technical infrastructure will not support the application you select, you may have to decide whether to change your infrastructure or choose from a more limited list of solution options. Establish a Budget

Front-office automation solutions vary from low-end, "off-the-shelf" products to high-end, customizable solutions. The cost of these products will vary significantly based on functionality, scalability and architectural elegance. While the ERP marketplace is crowded and fragmented, you should be able to compile a short list of systems to review based on your specific ERP objectives, business requirements and technical infrastructure. The greater your functional requirements, expect the cost for the system to increase. Establish Project authorities:There will be one cosmic User, which is, Administrator who will responsible for the authorized access for the Product. Under administrators supervision following will be given authority: Administration management Administration general staff Identify all stakeholders in the project The typical groups (or to use the recent term stakeholders) that are going to be significantly affected by a new ERP system, and therefore will need to be involved in its selection; development and delivery are the following: Executive sponsor Project Manager Implementation team Lead trainer Internal or external network administration and MIS Finance management Sales management Sales general staff

Modify Objective in the light of stakeholder analysis Successful ERP implementations share another important factor. The implementation team should manage the project relatively conservatively - set realistic goals, phase the implementation in modest steps, and view the entire process as one of continual improvement, not as a one-time event. Its been said Think big, start small, and move quickly. Another important factor in any successful ERP implementation is to

review the different user groups, especially the last five groups listed above and make sure that in your first implementation each of these groups perceives some value to them personally in making the effort and commitment to support the development and to use the system once it is implemented. For example sales general staff may be motivated if the system calculates commission reports and will be receptive to the argument that the numbers will only be correct if all opportunities and closed sales are in the system. Establish methods of communication with all parties For Project manager to client the communication media could be phone, fax, E-mail. When communicating within the team the communication media should be E-mail and Remote desktop only.

2. Identify Project Infrastructure

2.1 Establish link between project and any strategic plan

Software Strategies:
Better Training Employees The most important factor in maintaining positive customer relationships are the people you employ. Automate Your Best Practices Standardizing and automating your best practices will have many desired effects on your company. Increasing Customer Satisfaction Automating key functions such as quick access to critical information and fast turn-around on requests greatly enhances the customers experience while interfacing with your organization. Increasing Efficiency Reducing those administrative time wasters will not only increase employee productivity, but will increase their job satisfaction. In return, they will be able to spend more time doing core activities such as interfacing with your customers. Reducing the Sales Cycle Improved Communication and rapid delivery of information will reduce the time necessary to close even the largest of deals. Fast delivery of requested information would result in the competitive advantage that may just push those key sales over the top. In addition, the enhanced professionalism and accuracy will enhance your image, shortening the time it takes to earn a prospects trust. Improving Communications Since all corporations have perfect communication pipelines any gain here would be nominal. Improving Management Decision Making You need the latest and most accurate information to make sound management decisions. Identify installation standards and procedures - User Training: -Train to your processes -Put your team through rehearsals -Take the time to do it right -Keep training - Finalize Configuration: -Finalize Network Configuration

-Finalize Application Configuration - Final Data Migration - Workstation Installs - Go Live on Production System 2.2 Software and Hardware Requirement Full list of IT infrastructure (hardware and software) options for running ERP Software:

One High performance (Xeon) Server computer with Minimum 16 GB RAM, minimum 500 GB Hard disk drive (HDD). (With CD or DVD) writer for taking periodical backup). With at least ONE node (4 GB RAM) with the latest Operating system. Other client sides PC (user's nodes) with WIN XP / Vista with at least 4 GB RAM. System software: MS Windows 2012 Sever Operating System and MS SQL 2008 Server RDBMS software. MS Excel. UPS for the Server and switch (hub) is required for at least two/three hours. You may add as many PCs as many users are planning to use ERP. The PC (nodes) may be networked using wired LAN or wireless LAN (Wi Fi) technology. At least one LaserJet (or Desk Jet) printer is recommended for hard copy printouts. You will appoint ERP Coordinator who is available during the ERP testing, implementation and deployment activity. There will be a Chief-of-Project to monitor and review the progress during the ERP software implementation. (Usually a very senior person with necessary authority to take crucial decisions). Please appoint network administrator to support the IT infrastructure, such as Server, networking, etc. He / she will also take care of anti-virus solutions, Firewall, Login and secret password, etc. (May be same person as ERP project Coordinator). For multi locations: Provide Server with static IP address for out-locations to login. A good broadband connectivity at the server location is recommended. Third party solutions. Internet / Email connectivity. The net connection is necessary for remote login for support.

2.3. Identify project team organization A key member of this team is the Project Manager. Though you may choose to employ a third party consulting firm or the software vendor to assist with your implementation, there must still be a Project Manager from your company designated as the leader of the implementation effort. This person should be in a position in the company that will enable him or her to assemble the internal resources necessary to complete the project. Project management experience is a plus as is experience with the primary areas where the software is to be used. The success of the implementation will have little to do with the technical elements and a great deal to do with business processes as they are implemented with the software. Therefore, a project manager with expertise in that area is a plus. The project team should also contain representatives from the areas using the software. They will need to speak for their groups needs and champion the product to their group. Finally, you should include the designated ERP software administrator. The Project team will be involved in designing how users will conduct their work on the system. This may dictate changes in procedures or changes in the software or both. Finally, the team will participate in the Model Office Review to validate that all is in order for rollout.

3. Analyse project characteristics

3.1 ERP project has a product-based approach i.e. it is a Product. Implementing an ERP system in an organization is an extremely complex process. It takes quite a bit of systematic planning, expert consultation, and a well-structured approach. Due to its extensive scope it may even take years to implement in a large organization. Implementing an ERP system eventually necessitates significant changes on staff and work processes. While it may seem practical for an in-house IT administration to head the project, it is commonly advised that special ERP implementation experts be consulted, since they are specially trained in deploying these kinds of systems. Organizations generally use ERP vendors or consulting companies to implement their customized ERP system. There are three types of professional services that are provided when implementing an ERP system, they are Consulting, Customization, and Support.

Consulting Services are responsible for the initial stages of ERP implementation where they help an organization to being their new system to life with product training, workflow, improvement in ERPs use in the specific organization, etc. Customization Services extend the new ERP systems use or change its use by creating customized interfaces and/or underlying application code. While ERP systems are made for many core routines, there are still some needs to be built or customized for a particular organization. Support Services include both support and maintenance of ERP systems, for instance, troubleshooting and assistance with ERP issues. The ERP implementation process goes through five major stages: Structured Planning, Process Assessment, Data Compilation & Cleanup, Education & Testing, and Usage & Evaluation.

1. Structured Planning: is the foremost and the most crucial stage where any capable project team is selected, present business processes are studied, information flow within and outside the organization is scrutinized, vital objectives are set, and a comprehensive implementation plan is formulated. 2. Process Assessment: is the next important stage where the prospective software capabilities are examined, manual business processes are recognized, and standard working procedures are constructed. 3. Data Compilation & Cleanup: helps to identify data to be converted and the new information that would be needed. The compiled data is then analyzed for accuracy and completeness, throwing away the worthless/unwanted information. 4. Education & Testing: aids in proofing the system and educating the users with ERP mechanisms. The project team tests and verifies the complete database via multiple testing

5.

methods and processes. A broad in-house training is held where all the concerned users are oriented with the functioning of the new ERP system. Usage & Evaluation: is the final and an ongoing stage for the ERP. The lately implemented ERP is deployed live within the organization and the project team checks it regularly for any flaw or error detection.

3.2 Analyze other project characteristics Features and Functions The discrete enterprise resource planning (ERP) knowledge base addresses discrete manufacturing (distinct items such as auto parts or chairs) as well as non-manufacturing industries. Research vendors that support a range of functionality for production planning, shop floor control, and product costing. The knowledge base also provides information on financials, human resources, and other enterprise management modules.

Financials Financial system modules for bookkeeping and ensuring accounts are paid or received on time.

Human Resources Human Resources encompass all the applications necessary for handling personnel-related tasks for corporate managers and individual employees. Modules will include Personnel Management, Benefit Management, Payroll Management, Employee Self Service, Data Warehousing, Health and Safety, Workforce Management, Training, and Product Technology

Manufacturing Management Kanban is a method of Just-in-Time production that uses standard containers or lot sizes with a single card attached to each. It is a pull system in which work centers signal with a card or other device that they wish to withdraw parts from feeding operations or suppliers. The Japanese word kanban, loosely translated, means card, billboard, or sign, but other signaling devices such as colored golf balls have also been used. The term is often used synonymously for the specific scheduling system developed and used by the Toyota Corporation in Japan. Point-of-use storage/floor stockkeeping inventory in specified locations on a plant floor near the operation where it is to be used.

Inventory Management Solutions for inventory management are used for the record-keeping of goods that are warehoused, and managing the movement of these goods to, from, and through warehouses. Purchasing Management Purchasing management encompasses a group of applications that controls purchasing of raw materials needed to build products and that manages inventory stocks. It also involves creating purchase orders/contracts, supplier tracking, goods receipt and payment, and regulatory compliance analysis and reporting.

Quality Management Quality management refers to the set of actions taken by an organization to ensure that it creates and delivers high-quality products. In order to do so, organizations must comply to national and international rules and regulations related to product quality, but they often also create and use internal requirements for quality control. Specific procedures need to be set up in order to ensure that the end products comply to internal or external quality standards. All these activities need to be well documented in order to provide the information needed when customers are not satisfied with the quality of the products received.

Sales Management Sales Management encompasses a group of applications that automates the data entry process of customer orders and keeps track of the status of orders. It involves order entry, order tracing and status reporting, pricing, invoicing, etc. It also provides a basic functionality for lead tracking, customer information, quote processing, pricing & rebates, etc. Product Technology This group of criteria defines the technical architecture of the product as well as the technological environment in which the product can run successfully. Criteria include product and application architecture, software usability and administration, platform and database support, application standards support, communications and protocol support and integration capabilities. Relative to the other evaluation criteria, best practice selections place a lower relative importance on the product technology criterion. This apparently lower importance is deceptive because the product technology usually houses the majority of the selecting organization's mandatory criteria, which generally include server, client, protocol and database support, application scalability, and other architectural capabilities. The definition of mandatory criteria within this set often allows the client to quickly narrow the long list of potential vendors to a short list of applicable solutions that pass muster relative to the most basic mandatory selection criteria.

3.3 Identify high-level project risk

Risk is the net negative impact of a vulnerability exercise, considering both the probability and the impact of an occurrence. A risk management exercise is the process of identifying risk, assessing risk and taking proactive steps to remove risk or reduce risk to an acceptable level. Invalid project assumptions Project planning omissions Data conversion delay Lack of continuity or consistency

3.4 Take into account user requirements concerning implementation The clients may have their own procedural requirements. For example, - What is the lowest powered client computer that you will run the new system on? - What other applications will the new system need to integrate with?

Schedule Risk: Project schedule get slip when project tasks and schedule release risks are not addressed properly. Schedule risks mainly affect on project and finally on company economy and may lead to project failure. Schedules often slip due to following reasons: Wrong time estimation Resources are not tracked properly. All resources like staff, systems, skills of individuals etc. Failure to identify complex functionalities and time required to develop those functionalities. Unexpected project scope expansions.

Budget Risk: Wrong budget estimation. Cost overruns Project scope expansion

Operational Risks: Risks of loss due to improper process implementation, failed system or some external events risks. Causes of Operational risks: Failure to address priority conflicts Failure to resolve the responsibilities

Insufficient resources No proper subject training No resource planning No communication in team.

Technical risks: Technical risks generally leads to failure of functionality and performance. Causes of technical risks are: Continuous changing requirements No advanced technology available or the existing technology is in initial stages. Product is complex to implement. Difficult project modules integration.

Programmatic Risks: These are the external risks beyond the operational limits. These are all uncertain risks are outside the control of the program. These external events can be: Running out of fund. Market development Changing customer product strategy and priority Government rule changes.

3.5 Select general life cycle approach Life cycle approach for ERP: A general Waterfall model is the best suited for the ERP software

Fig. ERP workflow Model 3.6 Review overall resource estimates Once the major risk analysis has been redefined the project manager should now review the estimate of efforts and resources. As the review has been done the outcome should as expected then we assure that we are in right path.

4 Identify products and activities

4.1 Identify and describe project products - what do we have to produce? Following is the Activity flow diagram of the ERP

Fig.4.1 Activity Flow Diagram Preparation for an upcoming solution review should always begin with reviewing (or creating, if unavailable) the workflow diagram for the corresponding business process which is the focus of the solution review. This helps familiarize the demonstrator with the underlying business process that is being enabled through the customization and configuration of ERP. This diagram should detail the business process with notes on how ERP is being used to account for each step. This document is provided to the customer so that they can see that their process has been properly documented as well as to provide a visual guide through each step of the demonstration.

Appropriate data for the business process is critical to strongly demonstrate the capability of the solution presented. For example, if you are using a look up to a reference table on a ERP form, be sure to populate the information with valid data that speaks to the business process being demonstrated. 4.2 Document Generic Product Flows

Fig.4.2 Product Flow Diagram The development of an Enterprise ERP Architecture is created by evaluating a principles-based Industry value chain. In order to make an end-to-end customer experience, Technology, Data & Applications, and Services and People are all examined at an enterprise level. There are two phases to the development of this architecture. The first part is to develop a Principles-based Conceptual Functional Architecture, which attempts to be technology independent, focusing on functional components and the interfacing needed between them. The method to develop the Conceptual Architecture is to gain an understanding of not only the enterprise business driver needs , but the design principles as well. These principles clarify the vision by identify ing business expectations for the functionality and operation of the solution. They give constraints and objectives for technology use; much like a building code provides guidelines for the construction industry. In parallel the enterprise organization is examined for alignment of Marketing, Sales, Customer Care and Performance Management. Various discovery mechanisms

are also used to define and articulate the strategic vision for customer interaction. This includes the assessment of where the enterprise is today in relation to that vision. In addition, one customer segmentation model is decided upon for all products and services. 4.3 Recognize product instances Where the same generic Product flow diagram relates to more than one instance of a particular type of product, an attempt should be made to identify each of those instance. Such as customer systems, external data and marketing models are related to the customer data warehouse. 4.4 Produce ideal activity network The diagram shown in 4.1 is also the ideal Activity network for the ERP product. This diagram should detail the business process with notes on how ERP is being used to account for each step. This document is provided to the customer so that they can see that their process has been properly documented as well as to provide a visual guide through each step of the demonstration 4.5 Add checkpoint if needed However, there is need to modify activity by dividing project into stages and introducing checkpoint activities. Checkpoints activities are often useful milestone, which represents completion of important stages of the project.

5 Estimate effort for each activity

5.1 Carry out bottom-up estimates Planning You need a well documented business strategy with associated goals and a business case. This is necessary to ensure the project stays focused on the right priorities to deliver the documented business value. It is very easy to get distracted with various ERP nice-to-haves that might be sexy but are not supported by the business case. Since the project team cycles through the requirements in an iterative fashion, it is even more critical to ensure everyone understands the business strategy, the associated goals and how they support the business case. There are several documented examples of ERP implementations that went over budget or did not hit the original go-live date. There are also many explanations out there to explain why these ERP implementations did not meet budget or timeline. Instead of repeating common information out in the ERP blogosphere, I would like to speak to a root cause that is typically overlooked by our industry inaccurate ERP implementation estimations. In the next sections we will take a closer look at building a better ERP estimate. Have the right type of information to calculate an ERP Estimate Developing a competent estimate for an ERP implementation or major customization can be a challenge for both the seasoned consulting partners and a new ERP customer. In a previous life I developed ERP implementation estimators for one of Tier-1 ERP software vendors. I also developed both Time & Materials as well as Fixed-Price ERP implementation estimates some good, some not so good.

Simply stated an ERP implementation estimate is based upon your current understanding of the following areas:

Area

Description Implementation partners are generally good about estimating their level of effort to support ERP implementations but fall far short in estimating the effort for the customer. In the majority of ERP implementations, customer must make available their best and brightest resources to support the implementation. Odds are that these resources play a major role in current operations. The ERP estimate should include any need to backfill existing business resources. Project scope refers to the implementation activities that need to be performed and who is responsible for performing the task(s). Unfortunately, customers see this as an area to reduce implementation costs by taking on activities that they do not have the skills/resource availability to complete (ex. Organization

Customer Participation

Project Scope

Area

Description Change Management). People make ERP successful. Too often business processes and product scope is defined only at the product level (example: we are implementing the ERPs Purchasing module). How can I tell what business activities and features are out of scope? Developing focus is much harder to develop and maintain. Every implementation partner has constraints! It is a just a reality that should be factored into any ERP estimate. For example, how much lead time should be given for an Implementation partner to replace a consultant?

Product Scope

Implementation Partner Constraints

You can never hope to create a realistic estimate without having valid information on the drivers that influence scope, schedule, and resources. The next step is to understand your level of comprehension of the information that drives the ERP estimate. Understand the type of ERP Estimate you are calculating Per the Project Management Institutes Body of Knowledge (PMBOK) there are three types of estimates for a project. These estimates are based upon your level of understanding for

Project scope, constraints, and assumptions.

Simply stated the more you know about the task(s) at hand the greater the probability of calculating a realistic estimate! The trouble is that too many ERP implementations do not generate a definitive estimate. A majority of implementation partners generate estimates during the sales cycle where estimates may approach a budgetary accuracy at best. To compensate for the estimation accuracy (-10% to 25%) many implementation partners incorrectly utilize contingency reserves and management reserves to plug the potential estimate gap. This is just a bad estimating practice which wills most likely result in budget challenges further down in the implementation. Fortunately, there are steps we can take to develop better ERP estimates. Drive to validate and refine your ERP estimate Estimates can and should change as you learn more about the project. However, there is an expectation of there that estimates should be defined once and they should be completely accurate. Here is where I see the process break down. Once an Implementation partner communicates an estimate too often the customer will latch and consider it an iron-clad promise. The key driver for this phenomenon has more to do with the Implementation partner setting the wrong expectation when an estimate is communicated. Customers encourage this behavior by focusing on cost as the key competitive differentiator. Also, there is a perception in the market that if an implementation partner cannot provide a single estimate then the

Implementation partner does not have the experience. Customers, this may be the case but do not blindly jump to that conclusion. Best Practices for obtaining ERP Estimates from your Implementation partner Over the years I have been asked by customers what is the best approach to get a reliable, cost-effective estimate from Implementation partners. When should a customer request a fixed price estimate versus a time & materials estimate? Following are some general guidelines I would like to communicate based upon my experience:

Fixed Price versus Time & Materials: Have the Implementation partner provide a Time & Materials estimate for project planning, requirements gathering, and fit/gap. Once the Fit/Gap is performed you should know exactly what you are up against and then ask for a competitive bid/fixed price estimate to complete the remaining work.

Complete Information: Always as the Implementation partner to provide an estimate with the following information Product Scope Project Scope Assumptions Constraints FTE Hour Requirements for both the Implementation partner and customer resources Estimate accuracy let customers know up-front that the estimate will change Quantify Reserves: Ask the implementation partner if the estimate contains either a contingency or management reserve. If so then ask what % of the total estimate is for reserves. If this % is greater than 10% then this is a sign that the Implementation partner did not gather enough information to generate a realistic estimate. If the implementation partner does not calculate a reserve then consider this estimate suspect (red flag). Knowledge Transfer: Just as important it is for an Implementation partner to perform knowledge transfer to enable customer resources to support ERP, its as important for the customer to educate the Implementation partner on the unique aspects of their business model. The better the understanding the better the estimate.

5.2 revise plan to create controllable activities Long activities make project difficult to control. It is always better to divide long activities into smaller one to reduce complexity of the documentation.

6 Identify Activity Risk

Structured risk management activities conducted by the project office seek to identify at an early stage any critical success factor that appears unfulfilled. This allows the project management team to raise the issue in the appropriate forum and begin efforts to mitigate any potential risk. The risk assessment team identifies the controls in place and additional controls needed to provide confidence for the project or system and reduce the level of risk to one acceptable to the stakeholders. The Risk Manager then performs periodic vulnerability testing of the controls to monitor the continued adequacy of system confidence Common Activity risks are: 1. Invalid project assumptions (different expectations among stakeholders) 2. Project planning omissions. Significant delays incurred not because project planning tasks were underestimated but because project tasks were completely omitted (forgotten) 3. Data conversion delay. Unanticipated data scrubbing due to poor data quality 4. Lack of continuity or consistency of business processes among multiple locations (as well as the introduction of sub-optimization by some locations) 5. Failure to proactively anticipate and mitigate user adoption challenges - fear of change, sub-optimization and/or sacred cows. Closely aligned with failure to recognize the change in cultural due to a ERP implementation 6. Missing or infrequent active and visible executive sponsorship 7. Project is perceived by users as optional; Failure is an option 8. Failure to backfill project team schedules/workloads 9. Failure to recognize weak (basic PC operation) user skills assessment prior to training 10. Failure of Risk Management and proactive risk mitigation

7 Allocate resources
7.1 Identify and allocate resources to activities 7.2 The project lead creates project roles for a particular validity period with the planned required capacity 7.3 The resource manager searches for a suitable and available resource for each project role 7.4 The project lead can restrict the time of the assignment and specify the work to be assigned to the role

Resource Management Manage Your Staff - Your Most Valuable Asset ERP-Project supports your management of project resources. It enables you to manage internal and external employees, but also machines, equipment, vehicles, and rooms, etc. First, allocate the required resources to the projects using the Resource Planner. Availability and utilization are always shown. In the course of the project, you can align the initially planned resources with the currently required resources and make changes time and again.

7.2 Revise plans and estimates to take into account resource constraints A Gantt diagram where showing scheduled activities per employee, by specifying an interval of dates. March Design Project definition project plan Business process analysis Develop Prepare environment Develop data migration Configure and customize Implement User training April May June July

Workstation Installation Evaluate Support implementation Project Review

Fig. Gantt chart: When staff will be carrying out the task.

8 Review/publicize plan
8.1 Review quality aspects of project plan The Model Office Review is a major project milestone. Hold the Model Office Review after the project team has completed the system configuration and documented the business processes. If your project includes customization, then the Model Office Review should occur after the development work has been completed and tested by the team. Purpose The purpose of the Model Office Review is to walk through the system configuration with an extended Review team to validate the teams work and get approval to proceed with rollout. However, this should not be the first time stakeholders have been consulted about the system. Throughout the business process design phase the project team members should be in close communication with representative users in their respective functional areas. The Model Office Review is an opportunity to get the stakeholders together in one room and get buy-in and sign-off on the system. Approach it with the assumption that your configuration work is done, but be prepared for some rework based on feedback from external parties. Its much better to catch something that the team overlooked now than in the midst of the rollout! Procedure Use the use cases and function list you developed in the business process analysis phase to provide the agenda for the model office review. Provide users with the documented processes they are to accomplish and ask them to do it using the ERP application. Watch how they navigate the system and note where it is particularly difficult to move from one step in the process to the next. Those are areas that may warrant customization or additional documentation. 8.2 Document plan and obtain agreement We should document our procedures about payroll systems and also define all the communication of project manager with clients, team leaders, programmers and testers.

9 And 10. Execute plans and Lower levels of planning

Final Thoughts Technology is in a state of constant flux, making it important for companies not to spend vast amounts of money on systems and programs that may quickly become out-of-date. A recent study by the Panorama Consulting Group revealed that 63 percent of companies had difficulty when implementing new software. That problem has extended to organizations that use enterprise resource planning (ERP) systems. More than 40 percent of survey respondents said their companies changed business processes to accommodate ERP systems. However, a recent IFS survey found that while many manufacturing firms have purchased software licenses for approximately seven applications, the average company uses less than half of that. Preventing ERP issues despite these problems, many businesses are moving to implement ERP systems to take advantage of their vast benefits with regard to handling day-to-day operations. As a recent Forbes report pointed out, ERP software can integrate of business-related functions, from sales and inventory data to Enterprise Resource Planning. ERP can help organizations save a substantial amount of money by increasing productivity, better management of inventory and improved customer relations. ERP implementation strategies In addition to prior planning, there are a number of strategies companies can employ to make sure they are getting the most from their ERP systems: - Consultant suggested that educating employees about ERP software is key. He said that too often people are left alone to figure out how to use the new technology, which makes them far more likely to reject it. - The Forbes article advised organizations to hire a third-party company to assist with ERP implementation. Not only will these companies understand how to use the technology, but as an outside source, they will be more likely to point out its weaknesses. - The Forbes report also suggested that executives and IT leaders develop a plan in case the company runs into any problems to mitigate any potential risks.