ERP Implementation Lifecycle, by Rajesh Kanna

1. ERP Implementation Life Cycle
A MS Rajesh Kanna
rajesh@itarait.com

2. To Discuss
• Enterprise Resource Planning System
• ERP Implementation Life Cycle
– Methodology
– Critical Success Factor
– Critical Failure Factor
– Challenges
• ERP Case Study – Experience Sharing
• Discussions

3. A
R
E
V
I
S
I
T

4. Evolution of ERP
Inventory Production
1960 MRP
Purchasing Scheduling
Finance
1970 MRP MRP II
Labour
All Internal
1980 MRP II ERP
Resources
Internal
1990 ERP Customers & Internal SCM
Suppliers
External Extended
Internal
2000 Customers & SCM
ERP/SCM
Suppliers
2010
?
TIME

5. ERP is the integrated IT platform for the business

6. 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

7. Business Processes in ERP Quality Cycle Maintenance
Cycle
Production
Cycle
Sales Forecast – Confirmed Receive Indents / Plans –
Order – FG Shipping Issue Materials
Revenue Expenditure
Cycle Cycle
ERP System
Accounting
Customer Enquiry – Order
Booking – Dispatch –
Cycle Indents – Procurement –
Invoice - Invoice Processing

8. Implementing ERP System –
Project Management
Methodology
Challenges
Critical Success Factor
Critical Failure Factor

9. Implementing ERP System
Methodology
What is ..?
Why it is required..?
Benefits..?

10. 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 stakeholder
needs and expectations.
• Project Management Methodology
• To provide a standard management approach and guidelines to ensure
that projects are developed in a disciplined, well-managed, and
consistent manner that promotes the delivery of quality products and
results in projects that are completed on schedule and within budget.
• 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..?

11. Dimensions of Project Management
Life Cycle Process Knowledge
1. Definition 1. Initiate 1. Integration
2. Requirements 2. Plan 2. Scope
3. Analysis 3. Execute 3. Time
4. Design 4. Control 4. Cost
5. Development 5. Closure 5. Quality
6. Testing 6. Human Resource
7. Implementation 7. Communication
8. Risk
9. Procurement
Source

12. ITARA’s Implementation Methodology
Extended Implementation
Diagnostic
Analysis Pre-Implementation
Design
Development
Implementation
Deployment
Support Post-Implementation

13. Pre-Implementation
• Conduct Process
and System SDD Sign-Off
Study
• Conduct Kick-
Off Meeting
• Project Team
Formation
• Fixing Roles and System Study
• Project Responsibility
Preparation
• Preliminary
Kick-Off Meeting
Discussions
Project Organization • Solution Design
Document
Preparation
• Discussion
Project Plan • Sign-Off

14. Implementation • Conduct CRP
Go-Live
• Course Corrections
• Conduct Module
Testing and User
Acceptance Testing
• Start
Configuring
Modules and Data
SDD Processes
• Master Data
Migration
Collection – Training
Scanning -
Upload
• Setting Up
Servers,
CRP
Connectivity • Perform Data
etc Migration
Modules Activities
Configuration • Ensure Go Live
• Conduct User Day-1 Reports
Master Data Training and
Evaluate
Training Feed
Infrastructure Back

15. Post Implementation • Confirm
Project
Completion
• Sign-Off
• Provide
Support till
Warranty
expires
• Log Post Live
Issues
• Review and
Resolve Issues
• Establish Help
Desk Function
Completion
• Appoint CRM
Support Team Warranty Support
Post Live Issues
Help Desk

16. 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

17. 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
….

19. 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

20. 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

21. An Experience Sharing

22. 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.

23. 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.

24. The Implementation
• About project
– Goal: Role out Single ERP Team
application to service the global ◦ Steering Committee - Trident
customers.
◦ Core Team - Trident
– Retire the legacy Application.
– Users CTQ’s to be met ◦ Application User Team - Trident
◦ Functional Team - ITARA
• Methodology ◦ Project Leader
– Water Fall ◦ Functional Consultants
◦ OpenERP Developer
• Users
– 15 Business Users ◦ Tiny ERP Support
– 15 Project Users - R&D
– 10 CRM Users Time line
◦ 4 Months (P) / 6 Months (A)
• Location
– Multiple location - HQ in
Coimbatore Support
– User across India ◦ Off-Site / Remote Login

25. 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

26. 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

27. 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.

28. 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 Bottom Line
• User acceptance
• 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

29. Discussions..?

30. Thanks