ERP Process
Enterprise Resource Planning software offers you many modules which are tightly
integrated with each other. The modules handle all functions related to engineering,
Sales, planning, materials, manufacturing, finance, HR etc. Multiple locations can be
seamlessly integrated into a single ERP System.
Process is nothing but a systematic flow of work done. Process management is
defined as the collection of activities corresponding to the planning and observing the
effectiveness of a certain business process. This is true to ERP process too. ERP
implementation some times calls for cultural changes in the enterprise. Typically
ERP process has the following stages. Strategic planning, Readiness assessment,
Vendor assessment and selection, Plan for Implementation, Implementation and post
Implementation Assessment.
1. Strategic Plan is to define the need and to provide the rationale for the
implementation of Enterprise Resource Planning systems. This first step of
ERP process some times is the most difficult and may take few months. Every
Enterprise is bound have processes already automated. Lack of co-ordination
of the Information Technology sometimes allows individual departments to
automate their processes using internal resources. Some times, each division
would have automated their process in a platform they are comfortable with,
resulting in different systems on different platforms that are difficult to be
integrated into a single system to leverage company wide automation. In this
case, the best way to integrate different processes is to plan for ERP. Once the
need is agreed upon, formal meetings with all the stake holders may result in a
strong business case for ERP implementation.
2. Second step of ERP Process is readiness assessment. While all stake holders
agree that there is a need for Enterprise Resource Planning system, it is
required to study if the enterprise is ready for the same. Do you have a strong
Information technology department that can be the catalyst for your ERP
implementation? You need to address technical preparedness like the servers,
networking and the required manpower to manage the same from the IT
infrastructure front. At the same time, you need to assess your enterprise’s
functional preparedness like functional specialists in each department, their
skill levels, their willingness to change etc. You need to address culture
change and its affect, communication and leadership. Once the organization is
clear about ERP, its advantages and what is to be expected from ERP side as
well as the individuals dealing with ERP, progressing further with ERP
implementation will be smooth.
3. Vendor Assessment and selection is third step of ERP process. You need to
document your business practices and let the ERP vendors offer their
solutions. However, you need to understand how your existing processes may
be affected by the new ERP solution. Basically you need to chart your
processes and map them to the various processes of different ERP packages
available. First step is to identify the appropriate ERP software for your
application. Many times, some ERP implementing companies offer better
service in implementing specific ERP software. Identify the ERP
implementing partner. Device a screening process which may include a
request for Information, reference checks, demonstrations, Request for
Proposal and presentations. Take help from an external consultant, if required,
to identify the ERP package and implementing partner.
4. The fourth step of ERP Process, planning the implementation, is to create a
comprehensive plan to implement the Enterprise Resource Planning system.
Create a scope document that spells out the purpose, scope, budgets, timelines
and the responsibilities. Establish the process for communication and facilitate
problem tracking and facility for escalating unresolved issues to higher
authorities.
5. The most stressful and the most time consuming part of the ERP process is the
Implementing the ERP phase. You are required to work with a plan,
schedule, track and control tasks and issues and as well as maintain logs.
Many a times you may like a process to be configured the way you want and
the implementing partner says it can be done differently. You need to take a
critical look at the options available at that time and decide accordingly. If you
have some other computerized systems that feed ERP and takes data from
ERP, you need to be extra careful. It is reported that even the best ERP
software can satisfy up to 75-80% of your requirement. Balance 20-25% is to
be addressed very carefully by you, where you need to customize the ERP
software or work around the system. Testing each process and training end
users to use each process as configured in the software are also integral part of
this phase.
6. The final step of ERP process is Post implementation Assessment. Here, you
look back at your objective and how much you have achieved. Actually this is
not the final step. This is the first step to fine tune your ERP process. You take
the feedback and study the GAP analysis, so that the ‘missing’
features/processes are addressed to bring in more productivity.
One can implement Enterprise Resource Planning systems in two different ways,
phased manner or ‘big-bang’ approach. In a phased manner approach, you role out
ERP in one department and keep running your current system in parallel. Once the
ERP process is smooth, migrate from the existing process to ERP and then address
another department. In big-bang approach, a separate team works on ERP process,
with out disturbing the current process. ERP is configured and implemented in one
go. Both the approaches have their advantages and disadvantages. You are the user
and no one knows better than you, what is required for your organization. Hence you
need to involve more and see that your ERP implementation is a success.
Credit: MIS Notes_MGU
MBA- Knowledge Base