ERP Planning
Enterprise Resource Planning (ERP) is an integrated information system to take
care of all departments within an enterprise. An ERP system generally includes
software for sales, manufacturing, materials management, accounts receivable and
payable, general ledger, warehousing, transportation etc. Many ERP systems also
offer human resource management module or HRIS. Lot of effort is required for ERP
planning and implementation. First step of automating your enterprise is to set up a
committee to look into the requirement and feasibility of various ERP systems, which
may lead eventually to ERP planning.
The first stage is ERP planning and organizing. Two types of questionnaires may be
prepared. One questionnaire shall address the needs of the organization to collect the
information “as-is” and the second questionnaire to compare various features required
in the new system (ERP). This questionnaire helps you to shortlist an ERP vendor.
Then you need to define the scope of your ERP implementation.
Document your existing processes “as-is” and how you would like your processes
“would like to-be”. You need not know about any specific ERP. Even before you start
ERP planning, this document provides the base for you or your Consultant. The
consultant referred here, may not be the ERP implementing consulting company, but a
consulting company that may guide you to go for feasibility study as well as
recommend an appropriate Enterprise Resource Planning system, that is suitable for
your Enterprise.
Next step of ERP planning is to develop evaluation criteria to select the appropriate
ERP as well as the vendor. This is significant as all ERPs offer similar feature and
you need to really go into various details to identify and decide on a particular
Enterprise Resource Planning system. Hence prepare an evaluation criterion and make
and Request For Proposal (RFP) for all the potential ERP vendor and business
consultants.
Once all the Enterprise Resource Planning vendors offer their technical solutions, you
may decide on the best suited, rather than the best ERP for your enterprise. This
technical evaluation must satisfy all your needs. Hence, it is important part of ERP
planning is to have a clear understanding of your requirement and mapping the ERP
vendor’s modules. At this stage you may be short listing two or more ERP solutions.
All the ERP vendors shall offer their commercial bids along with technical bid. The
commercial bids may be opened only for the bids where they are technically qualified.
As you open the commercial bids of all the technically qualified bids, you will have
clear idea of what is going to cost you to implement Enterprise Resource Planning
system in your enterprise. During this phase of ERP planning, define project costs and
allocate budgets. You need to address all the requirements of the resources.
Even long before you kick start your ERP implementation, your ERP planning shall
take care of executive and user buy-in and their support. Many people in an Enterprise
fear that Enterprise Resource Planning system is a threat to their existence or
apprehend that the system simply will not work as they feel that ‘we know better’.
Hence training shall be an integral part of implementation.
Many ERP implementations fail due to lack of implementation strategy and project
plan. You need a good project manager who can handle ERP planning and the
implementation. He should be able to identify the problems that may arise and must
have a solution for the same. He/she should be the able to get all required approvals
though ‘Champion’ of ERP implementation of your Enterprise. ERP planning shall
address Return on Investments (ROI) and shall have milestones that can measure the
implementation status quantitatively as well as qualitatively.
Credit: MIS Notes_MGU
MBA- Knowledge Base