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IS 466
ADVANCED TOPICS IN
INFORMATION SYSTEMS
LECTURER : NOUF ALMUJALLY
21 – 9 – 2011
College Of Computer Science and Information, Information Systems Department
Lessons Learnt from Lecture1
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Define the ERP ?
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ERP systems are packaged software systems that Automates and
integrates business processes by sharing common data and practices
across the entire enterprise and produces and accesses information in
a real-time environment
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The benefits of the ERP System
The Disadvantages of ERP?
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ERP Components
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(cost- expertise- change – flexibility)
(business process – software – hardware – users)
ERP Vendors
Objectives
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ERP system concept
Who is involved in the implementation?
How long does it take?
ERP implementation methodology
Organisational characteristics and implementation
methodology
ERP lifecycle
Legacy Systems
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Each department has its own system
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Infrastructure specific
Inefficient processes
Potential for inaccuracies
Limitations of Legacy Systems
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Legacy systems used in large enterprises of the
1970s and 1980s have limitations.
Difficult to increase the capacity of such systems
Unable to upgrade them with the organization’s
business changes, strategic goals and new information
technologies.
ERP System Concept
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ERP System Concept (cont.)
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Data warehouse
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Large, centralized
data repository
Single place for
data storage and
access
The Journey Begins:
ERP Implementation
Summary of ERP implementation background
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Most likely, an ES implementation would be the first, biggest
and possibly the last large system implementation.
Which could take many years to go-live and millions of dollars.
Many parties are involved in the implementations.
They bring in different knowledge types to the organization.
75% of ES implementation costs are devoted to Consultants,
NOT on Systems and Hardware.
A lot of time and money spent on Requirements Analysis phase
trying to figure-out what is required for the organization.
There are well-documented Critical Success Factors for ES
implementations...including Consultant Engagement, Top mgmt
support, … etc
Who Is Involved?
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Vendor who develop the ERP packages.
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Consultants that provide the installation, training & configuration
services
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End Users
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In house implementation teams that plan and execute
implementations of SAP
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SAP and in-house support teams that help trouble shoot
problems and support installations.
VENDORS
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DEFINITION:
 Vendors are the people who develop the ERP
packages.
 they spent a huge amount of time & effort in
research & development to create the package
solution that is flexible, efficient and easy to use.
 The ERP vendors spent a large amount of money so
that they can become experts, to develop a
flexible, efficient & easy to use ERP package.
ROLES OF VENDORS
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The vendor should supply the product & its
documentation as soon as the contract is signed.
The vendor is responsible to fix the errors which are
found during the implementation process, so it
becomes necessary that the vendor should be
constantly touched with the implementation team.
The vendor also has to provide the training to the
company’s user & also to the people who are
involved in the implementation process of the s/w.
ROLES OF VENDORS (con.)
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The vendors training should explain how the package
works, what are major components, how the data &
information flows across the system, etc.
The vendors participate in all the phases of an
implementation in which he gives advices, answers to
technical questions about the product & technology.
In case, there is gap between the package & the
actual business process then it is the job of a vendor
to customize the s/w & make necessary modifications.
CONSULTANTS
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DEFINITION:
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Business consultants are professional people who develop the
different methods & techniques to deal with the
implementation process & with the various problems that will
crop up during implementation.
They are experts in the area of the administration,
management & control activities.
They have experience of implementation & various methods
that ensures successful implementation.
The only limitation with consultant is they are very expensive.
They have to make a plan to carry the activities in the right
direction during the implementation process.
ROLE OF CONSULTANTS
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The consultants are involved in the implementation process
of the organization.
The consultant should guarantee the success of the project
and should be able to show the results such as reduction in
cycle time, increased response time, improved productivity,
etc to the satisfaction of the customer.
They are responsible for the administration of all the phases
of the implementation so that the activities occur at the
scheduled time and at the desired level of quality with
effective participation with all those who must participate.
They add value to the project as they provide knowledge
about the packages & the implementation process which
gives the employees the practical experience.
END USERS
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DEFINITION
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They are the people who use the ERP system once it has
been developed.
The end user should be given the training as to how use
the various functions that are automated in the ERP
system.
They fear among the employees of unemployment is
taken out with the training sections.
The end users are provided with the skills set & more
opportunities to work in a challenging environment using
the modern technologies.
How Long Does the implementation Take?
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Large Organizations spend 2 to 3 years on their
initial implementation
Value SAP approach allows a basic implementation
in 6 to 9 months
Smaller organizations have implemented in 3 to 4
months
Must be prepared to implement
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Education and Training
Prepare organization for change
ERP Implementation Methodology
ERP Implementation methods
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“Phased” and “big bang” are the two primary approaches
used to implement ES.
This lecture will investigate..
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what these terms mean,
some properties of each approach, and
some of the advantages and disadvantages of each.
This lecture will also analyse the choice of the
implementation methodology in light of
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organisation size,
complexity, and
structure and in terms of overall extent of the implementation.
What is a Big-Bang implementation?
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In a full big-bang implementation, an entire suite of ES applications is
implemented at all locations at the same time.
Using Big-Bang, the system goes from being a test version to being the actual
system used to capture transactions in only a matter of days.
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Big bang requires simultaneous implementation of multiple modules.
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The big bang approach usually employs a three-step process.
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All relevant processes and artefacts are chosen (or developed) and implemented in
the software.
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All modules are tested individually and for their interfaces with other modules.
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The old system is turned off and the new system is turned on.
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A lot of prayers..
What is a phased implementation?
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A phased approach is one where modules are implemented one at a time or
in a group of modules, often a single location at a time.
Phased implementations are sequential implementations that consist of
designing, developing, testing, and installing different modules.
Unlike big bang, phased implementations require that substantial attention
and maintenance be given to legacy systems in order - at each phase - to
facilitate integration with the new ERP system.
As compared with big bang, the phased approach has smaller “slices” of
module process and artefact design, development, testing, and
implementation.
What are the advantages of a big bang
approach?
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Limited need to maintain and revise legacy software;
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Lower risks;
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Immediate Functionality linkage;
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Shorten implementation time;
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Lower cost;
What are the advantages of phased
implementations?
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Peak resource requirements are less than with big bang;
More resources can be devoted to a particular module;
Legacy system fallback;
Personnel gain knowledge in each phase;
Project manager can demonstrate a working system;
What are the disadvantages of Big bang?
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Huge peak resources may be required;
Fewer resources will be available for a particular module;
The risk of total system failure may be higher;
Cannot readily go back to legacy system;
Personnel have fewer hands-on opportunities to gain
knowledge;
Project manager can’t show that it works until the system is
entirely installed; and
What are the disadvantages of phased
implementation?
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Need to maintain and revise legacy software;
Higher risk of uninvolved and uncoordinated personnel;
Higher risk of losing personnel to turnover;
May not be enough modules implemented to achieve
functionality;
Longer duration to install; and
Higher total cost.
Organisational characteristics and
implementation methodology
Sample Organizational Characteristics
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Size
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Complexity
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Organizational Hierarchy
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Number of Modules
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Extent of the coverage
1- Organisational size and complexity
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Organisational size and complexity are a critical set
of intervening variables upon which choice of
appropriate implementation methodology depends.
Small and less complex organisations use big-bang
approaches whereas larger, more complex
organisations use phased approaches.
As the size and complexity of firms increase, the
likelihood that those firms will pursue a phased
approach increases.
Complexity
PHASED
COMPLEX
Big bang
SIMPLE
SMALL
LARGE
Organisational size
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Organisational size and complexity (con.)
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Organisational complexity derives from a number of sources,
including:
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organisation’s products and customers;
characterises of products and customers;
product line.
The size of the firm also can relate to a number of factors,
including:
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revenues or total assets;
number of offices or geographic regions;
products and customers might also be used to measure
organisation size.
Number of user licenses for the ERP System.
Small, less complex firms
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For smaller and less complex firms, there will be less
variation across products and customers.
As a result, implementation of the resulting design is not as
difficult as in more complex settings.
Further, since the size is small and the design is not complex,
there is likely to be less risk of failure associated with a bigbang implementation.
Accordingly, since big bang is generally faster and cheaper,
smaller and less complex firms can effectively employ a
big-bang approach.
Large, more complex firms
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If the firm is very large and complex, then a phased
implementation is more likely to be used than big bang.
Organisational size and complexity can make a bigbang approach too difficult or the probability of
failure too high, leading the organisation to choose a
phased approach.
Analysts have suggested that most large firms use some
version of a phased approach and that few large firms
employ a big-bang implementation.
2- Organisational hierarchy and control
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Even if all other organisational issues are equal, the choice of
implementation methodology should consider
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organisational hierarchy and controls.
In general, as an organisation becomes more hierarchical with
tighter controls, it becomes more able to sustain a phased
implementation.
Flat organisation and loose controls
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“If a company has a flat organisation that is not
tightly controlled, it’s very difficult to sustain
commitment throughout a phased implementation”.
PHASED
Tall
Big bang
Flat
Loose
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Tight
Extent of controls
Extensive hierarchy and tight controls
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If the organisation structure has an extensive
hierarchy (is “tall”) and there is tight control, then
there is substantial organisational machinery to
facilitate a phased implementation.
3- Extent of implementation
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The extent of the implementation –
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characterised by the number of modules and the degree to
which the organisation changes those modules
(customization) - can also influence the implementation
methodology.
Number of modules
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Since ES are modular, organisations can choose to implement
different modules that meet their needs.
As the number of modules increases, it becomes increasingly
difficult to coordinate all the module interactions.
In addition, the amount of resources required increases with
each module chosen for implementation.
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As a result, as the number of modules increases there is a shift
from a big-bang to a phased approach.
“Module Fit”: extent of modification
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In some cases, modules will require only limited modifications,
but in others they may require substantial modification.
As the extent of change to modules increases, preferences will
shift from a big-bang to a phased implementation.
If the modules used are virtually as the vendor intended and
developed them, then interaction problems will be minimal.
Big-bang approach is possible
Few modules and minimal change
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If there are minimal changes to the modules then the extent of
testing is largely limited to vendor-tested scenarios, ensuring
the modules were properly implemented and that best
practices interface with each other appropriately.
If there are only a few modules then there will not be as many
interactions to be tested.
This means that an organisation choosing to implement few
modules with minimal change is likely to employ a big-bang
approach.
Many modules and extensive change
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Changes to the software increased in the level of complexity of
the implementation.
In particular, software changes introduce the possibility of errors
and force the need for increased testing of those changes - within
both the specific module and the modules it interacts with.
The need to implement a large number of modules generates an
even higher level of complexity.
Hence, if an organisation has chosen to implement many modules
and if some of those modules will require substantial change, then
a phased approach would be expected; in fact, high levels of
complexity may make a phased approach necessary.
Number of modules in the implementation
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PHASED
Many
Big bang
Few
Minimal
Extensive
Extent of change to be made
ERP Lifecycle
ERP LIFECYCLE
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ERP lifecycle is in which highlights the different stages
in implementation of an ERP.
Different phases of ERP Lifecycle
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1.
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Pre-Evaluation Screening
Package Evaluation
Project Planning Phase
Gap Analysis
Reengineering
Configuration
Implementation Team Training
Testing
End-User Training
Going Live
Post Implementation Phase
Pre-selection Process
Package Evaluation
Project Planning
Gap Analysis
Implementation
Team Training
Reengineering
Testing
Going Live
Post – implementation
Phase
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Configuration
End- user Training
1- Pre-Evaluation Screening
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Pre-Evaluation Screening is the phase which starts
when company decides to go for a ERP System, the
search for perfect solution starts.
Not all packages are same each has its own
weakness and strength.
Some packages can be good in some areas while in
other sectors they may not.
Once few packages are screened, detailed
evaluation process starts.
2- Package Evaluation
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Package Evaluation process is one of the most
important phase of the ERP implementation ,
because the package you select will decide
failure or success of project.
There is little room for error in this as ERP
packages are so expensive once purchased
can not switch to another.
Few important points to remember while evaluating software
includes.
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Flexibility
Complexity
User Friendliness
Technology
Quick Implementation
Amt of Customization Required
Local support infrastructure .
Total cost i.e license , training, customization etc.
3- Project Planning Phase
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In this phase details of how to go about implementation ,
schedules and deadlines etc are decided.
Roles and responsibilities are identified and assigned.
The resources that will be used for implementation efforts
are decided
This is phase which will decide:
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when to begin,
how to do it and
when the project is supposed to be completed
what to do in contingencies.
Con.
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the people who are going to be in-charge of
implementation are identified.
Team members are selected & task is allocated.
This phase plans ‘what to do’ in case of contingencies,
how to monitor the progress of the implementation.
This phase also decides what corrective measures or
actions should be taken when things get out of control.
4- GAP ANALYSIS
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Importance of Gap Analysis
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Gap analysis is a phase in the ERP implementation,
where the organization tries to find out the gaps
between the company’s existing business practices &
those supported by the ERP package.
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This is the process through which companies create a
complete model of where they are now “as is” & where
they want to head in the future “to be” .
Con.
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Different ways of finding gaps
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One of the most affordable, but most difficult,
solutions involves altering the business to ‘fit’ the ERP
package.
Another solution is that the company can simply
agree to live without a particular function.
Identifying a third-party product that might fill the
gap.
Altering the ERP source code (customization).
5- REENGINEERING
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Implementation is going to involve a significant
change in number of employees and their job
responsibilities.
Process become more automated and efficient.
6- CONFIGURATION
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IMPORTANCE OF CONFIGURATION
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This is the main functional area of the ERP
implementation.
Business processes have to be understood & mapped
in such a way that the arrived solution matches with
the overall goals of the company.
7.
IMPLEMENTATION TEAM TRAINING
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When the configuration is taking place the implementation
team is being trained not how to use the system, but how to
implement it.
This is the phase where the company trains its employees to
implement & later run the system.
The ERP vendors & the hired consultants will leave after the
implementation is over.
Employee become self sufficient to implement the software
after the vendors and consultant have left.
Con.
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Good in-house team
• For the company to be self sufficient in running the ERP
system, it should have a good in-house team that can handle
the various situations.
• Thus, it is very vital that the company recognizes the
importance of this phase & selects those employees who
have the right attitude:
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people who are willing to change
learn new things
are not afraid of technologygood functional knowledge.
8- TESTING
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This is the phase where you try to break the system.
Here we reach a point where we are testing real case
scenarios.
The system is configured & now we must come up with
extreme case scenarios:
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system overloads
multiple users logging on at the same time with the same query
users entering invalid data
hackers trying to access restricted areas & so on.
The test case must be designed specifically to find the
weak links in the system & these bugs should be fixed
before going live.
9- GOING LIVE
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On the technical side, the work is almost completedata conversions is done, databases are up &
running.
on the functional side, the the configuration is
complete & testing is done.
The system is officially proclaimed.
But once the system is ‘live’, the old system is removed
& the new system is used for doing business.
10- END USER TRAINING
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Success & failure
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People are divided into groups
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The success or failure of an ERP system depends on how the actual users
use the system.
The most successful implemented ERP packages fail due to lack of end
user training.
ERP system changes the job descriptions of the people, so it is important
to identify the people who are going to use the system. The current skills
of the people are identified & they are divided into groups.
Every group is provided training on the new system.
Training sections
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The training section gives the overall view of the system & how the
individual actions will be affecting the entire system.
11- POST IMPLEMENTATION (MAINTENANCE MODE)
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Important factors
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Necessary enhancements & upgrades
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One important factor that should be kept in mind is that the post
implementation phase is very critical.
Once the implementation is over the vendors & the hired consultants will go.
There should be people within the company who have the technical processes
to make the necessary enhancements to the system as & when required.
The system must be upgraded as & when new versions or technologies are
introduced.
Training is needed
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Everyone who uses these systems needs to be trained on how they work, how
they relate to the business process & how a transaction ripples through the
entire company whenever they press a key.
The training will never end; it is an ongoing process; new people will always
be coming in & new functionality will always be entering the organization.
Questions ??
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What should you do this week ?
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Review the lectures
Reading :
1- Michael Donovan - "Successful ERP Implementation the
First Time “
http://www.inventoryinc.com/pdf/perfor8.pdf
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Consult Lecturer if any questions related to the subject.
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