ERP Implementation Life Cycle
A CASE STUDY FORM HM / AVTEC
Pre evaluation screening
 Package evaluation
 Project planning phase / milestones
 Team / team leader finalization
 Vendor / implementation partner
finalization
 Requirements / gap analysis
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ERP Implementation Life Cycle
A CASE STUDY FORM HM / AVTEC
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Re Engineering
System Configuration / System
Integration
Implementation Team Training
Data Migration / Verification
System testing
Trails / user walkthro’
End User Training
GO LIVE
Post implementation metrics
ENTERPRISE RESOURCE PLANNING –FOR HMPPD
A PERSPECTIVE ANALYSIS
SA
HMPPD / MIS / 03-01-05
AGENDA
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Executive Summary
HM-PPD - Present I T Status , Issues and risks.
Present Business Need / HM PPD Challenges
Alternatives evaluation and related SWOT analysis
Comparison in ERP and related SWOT analysis.
 Oracle / Peoplesoft
SAP
Action plan / CFT for Implementation
Phased Implementation Methodology / suggested benefits
Proposed Recommendation
Proposed New System Arch.
SA
HMPPD / MIS / 03-01-05
Executive Summary
 Current Business Needs in I T :
 In the present context of global competition, it is imperative that Organization
adapt current technology trends in Information Management for an improved
Business AGILITY and competitive edge in Business.
 Also the present Market Conditions demand a GLOBAL MARKET REACH,
supported by a SECURE, RELIABLE & STABLE IT ARCHITECTURE, with
very high availability. As such these are now a “ De-facto” organizational needs.
 Current Issues in I T in HM-PPD :
 Obsolete I T Systems Hardware / Network / RDBMS
 Support for Database ( INGRES) withdrawn from Party M/s Mastek
 Manpower Crisis due to very high attrition.. reduced from 8nos to just 3 ( 70 % )
 Support for Database Alpha SERVER being withdrawn by H P from Sep ’05
 Overall a serious risk in ongoing maintenance of both Hardware& Database
 A clear ‘end-of-the-road’ crisis situation and needs immediate change / action
SA
HMPPD / MIS / 03-01-05
Executive Summary
 Briefing on evaluation of alternative ERP :
 Evaluation & Comparisons were made between S A P and Peoplesoft E R P
 In the process of evaluation parties M/S ‘S A P’ and PEOPLESOFT had
made presentations on Product features, ease of Configuration, Support
Commitment implementation Cycle Time etc.
 Emphasis was also laid on our Specific needs as TCO, Skills availability,
adaptability Market leadership etc. A detailed RATING POINTS is enclosed
 PPD had also initiated in house ERP development with Vendor M/s LINC SW
& designed Prototype, which is now put on hold in view of ERP Evaluation.
Overall in terms of Rating comparison ‘ S A P ’ appear to have a clear EDGE as
Compared to Peoplesoft ( Subject to negotiation of TCO ). Rating comparison &
SWOT analysis are indicated separately,with tips on effective implementation.
SA
HMPPD / MIS / 03-01-05
Executive Summary

With the increasing Criticism on ERP Vendors on HIGH TCO , prices are
expected to be lesser than before and would be around one Crore for 60
Users License and also for Implementation. To this the cost of Network,
communication and Hardware is to be added which is expected to be
identical and Overall Cost Outlay is estimated to be around TWO Crores.
DETAILED PERSPECTIVE ANALYSIS IS ENCLOSED
SA
HMPPD / MIS / 03-01-05
Present Status & issues in Manpower / Database / Server
 General
 High Manpower Attrition over 70 %
 Ingres crashed when a Export Sales was
being Invoiced.
 Declining enhancements ./ low uptime due to
Obsolescence.
15
10
Manpower
5
0
I
II
III
IV
V
 RDBMS ( Ingres)
 Product Related : Ingres is also not upgraded or updated for the past several months & \
GUI, web / XML features is not supported..
 Service Related : There is no direct support from Mastek, Needs high AMC Cost
 SERVER ( Dec Alpha 800)
 Dec Alpha, though a reliable architecture, is not OWNED by any one due to regular
take over and NOW OBSOLETE
 No clear road map for future growth .. Clearly “ end-of-the-road” situation.
 Potential risks of down time, as Support is withdrawn from Sep’05.
POTENTIAL BUSINESS RISK … MANPOWER / HARDWARE / SOFTWARE
SA
HMPPD / MIS / 03-01-05
HM PPD – IT Strategy and Focus Areas
 The following are the focus areas as per HM PPD’s IT Strategy
 Development & Implementation of State of Art Web & XML enabled RDBMS in a
current Business Server offering flexibility, Security & high reliability / availability.
 Full Migration to GUI & OPEN STANDARDS of FRONT END ( IBM lBasic / Web
sphere)
 To fulfill this objective it is STRATEGICALLY IMPORTANT to have a stable, reliable & secure
Database / Server Arch.with high availability, supporting web interface, XML / GUI / WEB
technology, OLAP, Business Intelligence etc. The present database of INGRES does not
support this.
 POPULAR ERP AS ‘SAP ’ or ‘ PEOPLESOFT ‘ FULLY SUPPORT THIS BUSINESS
NEED & I T STRATEGY
SA
HMPPD / MIS / 03-01-05
Present Business Need
Business Challenges clearly demand high AGILITY and response to
contain cost, improve cycle time, better retention of customers etc
through a better and Improved Business functionality with ERP.
As indicated in this chart a VAST
MAJORITY HAD RESPONDED THAT
ERP is already in Use ( in SMB / MFG /
AUTO Sector )( SAP/ BAAN / Peoplesoft)
ERP in use
Under Impl
Evaluation
No eRP
SA
HMPPD / MIS / 03-01-05
Present Business Need
To meet Business Challenges VAST majority of Organizations in &
around HOSUR / BANGALORE have a better & Improved Business
functionality with ERP Applications Software.
Percentage of Companies in Discrete MFG
Sector who have Implemnted ERP package
ERP in use
Under Impl
Evaluation
No eRP
SA
HMPPD / MIS / 03-01-05
Present Business Need
Aberdeen report for SMB / AUTO sector summarizes following as key
Concerns
• Pressure to REDUCE Operating Cots
•
•
•
•
•
Need to improve Productivity / Cycle Times
Concern for Topline growth / Customer growth / retention
Commoditization of Products and Services
Product Innovation / enhanced R & D
Improved Retention / Hiring of Key talents
Response as to what BEST STRATEGY is adapted to meet these needs
posed to Leading FORTUNE Companies, the responses are as under…
• 21 % responded that SIX SIGMA / LEAN MFG as key success Strategy
• 49 % responded that ERP / CRM / SCM / SRM as key success Strategy
• 30 % responded on other strategies
SA
HMPPD / MIS / 03-01-05
HM-PPD CHALLENGES
 The following are perceived as PPD issues / challenges in terms of I T solution
** High / Imbalanced Inventory / High operating Cost
** Productivity / Cycle time/ Lead time Improvement
** Cash to cash Cycle time high – High receivables
** Dynamic / immediate response to planning / changes in planning
** Dynamic response /compliance to STATUTORY / TAX related changes etc.
 THESE CHALLENGES ARE BEST MET BY ERP PACKAGE
 The following is also a MAJOR CHALLENGE in ERP Implementation in HM-PPD
** With the BPR enabled Streamlined and proven Business Process, with
a clear Process MOPs, value added, quality certified processes /, etc.,
ADAPTABILITY of this process and CONFIGURATION of the Business
Process in ERP System would be a complex task.
**
We may need to Compromise some proven Functionality to fall in line with
the ERP package. However the matter MUST BE RESOLVED by related
Implementation Consultant
SA
HMPPD / MIS / 03-01-05
Alternatives & SWOT analysis
Functionality / SWOT
In-House
ERP
Packaged
(SAP /
Peoplesoft)
Remarks
High Integration
Web/ Net Enable
Workflow enabled
World Class Bench Mark
/ Business Process
Weak
Strong
Packaged ERP
is better
T C O( total cost of
Strong
Weak
In House ERP
less by 75 %,
in terms of
TCO
BI Capability
Weak
( Business Intelligence)
Strong
Opportunity
in SAP
Attrition
Weak
Common
Threat
ownership)
Weak
OTHER THAN A HIGH TCO … PACKAGED ERP IS SUPERIOR FOR BUSINESS
SA
HMPPD / MIS / 03-01-05
ERP : Comparison between S A P / Peoplesoft
60
50
40
30
20
SAP
Peoplesoft
OTHERS
10
0
Source : CIO magazine

Many benchmark comparisons and white papers rate S A P as superior product. Though they
are Criticized for high T C O. Overall they enjoy a high Market Share of nearly 50 % in the
Engineering Industries / AUTO Sector as shown above.
RATING COMPARISON IN TERMS OF SWOT ANALYSIS IS ENCLOSED FOR SAP / Peoplesoft
SA
HMPPD / MIS / 03-01-05
ERP : S A P / Peoplesoft – Comparison
HMPPD/ HMCCP / HMPUP Team rating
Criteria
KR
Voting by Team Members in 0-10 Scale
ML
SA
VRB
SKJ
AKM
Statutory Compliance - Response
Support - Product
Population - Market Share
Implementation Time
Total Cost of Ownership
People / Skill availability / Attrition
Ease of Configuration
Product Enhancement
Adaptability / Suitability to business
9
8
10
8
8
8
7
5
4
10
9
9
8
8
6
7
6
6
9
9
7
9
9
8
7
6
5
Implementation Partner:
BS
IBM
BC
Track Record
Skills availability
Commitment
Cost
Total
5
5
10
8
28
8
8
8
5
29
7
7
8
7
29
9
9
8
8
6
6
6
6
5
9
9
7
9
8
6
7
5
6
9
9
9
7
5
6
5
7
6
Total
Av
55
53
50
49
44
40
39
35
32
9.2
8.8
8.3
8.2
7.3
6.7
6.5
5.8
5.3
Software
SAP
PS
7
8
8
8
7
8
7
8
8
69
5
6
2
8
8
5
8
5
6
53
(KR- K Ramesh, ML- MurariLal, SA- S Appan,VRB-V Rajeshbabu,SKJ- S K Joseph,
AKM-AK Mathur ) BS = Birlasoft , BC = Bristle Cone
HMPPD / MIS / 03-01-05
ERP : S A P / Peoplesoft – Comparison SWOT ANALYSIS
CRITERIA PARTICULARS
SAP
a) STRENGTH
TRACK RECORD
MARKET SHARE- AUTO SECTOR
Bench mark World class PROCESS
Product Enhancements
8
8
8
8
SWOT ANALYSIS RATING ( 1 to 10 )
PeopleSoft
REMARKS
6
6
7
7
SAP Market presence for over 14 yrs.
WEB Services / Web enabled process
24x7 World wide product support
7
8
8
6
Peoplsoft developed in WEB SPHERE
SW
SAP is rated better
b) WEAKNESS
Configuration Complexity
Skills Availability / Attrition
HIGH TCO / AMC COST
6
5
5
7
5
7
Peoplesoft Relatively simpler
Common Problem
SAP is more expensive
HMPPD / MIS / 03-01-05
ERP : S A P / Peoplesoft – Comparison SWOT ANALYSIS
c) OPPORTUNITY
Industry Vertical Solution
Business Intelligence feature
SAP
7
7
Peoplesoft Remarks
5
S A P is rated better
5
…do…
d) THREAT
Acquisition threat
8
2
Support withdrawal / product fading
8
5
AGGREGATE RATING
NETT RARING ( 1 to 10 SCALE)
Peoplesoft taken over by Oracle
Peoplsoft product support withdrawal a
distinct possibility
93
76
7.2
5.8
Source : IDC BENCH MARKS
HMPPD / MIS / 03-01-05
ERP : S A P / Peoplesoft – Comparison / SWOT

S A P (VS) PEOPLESOFT
** S A P has offered to transfer ‘FREE OF COST’ unutilized / excess licenses available
at ‘ HM-CCP’, to other divisions. This would be beneficial in terms of TCO.,and saves
COST.
**
Recent take over of “PEOPLESOFT” by ORACLE, would mean that the Commitment for
Product Support and enhancement would suffer as ORACLE may pursue their own range
of “ORACLE ERP ‘. This would be a definite RISK in the long term period, for customers of
‘PEOPLESOFT’ and fading of this product range by ORACLE may be a distinct possibility.
We also have positive feedback in terms of Product Support Commitment by S A P
from HM-CCP and regular Product enhancements by S A P.
Overall the above SWOT analysis makes S A P a preferred choice.
HMPPD / MIS / 03-01-05
ERP : ACTION PLAN – CFT FOR IMPLEMENTATION
PRIMARILY ERP IMPLEMENTAION STARTS WITH THE
FOLLOWING BASIC NEEDS
a. TOP Management / Executive Sponsor / Commitment
b. CFT Formation – Various Function for FULL TIME
c. ERP BENEFITS / GOAL Targeting / Brain Storming
d. Partner selection – CFT to involve to target ERP goals
e. PHASED IMPLEMENTATION PROJECT PLANNING
( Indicated in the enclosed pages )
HMPPD / MIS / 03-01-05
ERP : ACTION PLAN – CFT FOR IMPLEMENTATION
 Number of other white papers have clearly stated and users also have confirmed that
ERP System is a Company Wide, top driven Change Management Commitment.
 Over 66 % of ERP efforts are SOFT SKILLS as TEAM Commitment, TOP EXECUTIVE
support, CFT formation & FULL TIME Involvement in implementation,users commitment etc.
 In summary various aspects of successful implementation based on survey is shown below
User Involvemnt
Team
Commitment
Vendor Support
ERP Success
Partner Skills
CFT Commitment
TOP M GM T
Support
0
1
2
3
4
5
6
7
8
9
10
Source
: META Group
HMPPD / MIS / 03-01-05
ERP : ACTION PLAN – CFT FOR IMPLEMENTATION
TOP MANAGEMENT TEAM TO PLAN STRATEGIC VALUE
PROPOSITION WITH ERP.
Time = 3- 4 Yrs
Strategic
Value
CONTROLS /
REPORTING
TRANSACTION /
BUSINESS PROCESS
CFT / HODS TO PLAN CONTROLS / TARGET REDUCED
INVENTORY / REDUCED OPERATING COSTS etc.
CFT TO PLAN STREAMLINING PROCESS
PRODUCTIVITY IMPROVEMENT / THRO’PUT
TIME REDUCTION ETC & TARGET MANPOWER
RATIONALISATION IN SUPPORT AREAS
Time = 1-2 Yrs
Time = 6M-1Yr
It is important to follow the above step FISRT and TARGET ERP GOALS for all the 3
Spheres of Management Hierarchy…. for next 3 to 4 years
HMPPD / MIS / 03-01-05
PHASED IMPLEMENTATION METHODOLOGY / BENEFITS
 Phased implementation methodology is the most successful approach to ensure effective
and Timely ERP Implementation
 As indicated in the CHART below a vast majority have implemented FINANCE and the
MATERIALS first , though a few have attempted a BIGBANG approach
70
60
50
40
Finance/Matls
30
BIGBANG
20
OTHERS
10
0
HMPPD / MIS / 03-01-05
PHASED IMPLEMENTATION METHODOLOGY / BENEFITS
 Phased implementation methodology is briefly presented below
I Phase- Sponsor / Plan
• Project Scoping/funding
• Staffing / CFT Formation
• Benefits Targeting
• Change mgmnt approach
II Ph: Business Process Mapping
• Business Process Model/design.
• Process / Data analysis
• Process Modeling for ERP
• Data Analysis
III Ph: SW Configuration
• Process Configuration
• SW / Process Interfacing
• Sizing / Data Cleansing/
Reporting
HMPPD / MIS / 03-01-05
PHASED IMPLEMENTATION METHODOLOGY / BENEFITS
 Phased implementation methodology is briefly presented below
IV Phase- Data Migration
• Data Conversion / Testing
• Interfacing / user testing
• Integration Testing
• End user training
• Pre Production run
V Phase – GO LIVE
• HELP DESK .
• INTERFACE SUPPORT
• Process Improvements Monitor
• Data Analysis / Benefits Monitor
HMPPD / MIS / 03-01-05
Conclusion / Recommendations
 ERP / I T are presently ESSENTIAL INFRASTRUCTURE for a
competitive Business Agility and dynamic response to Customers
 It is imperative that we soon adapt a suitable ERP as a part of
our overall Business Infrastructure, to stay competitive
 In HM-PPD, where we already have a streamlined business
process and a in-house ‘near ERP package’ in legacy System,
CONFIGURATION of our process for ERP System may pose
complex issues. However this is to be fully examined so that we
do not compromise proven functionality
Over all the trends strongly suggest that ERP package is becoming quite
essential. Propose System Arch. is enclosed
HMPPD / MIS / 03-01-05
PROPOSED NEW Architecture
BACKEND
DB2-RDBMS
Thin
Client
Rich
Client
HMPPD / MIS / 03-01-05