Deploying an enterprise resource planning (ERP) system is an expensive proposition, not just in terms of licensing and maintenance, but in terms of dedicated resources and time. The implementation of ERP systems has helped small and mid-sized companies, significantly improve their business metrics by process optimization, improving the entire supply chain process, better inventory control, better reporting to take decisions, integration across functionalities and increasing transparency across the company. Purchase department can see the sales department data, Sales department can see inventory data, and top management can see any data on a click of single button.
2. Outline
• How to plan ERP project
• System Development Life Cycle
• Planning of ERP project
• New methodologies
• Waterfall methodology
• Rapid application development methodology (RAD)
• Extreme Programming Methodology
• ASAP: Accelerated SAP
3. Reasons to Replace Your ERP System
1. The current system lacks function, is hard to use, slow, and/or inflexible. These are probably the most obvious reasons,
and companies experiencing these kinds of issues should not hesitate to find and install a replacement system
2. Operating costs are too high. Older system can get increasingly expensive to operate, especially if the software is no
longer supported by the developer, the hardware is antiquated and increasingly unreliable, or if there are a lot of
modifications (made to overcome limitations mentioned in the first bullet).
3. It doesn’t support current business needs like web sales, collaboration or business intelligence.
4. Your people rely on spreadsheets to get their jobs done. This is a big red flag. If the function can’t be accomplished within
the system (or usability is lacking so it’s perceived to be easier to use spreadsheets) you are not getting the benefits you
paid for and the system is not supporting your business needs.
5. You lose business to competitors because they are simply easier to do business with or their customer service is better.
This may not be entirely the fault of the system but the system may be hampering or limiting your effectiveness in
pleasing the customers, answering their questions, or delivering products on time.
6. Your company is growing or changing faster than the system can support and you need better control of your processes.
When new processes and technologies start showing up in your market, do system limitations prevent you from moving
forward against the competition? How long does it take your ERP supplier to add new functionality?
7. Decision-makers are frustrated by lack of easy access to the information they need about the business, sales and
markets.
4. Common ERP Functional Requirements
1. An integrated system operating in
or near actual real time without
reliance on periodic updates
2. A common database supporting
all applications
3. A consistent look and feel across
modules
4. System installation with elaborate
application integration by the in-
house IT department
Distribution Process Management
Supply Chain Management
Price Configuration
Financial Data Management
Project Planning
Redundant Task Reduction
Business Needs Assessments
5. How to create ERP value
• ERP creates value through
1. Integrating activates across a firm
2. Implementing best practices for each business process
3. Standardizing processes within organizations
4. Creating one-source data
5. Providing on-line access to information
• facilitate better organizational planning,
• communication, and collaboration.
6. Most used ERP Modules
Module Degree of module used by
companies
Financial and Accounting 91.5%
Materials Management 89.2%
Production Planning 88.5%
Order entry 87.7%
Purchasing 86.9%
Financial Control 81.5%
Distribution/logistics 75.4%
Example
10. Ways to Developing ERP System
Method Advantages Disadvantages
Develop in-house Best fit with organizational needs Most difficult to develop, most expensive,
Slowest
In house system with vendor
supplements
Gain commercial advantages combined with
organizational fit
Difficult to develop, Expensive, slow
Best-of-breed Theoretically gain best of all systems Difficult to link modules, slow, potentially
inefficient
Customized vendor system Retain flexibility while keeping vendor expertise Slower, usually more expensive
Selected vendor modules Less risk, relatively fast, least expensive If expand, long run time and cost higher
Full vendor system Fast, less expensive, efficient Inflexible
Application service provider Least risk, least cost, fastest, least subject to
vendor change
At the mercy of the provider, no control,
and subject to price increases
11. Critical Success Factors in ERP
1. Clear understating of strategic goals
2. Commitment by top management
3. Excellent implementation project management
4. Great implementation team
5. Successful coping with technical issues
6. Organizational commitment to change
7. Extensive education and training
8. Data accuracy
9. Focused performance measures
10. Multisite issues resolved
12. Levels of IS/IT Failure
• Corresponding failure
– Don’t meet design objectives
• Process failure
– Not on time &/or not within budget
• Interaction failure
– System not used as designed
• Expectation failure
– Return not what stockholders expected
13. Factors in ERP Implementation Failure
Scenario CIO/IT Focus Typical outcome
Technological determinism Technical Fail to gain business
benefits
Supplier/consultant driven Disregarded Cost overruns
Outdated relationships &
capabilities
Insufficient talent Chaos
14. Factors to Reduce Risk
• Business case
• Justify need for system, establish objectives
• Benchmark
• Import best practices
• Implementation strategy
• Align system with corporate strategy
• Project management
• Change management
• BPR
• Installation
15. Open Source ERP
• Reasons of Choosing open source ERP
1. cost
2. Free redistribution
3. Available source code
• Available providers
There are many vendors providing open
source ERP systems. For example:
1. Open MFG
2. FISTERRA
3. ERP 5
4. Compiere
5. Odoo
16. ERP System Needs
It must be unified with applications and interfaces easy to use and working seamlessly
across multiple departments
A common database or multiple shared databases accessible through all applications
Search and report utilities
Scalability, customization, and easy integration of additional modules as needed
Database and information management software for a single central or for multiple
interconnected databases with data flow to and from all. The defined workflow makes
data movement seamless. Database hosts can be local, remote, or cloud-based.
17. ERP System Needs
Applications and interfaces with suitable read-only or edit access controls to process data. For
ERP content, when a writer submits content for review, only the editor should have access to it to
prevent duplication and conflict.
Workflow management where data updates and actions follow a logical sequence based on
business needs.
Report generation usually available in either dashboard form or data-editing applications like
spreadsheets on management, department, team, and individual levels is another important ERP
need.
Communication in ERP systems is by automated mail generation, instant messaging, chat, or
general broadcasts at individual and group levels.
18. SDLC
• Systems Development Life Cycle : the overall process for developing
information systems from planning and analysis through
implementation and maintenance
19. Project Planning
• Set up project administration
• Staff project
• Set goals and objectives
• Acquire project resources
• Define metrics
21. Traditional Systems Development Life Cycle
Detailed analysis of system using tools and techniques to determine
problem areas
– Process models
– Data models
Phases
1. Problem definition
2. Feasibility study
3. Systems analysis
4. Systems design
5. Detailed design
6. Implementation
7. Maintenance
22. Traditional Systems Development Life Cycle (continued)
Automating current system is counter-productive
– Inherit old problems and flaws
Provides opportunity to re-engineer current system
Create logical database design before details are refined
Takes too much time
Uses a great deal of resources
Expensive
23. ERP Implementation Requirements
1. Installations, which includes software, hardware and network requirements
2. Configurations and integrations
3. Project management
4. Change management
5. Data migration
6. Training
7. Documentation
8. Managing the go-live event
9. Post go-live support
10. Costs for future wish-list enhancements
24. ERP Customization
• When we customize the ERP system, we will build a function that does not
exist in the ERP software to be used. If partner ERP we cannot help us in
building this customization, it may be very troublesome us to be able to get
what we want.
Require technical expertise and in-depth product knowledge
Customization often have uniqueness of each for each solution
Requiring the addition of new features to meet the needs
25. ERP Configuration
• if you choose to configure your ERP system, you basically set up setting your ERP
system. It might sound easy, but you need to know that there will be a lot of settings,
which certainly thorough knowledge of ERP systems owned will be necessary. But
in this case you can ask for help on your partner because they certainly have
experience in these matters.
Requires knowledge of deep ERP system
Configuration is done in a variety of ERP systems usually are basically the same
Adjusting existing features to meet business needs
26. New Methodologies
1. Waterfall methodology
2. Rapid application development methodology (RAD)
3. Extreme Programming Methodology
4. ASAP: Accelerated SAP
27. Waterfall methodology
• Waterfall methodology – a sequential,
activity-based process in which each
phase in the SDLC is performed
sequentially from planning through
implementation and maintenance
28. Rapid application development methodology (RAD)
Emphasizes extensive user involvement in the rapid and
evolutionary construction of working prototypes of a system
to accelerate the systems development process
The prototype is an essential part of the analysis phase when
using a RAD methodology
– Prototype – a smaller-scale representation or working model of the
users’ requirements or a proposed design for an information
system
29. Extreme Programming Methodology
Extreme programming (XP) methodology – breaks a project into tiny
phases, and developers cannot continue on to the next phase until the
first phase is complete
30. ASAP
• Accelerated SAP (ASAP) is SAP's standard implementation
methodology. It contains the Roadmap, a step-by-step guide that
incorporates experience from many years of implementing R/3.
• Accelerated SAP contains a multitude of tools, accelerators and
useful information to assist all team members in implementing R/3.
Quality checks are incorporated at the end of each phase to easily
monitor deliverables and critical success factors.
31. ASAP Roadmap
Final
Preparation
Project
Preparation Business Blueprint
Realization
Setup of Local Project
Organization
Adaption of
Strategic Framework
Establish OCM
Procedures + Responsibles
Infrastructure Requirements
and Design
Early Adoption of Best
Business Practice Proceesses
Training and
Documentation Strategy
Data Management
Standards Implementation
Data Cleansing
and Data Preparation
Completion Check &
Prepare for Next Phase
General
Project Management
Local Business Blueprint
Documentation
Security Requirements
Infrastructure Planning
System Operation Stategy
Early Adoption of Best
Business Practice Processes
Training Planning
Data Cleansing
and Data Preparation
Completion Check &
Prepare for Next Phase
OCM Organizational
Alignment + Change Analysis
General
Project Management
OCM
Training Preparation
Configuration &
Development
Unit / Process / Integration /
Business Acceptance Testing
Early Adoption of Best
Business Practice Processes
Infrastructure
Implementation
Data Preparation & Data
Migration Simulation
Completion Check &
Prepare for Next Phase
Cutover Planning
& Preparation
Business Transition
Planning for Cutover
General
Project Management
OCM
End User Training
End User Practice in the
System
Data Migration to
Production
Infrastructure Finalization
Cutover Management
Business Simulation
Pre-Go-Live Operations
Completion Check &
Prepare for Next Phase
Final Cutover and
Controlled Process GoLive
GoLive and
Support
General
Project Management
OCM
Project Closing
System Support
Business Support
32. ERP System Migration
• Over time, need to adopt changes
• Minor modifications
• Maybe system replacement
• Vendors change products
• WHY
• The longer the time between upgrades, the harder
• Easier to support a smaller number of software versions
• Migrations can increase sales of seats, add-ons
39. ERP System Requirements (midsize company)
• CLIENT HARDWARE AND O/S
REQUIREMENTS
• Windows Client: (Minimum
Requirements)
• Intel processor (pentium and up)
• 10 MB available hard drive space
• 32 MB RAM
• TCP/IP and Telnet connection to
Linux Host
• Windows XP or better (Win
XP/7/8)
• X11 (X-Windows) Client (Client
must be Intel processor based
and support WINE)
• Linux Server Software Requirements
• Red Hat Enterprise Series
• CentOS
• SUSE
• Debian
• Ubuntu
• For all others, please contact
Fourth Generation Software
