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SELECT, IMPLEMENT & USE TODAY’S ADVANCED BUSINESS SYSTEMS

MODERN ERP. SELECT, IMPLEMENT & USE TODAY’S ADVANCED BUSINESS SYSTEMS. Second Edition . Chapter 6: ERP Life Cycle: Implementation and Operation and Maintenance. ERP Life Cycle Stages . Planning (Chapter 5) Package Selection (Chapter 5) Implementation (Chapter 6)

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SELECT, IMPLEMENT & USE TODAY’S ADVANCED BUSINESS SYSTEMS

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  1. MODERN ERP SELECT, IMPLEMENT & USE TODAY’S ADVANCED BUSINESS SYSTEMS Second Edition Chapter 6: ERP Life Cycle: Implementation and Operation and Maintenance

  2. ERP Life Cycle Stages • Planning (Chapter 5) • Package Selection (Chapter 5) • Implementation (Chapter 6) • Operation and Maintenance (Chapter 6)

  3. ERP Life Cycle: Implementation • Installation – mechanics from changing from one software package to another while keeping problems at a minimum • ERP software cannot be installed until there is an instance to run it • Sandbox instance (or development instance) – where configuration testing and the development of customizations happens (even after go live) • Testing instance (where testing/QA happens) • Production instance – live system

  4. ERP Life Cycle: Implementation • Configuration – business and functional settings in the ERP system are changed to make the “out of the box” software support the customer’s business needs • Does not make changes to the core software code but instead uses configuration tables that enable a company to tailor a particular aspect of the system to the way it chooses to do business • Allows the company to specify thousands of options for business process and organizational setup: • Pricing methods • Credit management • Default currency • Fiscal year variants • Much much more!

  5. ERP Life Cycle: Implementation • Customization – alterations to support a business process that may be unique or provide them with a competitive advantage • May be necessary due to compliance, regulatory, reporting, or legislative requirements that the software does not meet -requires programming • Alternative to vanilla implementation, or the use of only the default options in the ERP system and the best practices built into the software • Two main types of customization: • Enhancement – used to add a field, change the look of the screen, or add and extra step to the process • Modification – change to the core code because the software does not have the capability to address the requirement and needs to be changed in the way it works • Disadvantages to customization – custom coding can be time consuming, in the end, does it really add value? can limit the company’s ability to upgrade the ERP system, ERP vendors most likely will not support code they didn’t provide, and customized systems may be difficult to integrate with other systems

  6. ERP Life Cycle: Implementation • Testing – confirms that the software behaves as expected and customer expectations are met • A dedicated development instance is used for testing • The production instance will run the firm’s operations • Conference room pilot (CRP) – sessions where conference rooms are designated as temporary locations to support development and testing, and employees can execute transactions with the proposed system configurations • Specific types of testing include: • Unit testing – testing small increments of functionality or a single development object • Integration testing – testing end-to-end business processes • Customer acceptance testing – users test the system using realist business scenarios, to their approval or acceptance • Security testing – testing all of the user roles and authorizations in the system • Performance load testing – testing business transaction volume and concurrent user activities with expected peak load

  7. ERP Life Cycle: Implementation • Change Management – body of knowledge that has evolved to address change within the context of an organization • Getting employees from Point A, prior to change, to Point B, where all employees are fully trained and new processes are in operation. • Change agent – individual designated to lead change in the organization • Someone with clout, conviction, and charisma to make things happen and the keep employees engaged

  8. Top Ten Principles of Change Management • Address the “human side” systematically • Start at the top • Involve every layer • Make the formal case • Create ownership • Communicate the message • Assess the cultural landscape • Address culture explicitly • Prepare for the unexpected • Speak to the individual

  9. ERP Life Cycle: Implementation • Interfacing with Other Systems – because of time and cost constraints, gaps in functionality, and political issues, there are usually interfaces to other systems that must be developed and maintained • Training – teaching a new set of processes, not just a new software interface • The project team should be prepared to develop a training curriculum • Six Keys to Effective ERP Implementation Training for Employees: • Focus on business processes, not transactions • Relate new business processes to the existing environment • Leverage a multitude of tools for ERP training • Use train the trainer approach • Allocate plenty of time for ERP implementation training • Reinforce training with more comprehensive organizational change management activities

  10. ERP Life Cycle: Implementation • Consultants - Assist the project team with various activities including: • Developing a business case • Package selection • Process documentation • Change management • Training • Project management • Functional knowledge • When choosing a consultant, the project team should consider: • Do they have experience in the company’s particular industry? • How many successful implementations have the completed? • Do they provide ongoing service and support? • Do we need consultants to train us to continue rolling out the software without their help after the first implementation, or do we need a single implementation configured for our use?

  11. Benefits and Risks of Using Consultants

  12. Implementation Methodologies • Phased Implementation – ERP system is rolled out by functionality (by module), division, or geographical area • Project team can focus on certain functional areas of the company while remaining areas continue with their normal operations • Big Bang Implementation – replaces all business processes and/or entire legacy system all at once • Franchising Implementation – independent ERP systems are installed in each business unit, while common processes are linked across the organizations • On-Demand Implementation – uses the hosted Software as a Service (SaaS) model • No software to install on-premise

  13. Comparison of Different ERP Implementation Approaches

  14. ERP Life Cycle: Operation and Maintenance • The operation and maintenance stage begins with a period of stabilization • Companies will experience a dip in performance due to continued training needs and fine-tuning of “to be” processes • Project team should conduct a “postmortem session” • Maintenance Activities • Preventative maintenance – regularly scheduled tasks that must be performed to keep the system functioning properly • Emergency maintenance – tasks that must be performed immediately • Software updates – ERP vendors constantly fix bugs, implement new best practices, and incorporate the feedback of customers in their software

  15. Five Ways to Reduce ERP Maintenance and Support Costs

  16. ERP Life Cycle: Operation and Maintenance • Upgrading – applying fixes and updates to the ERP system • Reasons for updating ERP systems: • Competitive advantage – new features and capabilities • Edge over other competitors • Globalization – features and updates designed to increase the flow of information to customers and business partners • Increased ability to operate globally • Integration – enhancing the flow of information between the ERP system and other systems within the company • Increased operational efficiency and improved communications • Best practices – incorporating new best practices • Operate more efficiently • Cost reduction – lowering administrative overhead and improving the support offered by the ERP vendor • Lower operating costs

  17. Reasons Why Companies Do Not Upgrade Systems

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