Enterprise Resource Planning software offers you many modules which are tightly integrated with each other. The modules handle all functions related to engineering, Sales, planning, materials, manufacturing, finance, HR etc. Multiple locations can be seamlessly integrated into a single ERP System.
Process is nothing but a systematic flow of work done. Process management is defined as the collection of activities corresponding to the planning and observing the effectiveness of a certain business process. This is true to ERP process too. ERP implementation some times calls for cultural changes in the enterprise. Typically ERP process has the following stages. Strategic planning, Readiness assessment, Vendor assessment and selection, Plan for Implementation, Implementation and post Implementation Assessment.
- Strategic Plan is to define the need and to provide the rationale for the implementation of Enterprise Resource Planning systems. This first step of ERP process some times is the most difficult and may take few months. Every Enterprise is bound have processes already automated. Lack of co-ordination of the Information Technology sometimes allows individual departments to automate their processes using internal resources. Some times, each division would have automated their process in a platform they are comfortable with, resulting in different systems on different platforms that are difficult to be integrated into a single system to leverage company wide automation. In this case, the best way to integrate different processes is to plan for ERP. Once the need is agreed upon, formal meetings with all the stake holders may result in a strong business case for ERP implementation.
- Second step of ERP Process is readiness assessment. While all stake holders agree that there is a need for Enterprise Resource Planning system, it is required to study if the enterprise is ready for the same. Do you have a strong Information technology department that can be the catalyst for your ERP implementation? You need to address technical preparedness like the servers, networking and the required manpower to manage the same from the IT infrastructure front. At the same time, you need to assess your enterprise’s functional preparedness like functional specialists in each department, their skill levels, their willingness to change etc. You need to address culture change and its affect, communication and leadership. Once the organization is clear about ERP, its advantages and what is to be expected from ERP side as well as the individuals dealing with ERP, progressing further with ERP implementation will be smooth.
- Vendor Assessment and selection is third step of ERP process. You need to document your business practices and let the ERP vendors offer their solutions. However, you need to understand how your existing processes may be affected by the new ERP solution. Basically you need to chart your processes and map them to the various processes of different ERP packages available. First step is to identify the appropriate ERP software for your application. Many times, some ERP implementing companies offer better service in implementing specific ERP software. Identify the ERP implementing partner. Device a screening process which may include a request for Information, reference checks, demonstrations, Request for Proposal and presentations. Take help from an external consultant, if required, to identify the ERP package and implementing partner.
- The fourth step of ERP Process, planning the implementation, is to create a comprehensive plan to implement the Enterprise Resource Planning system. Create a scope document that spells out the purpose, scope, budgets, timelines and the responsibilities. Establish the process for communication and facilitate problem tracking and facility for escalating unresolved issues to higher authorities.
- The most stressful and the most time consuming part of the ERP process is the Implementing the ERP phase. You are required to work with a plan, schedule, track and control tasks and issues and as well as maintain logs. Many a times you may like a process to be configured the way you want and the implementing partner says it can be done differently. You need to take a critical look at the options available at that time and decide accordingly. If you have some other computerized systems that feed ERP and takes data from ERP, you need to be extra careful. It is reported that even the best ERP software can satisfy up to 75-80% of your requirement. Balance 20-25% is to be addressed very carefully by you, where you need to customize the ERP software or work around the system. Testing each process and training end users to use each process as configured in the software are also integral part of this phase.
- The final step of ERP process is Post implementation Assessment. Here, you look back at your objective and how much you have achieved. Actually this is not the final step. This is the first step to fine tune your ERP process. You take the feedback and study the GAP analysis, so that the ‘missing’ features/processes are addressed to bring in more productivity.
One can implement Enterprise Resource Planning systems in two different ways, phased manner or ‘big-bang’ approach. In a phased manner approach, you role out ERP in one department and keep running your current system in parallel. Once the ERP process is smooth, migrate from the existing process to ERP and then address another department. In big-bang approach, a separate team works on ERP process, with out disturbing the current process. ERP is configured and implemented in one go. Both the approaches have their advantages and disadvantages. You are the user and no one knows better than you, what is required for your organization. Hence you need to involve more and see that your ERP implementation is a success.
Credit: MIS Notes_MGU