Enterprise Resource Planning (ERP) is an integrated information system to take care of all departments within an enterprise. An ERP system generally includes software for sales, manufacturing, materials management, accounts receivable and payable, general ledger, warehousing, transportation etc. Many ERP systems also offer human resource management module or HRIS. Lot of effort is required for ERP planning and implementation. First step of automating your enterprise is to set up a committee to look into the requirement and feasibility of various ERP systems, which may lead eventually to ERP planning.
The first stage is ERP planning and organizing. Two types of questionnaires may be prepared. One questionnaire shall address the needs of the organization to collect the information “as-is” and the second questionnaire to compare various features required in the new system (ERP). This questionnaire helps you to shortlist an ERP vendor. Then you need to define the scope of your ERP implementation.
Document your existing processes “as-is” and how you would like your processes “would like to-be”. You need not know about any specific ERP. Even before you start ERP planning, this document provides the base for you or your Consultant. The consultant referred here, may not be the ERP implementing consulting company, but a consulting company that may guide you to go for feasibility study as well as recommend an appropriate Enterprise Resource Planning system, that is suitable for your Enterprise.
Next step of ERP planning is to develop evaluation criteria to select the appropriate ERP as well as the vendor. This is significant as all ERPs offer similar feature and you need to really go into various details to identify and decide on a particular Enterprise Resource Planning system. Hence prepare an evaluation criterion and make and Request For Proposal (RFP) for all the potential ERP vendor and business consultants.
Once all the Enterprise Resource Planning vendors offer their technical solutions, you may decide on the best suited, rather than the best ERP for your enterprise. This technical evaluation must satisfy all your needs. Hence, it is important part of ERP planning is to have a clear understanding of your requirement and mapping the ERP vendor’s modules. At this stage you may be short listing two or more ERP solutions. All the ERP vendors shall offer their commercial bids along with technical bid. The commercial bids may be opened only for the bids where they are technically qualified.
As you open the commercial bids of all the technically qualified bids, you will have clear idea of what is going to cost you to implement Enterprise Resource Planning system in your enterprise. During this phase of ERP planning, define project costs and allocate budgets. You need to address all the requirements of the resources.
Even long before you kick start your ERP implementation, your ERP planning shall take care of executive and user buy-in and their support. Many people in an Enterprise fear that Enterprise Resource Planning system is a threat to their existence or apprehend that the system simply will not work as they feel that ‘we know better’. Hence training shall be an integral part of implementation.
Many ERP implementations fail due to lack of implementation strategy and project plan. You need a good project manager who can handle ERP planning and the implementation. He should be able to identify the problems that may arise and must have a solution for the same. He/she should be the able to get all required approvals though ‘Champion’ of ERP implementation of your Enterprise. ERP planning shall address Return on Investments (ROI) and shall have milestones that can measure the implementation status quantitatively as well as qualitatively.