ERP Implementation
Introduction
ePathfinders Research Hyderabad, India 500075
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ePathfinders is a research Organization aimed at ERP research. With a team comprising of professionals engaged with various ERP applications for over 10 years and experience spreading across conceptualizing, designing, developing, implementing, upgrading and supporting various ERP products, ePathfinders shares knowledge on various aspects of ERP world. We share information about ERP lifecycle covering various aspects that help ERP professionals and user community for making critical ERP decisions and supporting the ERP applications in use. We keep sharing our experiences with you all regularly through our web blog, e-books and articles published with other research companies. If you need any specific help for Selecting ERP product for your organization Managing your ERP implementation/upgrade projects Setting up and managing of a production support assignment Learning ERP products Please feel free to write to us at
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Introduction
ERP applications are becoming increasingly complex. With an aim to cover all aspects of an enterprise, ERP Vendors are looking at finding solutions for highly niche areas in enterprise management or acquiring products to find solutions. Integration of additional features to improve enterprise management is also fuelling the complexity. From basic document publication solutions to tracking inventory movements using RFID all types of features are getting embedded into ERP applications. Implementing an ERP product involves huge financial outflow and effort because of the impact it can have across the Organization. Industry specific and region specific requirements together with basic business functions add to the complexity of implementation. Business process changes, increased transparency in executing various business functions and strict time monitoring of execution of tasks bring in major change in the way employees operate. Often IT professionals confront situations of managing ERP projects either from the implementation part team or from the Organization’s IT team that is implementing ERP product. This document is aimed at providing a high level introduction to a typical ERP implementation project covering various phases, deliverables of each of the phase and issues to watch. This may help as a basic guideline to start understanding your role as a project manager on either side for an ERP implementation project.
Phases of Implementation
Various ERP products use different methodologies which are more of variants of a basic model. The implementation methodology explained below is a basic model. This covers each of the phases relevant for ERP implementation. If you are implementing a specific ERP product such as SAP or Oracle eBiz, please align this with the prescribed application implementation methodology used for the application.
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Project Initiation
During this phase all important structures for the implementation will be built. The strength of these foundations will determine the success of the implementation. A few of the foundations to be created during this phase includes Team Building – Very critical activity before starting of an implementation project. This involves different levels of team building. If you are managing the implementation team of a consulting partner then you need to build your team first because people join your project from different teams and you may not have emotional relationships built with all the team members. If you are managing the IT team of the Organization in which ERP Implementation project will kick off then, ensure that your IT team works like a team. You also need to take up team building activity involving your IT team and key users identified by the business. If you are managing the overall program, ensure that all the teams involved in the implementation including the team from the implementation partner, IT team to be involved in the implementation project and the key users from the business. Communication Protocols – Second critical activity for the success of implementation project is setting up communication protocols. During this phase try to identify the influential members in each of the teams involved in the implementation – partner team, IT team and key users team who can exert influence on other members of their teams because of their knowledge, capability or nearness to the top management and channel the formal and information communications from those members. Project Charter – As a project manager it is important for you to publish the rules of the project and publish a list of key stakeholders and key members of the project. Create and publish a project charter covering the roles and responsibilities of all stakeholders and members of the project, communication and reporting structures, activity out of scope, high level timelines and major risks with mitigation plans. This activity is critical for the project manager who is in‐charge of the whole project delivery. This may be from the implementation partner team or from the implementing Organization team. Recasting the Project Plan – Being the project manager, you should take a re‐look at the project plan you have inherited. The first project plan normally created during the evaluation phase and may form part of the pre‐sales cycle when you are choosing the implementation partner. This plan will not be accurate because good amount of facts will not be clear during evaluation/pre‐sales phase and so it has to be reviewed and updated before starting the project. Hardware and Software Requirements ‐ Since the project plan gets updated, the project impact will be much clearer at this phase and hence hardware and software requirements arise during the project implementation should be planned and published at this level. This helps the stakeholders to plan their capital outflows appropriately.
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Instance Planning ‐ Number of instances of the application required during the implementation cycle should be planned at this level. During the initial phases of an implementation project, the Customers will be very watchful and try to understand the capabilities and responsibility levels of the implementation team members. The implementation team from the partner should try to establish their credentials quickly, build strong relationships with the project team members including the key users which will pave way to the success of the project. Main Activities during the Project Initiation Making of Project Charter and Reviewing and updating the Project Plan Building strong implementation team involving all members of the implementation project Defining and establishing the project infrastructure such as hardware and software Planning and establishing the application environments to be used by the project teams Main Deliverables during this Phases Project Charter covering the team structure, responsibility charters and communication protocols Project Plan duly updated considering the new conditions and risks Infrastructure requirements document Application Environments Key Challenges Establishing a communication protocol that is acceptable for all stakeholders in the project – user community, IT team members and implementation team.
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Planning and establishing application instances to be used by different project team members. Striking consensus here is a bit challenging considering the balancing to be dong between budget availability and team requirements.
Business Process Analysis
Business Process Analysis is the first critical phase of the implementation project. During this phase the implementation team will document the current business process which is very critical to map the business process with the ERP delivered processes. This phase often overlaps with the Project Initiation phase because when the stakeholders are busy establishing the infrastructure etc. the users and the implementation team members will work on documenting the business processes.
Current business processes
It is important to bring up all possible scenarios for discussion during this phase and find required answers relating to all questions the implementation team bring up for each of the business process. Any error in documenting a specific process may lead to huge rework during later phases which can be very expensive from the project perspective. While recording the current business process, it is important to document the business process flows covering all possible scenarios. Appropriate examples to describe each of the scenarios will help improving the fitment with the delivered business process. In addition to building a strong foundation for the project by establishing all requirements in detail, this phase also is very critical from the perspective of establishing the relationship between the implementation and user teams. The amount of business knowledge and flexibility to understand industry specific practices displayed by the implementation team is a key factor for success during this phase.
Main Activities during the Business Process Analysis Phase Making the implementation and business user teams working together Studying each of the business process and documenting the critical flows Making business process diagrams with appropriate examples Main Deliverables during this Phase Business Process Diagrams Current Business Practices or As‐Is process document
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Key Challenges Making the teams to think through all possible scenarios Building the business process diagrams covering all possibilities and exceptions Makin the business and implementations strike a balance to build a strong relationship which will be critical during next phases of implementation project
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Solution Design
During solution design phase, the implementation team together with the user team will establish the required business processes to be configured in the ERP product. These processes might be existing business processes or changed business processes defined after a brainstorm between the implementation and user teams considering the features offered by the ERP product. During this phase all those features not covered by the delivered features of the ERP product will be identified and documented. Solution for all the requirements that can be configured within the ERP product will be created and workarounds of customizations for all those requirements which are identified as gaps considering the delivered features of the ERP product. Interface designs, security architecture and initial configuration of the application will be planned and documented.
To Be Business Processes
During an ERP implementation, implementing organizations always attempt to utilize the best practices to streamline the existing business process. This exercise will lead to a new business process from existing process which will lead to the final solution design for the organization. Though the attempt is not to lead towards a complete re‐engineering of the business process, certain amount of process corrections and streamlining the processes will be attempted.
Final Solution Design
During this phase a complete solution of the finalized business processes the implementing organization attempts to create for running their business operations will be created. The solution maps will drive the configuration of the initial set up data and conversion of data for reaching a desired state of the system. While making the solution maps from business processes mapped into the ERP application, the implementation team should attempt to find a near complete solution fitment within the application for all business processes. All the scenarios for which a direct solution is not available within the ERP application should be recorded as gaps before attempting the workarounds. If workaround solutions are attempted at the time of initial solution mapping the completeness of solution will suffer.
Conference Room Pilot
During this activity, all the agreed business processes and their respective mapping into the ERP applications will be discussed in detail by the implementation and the user’s teams. The implementation team will present each of the business process maps in the ERP application and bring up the clear gaps of the business requirements discussed and agreed upon. The implementation team can bring up the alternate/workaround solutions for discussion during this phase.
Conversion Plan
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While designing the solutions, data from existing application should be planned.
Main Activities during the Solution Design phase Defining the future business process or To Be scenarios for the business Creation of detailed design books covering mapping of existing business processes with the delivered business processes of ERP product Writing of functional specifications for all the features found to be not mapped with the delivered business processes. Application Configuration for Conference Room Pilot Planning and designing interfaces and reports Designing application and user security matrix Identifying the qualified flows and planning Batch Schedules for auto execution Main Deliverables during this Phase Required or To Be Business Process Document Design Books showing the solution plans and sample configurations Functional Specification Documents for Customizations, Interfaces and Reports Application and User Security Matrix Batch Schedule Plan Key Challenges Key and feasible mapping acceptable to all stakeholders is very critical
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It is important to cover all possible scenarios including exceptions. Any wrong mapping at this level can be found only during the UAT phase which can lead to project delays All business process fitments in the ERP application should be showed to the users and allow them to check and get a signoff at this level Any workaround solutions to be agreed during Conference Room Pilot for finding solution to any to be business process should be documented clearly and signed off to avoid conflicts during later phases
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Development
During the Development phase, most critical activities of the project will take place. Creating configurations to map the fit business processes, development of customizations and interfaces, creation of conversion scripts are the critical activities. During configuration the master configurations should be created to make the organization structure and other set ups. All required data relating to countries, currencies, chart of accounts, budgets, invoice types, voucher types and so on should be created in the configuration instance. A copy of the finally configured instance should be archived before progressing for the next phase.
Data Conversion
During this phase the existing customer’s transaction data will be converted into the ERP application. The best practice for conversion is to convert the opening balances of the year and the open items up to the date of conversion using the data conversion scripts. The data should be provided by the user teams in a required format which can be used as input for the data conversion scripts.
Main Activities during the Development Phase Creation of master and transaction configurations Development of Customizations, Interfaces and Reports Unit testing of all newly developed components Creation of conversion data and conversion scripts Main Deliverables during this Phase Configurations Developed Components/Objects for Customizations, Interfaces and Reports Data Conversion Files Data Conversion Scripts
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Key Challenges While creating Configurations it is important to explore optimum solutions else the solutions will not be convincing for the users. It is important to execute functional unit test carefully to confirm the developed feature is confirming to the functional design. If huge amount of data has to be converted, few important aspects should be considered The users should be aware of the impact of huge amount of data conversion on their involvement for creation of data files and verification of data after conversion If the more than one year finance data as to be converted important risk is to convert one full year data and have the finance books tallying in the financial year to populate the correct opening balances.
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Testing
During the testing phase complete system testing with new customizations, interfaces and reports and User Acceptance Testing will have to be executed.
System and Integration Testing
If your implementation project have good amount of customizations it is important to test entire business flow including the customized piece to ensure that the customization is not impacting the overall business process. Once all customizations tested, then the integrations among different modules and applications should be tested. If the implementation involves any modules that will be used by a huge number of users then load testing should also be performed. If the application should be accessed remotely or though a network then it is important to perform the network testing as well.
User Acceptance Testing
During this phase the finally configured system with converted data should be copied into a new instance to create the Test Environment. The test environment represents the possible live scenario and the testing by users on this instance can bring up the actual issues that need resolution to reach the Go Live phase. The users’ team should provide a list of scenarios they believe to be very critical and complex for their business and the implementation team should bring up the test cases to facilitate the testing of these scenarios. The test cases show a systematic flow showing which screen after which screen to be used, what data to be inserted and what is the expected outcome. This helps the users to navigate through the ERP system for testing the focused scenarios faster and the results will be reliable as well because this can reduce the knowledge issues to a large extent.
Main Activities during the Testing Phase Functional Unit Testing Stress and Network Testing Creation of Test Scripts for User Acceptance Testing Execution of User Acceptance Testing Main Deliverables during this Phase Test Scripts for User Acceptance Testing
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Issue Logs Fixes and Patches for solving the problems found during testing Key Challenges Building extensive scenarios in the Test Scripts for complete testing to establish completeness of testing Participation of users in the User Acceptance Testing is a critical factor
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Production
This is the preparation for Going Live. Production Instance should be created and initial configurations should be created in the system. The configured Production System should be used for configuring the Security as per the agreed Security Matrix. Opening Balances should be populated and the data conversion should be executed.
Main Activities during the Production Phase Creation of Production Instance Execution of Security matrix Final Data conversion Main Deliverables during this Phase Final Production instance with configurations, security and data Key Challenges Security should be planned and executed considering all constraints and compliance requirements such as SOX
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Transition
During this phase the users’ team will be prepared to take over the fully configured ERP system to run for their business. The final configurations created in the production system will be documented for the purpose of user reference. The users will be trained on the application to understand and execute their business transactions comfortably. Training documentation including presentations and user guides will be created for the purpose of current and future users.
Main Activities during the Transition Phase User Training Training Documentation Final configuration documentation for future reference Main Deliverables during this Phase Final production configuration document Training Documentation Key Challenges User Training should cover practical scenarios to make the users understand and follow the training Training documentation should be simple and exhaustive
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