ERP Implementation

How and why of ERP failure & tips for successful ERP implementation
BY Prof. Jyoti Zaveri Freelance ERP Consultant

J. Zaveri

ERP Implementation Issues and tips

Need for training. Education

Not understanding what the new 'system' is designed to achieve. At least 100 hrs of training is required for key users. Preparing masters / transaction on practice databases to get the comfort level and singing off is highly recommended. The CEO can make this happen, if he / she personally take interest, otherwise if left to users, the quality training does not happen and then chances of success are reduced. In one company, the training was given after the system was live. Users were busy with ISO implementation and most people saw the data entry screen for the first time when the legacy was removed. ERP training is required.
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BPR and ERP

It may be necessary to change your current business process

Do BPR

J. Zaveri

ERP Implementation Issues and tips

Lack of Top Management commitment (management being involved but not dedicated).

If the owner is not spending enough quality time, then the ERP project is likely to be unsuccessful. In one organization, the MD hardly took part in the discussion with ERP vendor and delegated the task to the General Manager, who in turn never wanted the ERP system, so he created all the roadblocks, and the vendor got frustrated and finally left

J. Zaveri

ERP Implementation Issues and tips

SRS
Inadequate SRS or System Requirements Specification: Current processes are not adequately addressed. User must write down the requirements, which means taking out time and extra effort. The user usually explains casually, verbally, and hurriedly, then how the ERP can succeed If sufficient time is not given for preparing the SRS, ERP is likely fail Chopping and changing of program codes after the ERP goes Live is observed, if SRS exercise is not done properly.

J. Zaveri

ERP Implementation Issues and tips

Poor ERP Package Selection

The package does not address the basic business functions of the client The package should be totally integrated, including accounts Some organizations are so comfortable with their cheap account-centric package that they do inventory and other functions in ERP but ask for data transfer from ERP to such accounting package!

J. Zaveri

ERP Implementation Issues and tips

Internal Resistance
Resistance to changing the 'old' processes. This is perhaps human nature Unless proper confidence building is done (during training) the user will still want to use the old method (or the legacy way) One ERP user (in a Mumbai based company) was so adamant that the MD had to ask him to resign (and he was the works manager who was expert in fire fighting, but MD wanted to prevent fire altogether).

J. Zaveri

ERP Implementation Issues and tips

Give me moon

Unrealistic Expectations of the Benefits A user starts expecting moon One must draw a line, be satisfied, at least in the first phase, and let the system take off.
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Return on investment. ROI?

Unrealistic Expectations of the ROI. People forget to quantify the intangible benefit or they simply expect returns overnight Most users do not know even, what the ROI is For example

ROI can be reducing inventory level by x percentage or ROI can be preparing of Excise (TAX) Invoice quickly
and accurately or ROI is to get the correct material requirement planning. JIT.

J. Zaveri

ERP Implementation Issues and tips

Time Frame
Unrealistic Time Frame Expectations. ERP is like changing the wall itself (and not changing merely the paint of the wall) CEO / CFO expect things to happen overnight when they have not taken trouble to define (in writing); to what extent customization will be allowed One has to learn to put a full stop to chopping and changing.

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TCO - Money
Another issues is that the Total Cost of Ownership (TCO) is not understood ERP vendor / implementer money is not paid in time The ERP implementing company is treated like any other supplier and ERP project goes into a kind of negative cycle E.g., Think of a mobile phone:

When the SIM card charge is over it stops

working and needs to be charged by paying additional amount.

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.By-the-way, we will do ERP also.

User / top management safely assume that certain procedure should be present in ERP. If the procedure is not explained in the beginning, legacy is not given which it may not reflect in the Business Blueprint (these reference guidelines) or in the POC If it is not in the Business Blueprint, it will not be there in ERP program TIP: ERP project is taken as by-the-way project; whereas in true sense it should be the only priority during implementation phase.

Do not take ERP casually

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Tight linking (integration) is good

Another example, one user from marketing, did not appreciate the link of quotation and the sales order

He asked implementer to remove the link.

Later, after six months, he realized his mistake and asked to provide for the link

Sometime Director or CEO of the company does not share his or her long-term vision of the company, with the middle management or lower management.

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Follow the checklist given below

What Kind of products?

E.g., Make to stock or make to order.
E.g. Continuous process production or discreet production.

What ERP modules are you looking for?

Write it down from the scope list of ERP modules given by ERP vendor. applications? Within the next 3 years? Which ones? Make list and plan to phase out out-dated software ASAP.

Are you planning on replacing legacy software

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ERP Implementation Issues and tips

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Information Technology and IT infrastructure

What databases and operating systems do we have expertise? What will the IT department agree to and what is the long-term plan? List them If you are not sure, consult I. T. expert. For instance, in one corporate company EDP manager was asked to select ERP. She was trained by Red Hat on Linux. She insisted that ERP should be on Linux platform. During the ERP deployment, seven months down the line, she left the organization for greener pasture. Nobody knew anything about Linux. ERP project was abandoned

One year later the company deployed ERP on Microsoft

platform.

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Learn about Technology

Technology has advanced, therefore the selection team members will need to learn about workflow, TCP/IP, and many other issues involved. ERP coordinator should be trained in the following areas: basics of SQL. ERP can give intelligent alerts automatically by email. This needs understanding of email management settings (e.g., MS Outlook or MS Exchange Server settings). It is expected that ERP coordinator or I. T. support person knows about networking of computers (LAN). If necessary, plan a separate training for the Information Technology and new techniques that are akin with ERP. E.g., UPS can be connected to Server to shut give messages to users that battery backup is low, so users can logout and shutdown properly. E.g., using RFID technology and so forth. Embrace technology with both hands. Do not be afraid of using new technology. May be attending seminars and train people continuously.
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DAILY BACKUP
Make a disaster management plan. Nobody wishes that accident should happen. Nevertheless, it is necessary to have a written document in place. Especially, mention about the backup and restore procedure. Do a rehearsal exercises. For instance, one factory was near river. Floods came. ERP server was on the ground floor and was damaged. Fortunately, backup CD was taken home every day. They could restore the data on another computer and start the work.
Selecting ERP.

Invest lot of time in the ERP selection process. It is not like buying a mobile. If you do not like a cell phone, you can discard, and buy new one. ERP is like a long-term partnership (marriage, shall we say). There are going to be difference of opinion with the spouse. This can be sorted out. Similarly, one cannot keep on changing ERP.
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J. Zaveri

DO YOUR HOME WORK WELL. BY VARIOUS ERP COMPANIES

COMPARE ERP MODULES OFFERED

Do not get carried away by impressive PowerPoint presentations. Marketing people are trained to give Rosy picture. The chief of ERP (main sponsor) should know the limitation of ERP and its customization. ERP implementers cannot deliver Moon. Although sales team will promise Moon (and Jupiter also). .

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ERP is not bed of roses.

Business transformation is a painful process. Do not underestimate. It is like that scene of Jurassic Park II movie. She is amused when she is looking at the Dinosaurs for the first time. She is told that in beginning, it is always wah wah (great) but it ends up in screaming!

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It is said that
ERP implementation is a journey and not the final destination

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Additional resources created and updated by Zaveri to learn ERP: https://www.facebook.com/groups/discuss.erp Join Facebook Group ERP. http://www.facebook.com/dnserp Like Facebook Page ERP. http://dnserp.wordpress.com Subscribe ERP Blog. http://www.twitter.com/followERP Follow on Twitter. http://linkd.in/lFj98r Join ERP, E-business Forum LinkedIn Group.

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Join Prof. Zaveri on Facebook and LinkedIn j.zaveri@dnserp.com

Follow on Twitter Subscribe ERP Blog Subscribe SMM Blog Subscribe video channel Follow presentations

@followERP http://dnserp.wordpress.com http://digital-nervous-system.blogspot.com http://www.youtube.com/dnserp http://www.scribd.com/eLesson

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