1. ERP Implementation & Maintenance
Joel Freeman IST 402

2. ERP Implementation On average, ERP Implementation…
Takes upward of 2 years to implement
Costs about $15M
Periods of mediocre or even a decline in company performance are common
3 stages of change…
Decline: ERP fine tuned, users re-learn business procedures
Stabilization: Users become proficient with new system
Pay off: Users familiar with system; additional efficiency attained 2

3. ERP Implementation Why is proper implementation necessary? 3 3

4. Critical Success Factors in ERP
1.) Clear understanding of strategic goals
2.) Commitment by top management
Must maintain data accuracy to ensure no confusion or errors with the system goes live.
Allocates funding and provides motivation to project team as well as for end user support
Must understand business processes being worked with and must maintain steady progress.
Company’s technical capabilities and/or restrictions must be dealt with effectively to ensure organizationally-wide compatibility with the system.
Upper management must provide end users the support and motivation to accept and acclimate to the new system.
End users must fully understand how the system works. Without proper training, users are unlikely to accept new system.
Coordinates and monitors project scope and activity in addition to keeping the project on schedule
ERP system should satisfy all performance requirements set forth by management.
Provides scope and requirements for the desired ERP system
System must handle issues concerning multiple company locations and the functions that each respective location is responsible for.
3.) Good project management
4.) Effective implementation team
5.) Successful coping with technical issues
6.) Organizational commitment to change
7.) Extensive end user training
8.) Data accuracy
9.) Focused performance measures
10.) Multi-site issues resolved 4

5. Implementation Strategy Options
Control Strategy
Total local autonomy
Multi-location organizations implement unique instances of ERP independently at each location
Headquarters control – Financial Only
Multi-location organizations allow for customization to business processes at different locations
Headquarters coordination
Customization in several selected business functions
Network coordination
Allows coordination with other business unites without high levels of centralization
Total centralization
Used in tightly coordinated organizations 5

6. Implementation Strategy Options
Software Configuration
Single Financial / Single Operation
Smaller, simple organizations with centralized layout
Single Financial / Multiple Operations
Single organization with a broad geographical layout
Multiple Financial / Single Operation
Single organization with centralized layout and broad financial responsibilities
Multiple Financial / Multiple Operations
Broad geographical layout and financial responsibilities 6

7. Implementation Strategy Options
Technical Platform
Centralized
Remote access through telecommunications and PCs
Distributed
Information is distributed across several locations within the organization
Centralized is usually more cost effective and more easily organized. 7

8. Implementation Strategy Options
Implementation Execution
Big-Bang
ERP system is developed to completion
Old system goes down / new ERP goes live in one shot
Very risky method; if successful, fastest implementation
Phased Rollout
ERP system goes live by releasing modules a few at a time
Much safer approach; takes much longer to implement 8

9. Implementation Strategy Options
Hershey Foods – Big-Bang Implementation
Desired to transfer Legacy systems over before Y2K
Project fell behind schedule, rushed to completion
Launched in July 1999
Inventory began slipping through ‘cracks’ in system
Nearly lost business with many large candy vendors because of error 9

10. Implementation Strategy Options
Commonwealth of PA – Phased rollout Implementation
Began rolling out ‘ImaginePA’ in 2002
Continues to roll out solution
Current applications have been very successful
Pioneer in ERP implementation 10

11. Levels of IT Project Failure
Corresponding Failure
Technical failure; software behaved unexpectedly
Process Failure
IT system is over budget or overscheduled; investment no longer justifiable to organization
Interaction Failure
System doesn’t get used as much as anticipated; lost benefit
Expectation Failure
System functions correctly, but may be lacking some requirements set forth by management or users
Strategic/Competitive Failure
System works entirely as intended, but fails to meet organization’s strategic goals 11

12. ERP Implementation Failure
Technological determinism
IT team takes on too much responsibility for system
User and organizational requirements often not met
Supplier/Consultant-Driven
CIO and IT is neglected in implementation
ERP is outsourced to outside contractors
Often exceeds projected costs
Outdated relationships & capabilities
Organization lacks the resources to successfully implement the system 12

13. Features of Successful ERP Implementation
Key IT Capabilities
IT Leadership
Business systems thinking
Relationship building
Architecture planning
Technology Fixing
Informed buying
Contract Facilitation
Contract Monitoring
Supplier Development 13

14. User Training
Thorough training is often overlooked as a criteria for success
Some common reasons users are inadequately trained…
Software-specific training; little attention placed on business processes
Lack of explanation behind why users complete required tasks in system
Lack of adequate training time
Sticking to the old style rather than converting to the new efficient practices 14

15. Common Maintenance Tasks
ERP Maintenance
Common Maintenance Tasks
Corrective
Application of vendor patches and upgrades
Troubleshooting user complaints
Adaptive
Testing any upgrades
Further enhancements
Perfective
Version upgrades
Preventive
Monitor backups, error logs, response times, etc.
Track flow of maintenance times 15

16. ERP System Migration
Continuous upgrades allow vendors to support only newer versions of ERP systems
Reduces maintenance headaches
Lowers overhead vendor costs
Added functionality
Compliance to new standards
Eliminating user disappointment with system performance 16

17. References 17