Tools for Implementation of ERP
Enterprise Resource Planning (ERP) involves the implementation of an administrative software system that consolidates or replaces standalone applications for facets of business activities and processes organization-wide, such as payroll, purchasing, accounting, human resources and other functions. The primary benefit lies in the total integration of data and business processes to operate off a single application. ERP enables the sharing of information throughout the organization and with external entities. ERP software implementation involves a very complex undertaking and requires careful planning. Effective tools for implementation ERP projects include a Business Case Document, Gap Analysis, Total Cost of Ownership and Training Needs Assessment.
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Business Case Document
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A Business Case Document addresses the business requirements the ERP project must meet prior to implementation. It probes into the logic behind the project, the expected business advantages, such as accountability, efficiency, regulatory compliance or a green environment. In addition, the document includes outlines the reasons for rejecting or moving forward with each option, a GAP analysis, the costs of ERP implementation, funding options for the project and an organization readiness report. A Business Document Case also includes information on the Return on Investment and Cost/Benefit Analysis. Review this tool throughout the project to make sure it stays on track and delivers on the organization's objectives.
GAP Analysis
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A Gap Analysis identifies, evaluates and recommends a series of steps to consider before undertaking an ERP project. GAP Analysis considers the objectives of the ERP system compared to the applications already in place -- "the gap." Start the GAP Analysis by conducting an inventory of the weaknesses and strengths of the existing business systems. Develop an accurate assessment of the current state. This will prove invaluable during the ERP implementation phase. Analyze the current applications and decide what positive aspects the ERP software needs to make to enhance the organization.
This approach guarantees that differences do not exist between the ERP and the organization's business activities. Rate the existing performance and develop benchmarks going forward to measure the success of the ERP project. Define the roles and responsibilities of individuals. This will minimizes disturbances and clarify matters for the various departments. The key focus lies in identifying "gaps" and ensures the appropriate corrections.
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Total Cost of Ownership
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Total Cost of Ownership (TCO) conducts an estimation of all direct and indirect expenses connected with the life cycle of the ERP project. Cost estimates must include acquisition and implementation, operation and maintenance and replacement costs. This tool requires hypothesizing about future requirements and modeling possible different scenarios to obtain various cost estimates. Cost containment represents a critical aspect of ERP implementation. TCO focuses on limiting the number of changes and the degree of modification to the baseline application. This tool forces organizations to consider unplanned, unbudgeted, and emergency costs of implementation and operation. TCO assist companies in understanding and controlling the risks inherent in ERP implementation.
Training Needs Assessment
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Part of the ERP implementation involves training staff on how to use the application. Obtain management sponsorship behind the training. Meet with key contacts to gather any necessary information. Identify clear objectives for the training. Develop an educational profile of the ERP end-users, including their education, skill level and preferred learning style. Identify existing training materials you can employ and the best medium for delivering the training materials. Develop or update the training evaluation system. Summarize your including training priorities, costs and required resources.
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References
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