Making ERP Implementation Effective

Updated: Jan 25 2003, 05:30am hrs
Globalisation has caught up with the world in its true sense. This has put immense competitive pressures on organisations striving to excel in a global market place. This becomes especially profound due to the continuously changing market situations. This has forced todays companies to constantly reassess their corporate strategy, business processes, the organisation and technology, especially with the aim to increase productivity and flexibility. In such a scenario speed of response to the internal and external forces of an organisations operating environment has become critical to success in business. Many think information technology has become an enabler as well as the answer to such a situation. But when we look at the real picture this also makes strict demands on the information infrastructure, which must be flexible enough to follow the organisations dyn-amics. In addition, modern inf-ormation technology also offers important possibilities to support new and fundamentally different types of organisations.

While enterprise resource planning (ERP) has become one of the concepts to catch the fancy of organisations the world over, there are significant aspects that need to be considered while implementing an ERP package. The ERP solution should have all the ingredients required to address the above-mentioned situations. This calls the need for a model that best addresses such a situation during an ERP implementation. The ERP implementation model should be based on three key underlying objectives. They are speed, flexibility and integration. Speed is an important criterion of ERP implementation. This would mean a short and compact implementation cycle, minimising the implementation effort through the use of modern tools. Whereas flexibility would inculcate an optimisation phase after the initial implementation where the ERP configuration smoothly follows organisational changes without the need for a time-co nsuming and costly effort. Both speed and flexibility in the implementation would be only possible with the use of integration tools that automate the configuration activities.

ERP Implementation
The underlying concept of ERP implementation is based on the definition of line-of-business specific business models which are not rigid, but have the ability to be adaptable to specific requirements and future changes. The ERP implementation should support pre-sales, by offering, presenting and evaluating line of business specific business models which closely relate to the customer organisations environment. It should also act as a support for the implementation and optimisation stages, by offering methods and tools for customising the generic business model to the specific needs of the organisation by generating the configuration and user interface. It should al-so shorten the implementation cycle, based on the generic business model and the discussion can focus on specific issues of the organisation. This helps prevent re-inventing the wheel and can contribute to shortening the implementation cycle.

It should also support a Business Process Re-engine-ering cycle, with the provision of a best-practice knowledge base for a line of business. This supports the dialog between an organisations top-management and business consultants. The knowledge base will for instance point at new opportunities offered by information technology as enabler for other process structures and other organisational consequences.

Following such a model for ERP implementation may se-em quite exhaustive but it should not mean that a customer must go through this time consuming and costly process from scratch. To enable smooth functioning of the implementation procedures the vendor should be able to provide a ready Line-of-Busi-ness (LOB) specific Enterprise models that are designed and geared towards specific LOB strategic issues. Within the fra-mework of the implementation model that is discussed here the implementation is realised via the subsequent evaluation of the pre-defined LOB models referred to as reference models. During this evaluation process, the project teams should work directly towards the target of generating an appropriate wor-kflow process/user-interface (process oriented) and define parameter settings of the ERP solution which effectively supports the business processes.

Best Practices
The idea behind this kind of a model is that best-practice visions and experiences from the industry are captured in the pre-defined Line-of-business specific solutions. This will serve as a catalyst in the creative and innovative process of BPR. The rationale is that by the use of dedicated reference models per line-of-business, the effort and time needed for this evaluation process is reduced significantly. Therefo-re, companies will not hesitate to reassess their ERP impleme-ntation, just when the business requires this. This eliminates the necessity of a costly and time-consuming re-implementation. Besides it also provides the flexibility and speed companies are looking for in order to follow the business dynamics with the IT infrastructure.

Such a model also encompasses within it three key models that help speed up ERP implementations. They are the business function models, business process model and business organisation model. The business function model is a functional decomposition of a company up to the level of the main-functions. This provides the basis of a structured implementation process that includ-es the Best-practices LOB knowledge, guide to support the dialogue between management and consultants during visioning workshops and impl-ementation scope definition and main-process selection and configuration of the components. Whereas the business process model defines how the process control cycle is realised by defining activities that should be executed in the workflow. With this one can understand the process definitions as they describe how the business functions are realised. It also helps in generating the end-user environment. Besides the same processes can be planned, executed and monitored in the ERP Workflow Management module.

Coming to the business organisation model, this describes the structure of the organisation in terms of division, business units and departments. A key concept in this is the identification of roles in the company. A role defines which activities/tasks in the process execution are usually assigned to one person or group. Besides this, the hierarchical and functional relationships can be described between the departments using the business organisation model.

Such a model may form the basis to a successful ERP impl-ementation strategy. The prime factor that facilitates ease of implementation is the use of established best practices modules in the implementation pr-ocedure. Such model crushes the implementation cycle time for SMEs. It is also extremely useful for large multi-site organisations who can develop a corporate kernel model and use them for rolling out to all the locations.

(The writer is director, sales and marketing, BaaN India)