Summary Session 9-10

Implementation Strategies (Session 9-10)

Preview

In any ERP implementation strategies, we need to identify and plan all the implementation components

ERP Components

-       Hardware

An ERP system will require a powerful set of servers for development, testing, and production environment.

Key Resources

·         Servers: High-end multiprocessor systems, several gigabytes of main memory and several terabytes of secondary storage

·         Clients: People who use ERP systems (ex: end-users, IT support staff)

·         Peripherals: Such as print servers, printers, back-up power supply equipment, and networking hardware

-       Software

A set of operating instructions and logic called programs that control and direct the computer hardware to perform its functions.

Key Components

·         System Software: Operating system platform (ex: Microsoft Windows Server, Linux)

·         Database Management System (DBMS): Such as Oracle, Microsoft SQL

·         Application Software: Such as project management software, development software, remote access software

-       People Resources

·         End-users: Such as employees, clients, vendors, and others who will potentially use the system

·         IT specialist: Such as database administrators, IT operations support, developers, change management, trainers, and others in IT

·         The project manager: Puts together a harmonious team, works with top management in getting support and resource, and deliver the system and its benefit to the end-user

Virtualization

Virtual Machine (VM) server: technique to run multiple and isolated virtual servers on a single physical device, thus optimizing hardware usage. Two common models used for mission critical application are hardware virtualization and paravirtualization.

ERP Vendors and Virtualization

-          Microsoft: The two virtualization choices available are Microsoft virtual server and Microsoft virtual PC

-          Oracle: Same like Microsoft, Oracle VM uses paravirtualization architecture based on the Xen open-source technology that brings with it both Linux and Windows support

-          SAP: Providing tools, code tweaks, and support needed to ensure their SAP virtualization projects go smoothly

Benefits of virtualization

-          Enhanced hardware utilization allowing an organization to consolidate underutilized servers

-          Makes provisioning and deploying more agile

-          Through consolidation, virtualization can lower total cost of operations at the data center by the following:

·         Deferred purchase of new servers

·         Smaller data center footpring

·         Lower maintenance costs

·         Lower power, ventilation, cooling, rack, and cabling requirements

·         Lower disaster recovery costs

·         Reduced server deployment costs

-          Enhances business continuity and availability

Drawbacks of virtualization

-          Tendency to squeeze more performance out of a physical server by creating too many virtual machines leading to significant concerns when the server is operating at peak loads

-          Security problem: If a hacker compromises the security of the hypervisor, he or she might get access to all VM running on the host server

Third Party Products

Add-on software components either make system operate or add missing functionality

-          Integration with ERP

-          Strategic partners: Assist in addressing integration and interface issues with third party products

-          Middleware: Assist with the development of reporting databases that use extract translate and load tools

-          Support: Third party products support

Database Requirement

For an ERP system to perform up to expectations, the update or transactional component and the reporting component must respond in a timely fashion. Large ERP system implementations require robust relational database system (such as Oracle, DB2, Sybase, Microsoft SQL).

Selecting a relational database:

-          Availability of software applications

-          Availability of skilled, trained technical staff

-          Overall functionality of the database itself

Staffing and database administration: including the use of full time staff and consultants

ERP Approaches – Governance

Governance should outline and define committees and workgroups that are responsible for the different components of the implementation, their interaction and decision making.

Components:

-          Technical development

-          Hardware and software installation

-          Functional components

-          Communications and reporting

-          Change management

-          Project management

-          Project owners and sponsors

-          Budget management

-          Issue escalation process

Roles and Responsibilities

-          Owners (consisting of Senior Management): Determine overall policy, budget, and scope of the project

-          Project Executive: Oversees project activities, provides broad project oversight, resolves policy level issues, and ensures that the project stays within scope

-          Steering Committee: Oversee the project’s efforts and ensure appropriate leadership

-          Application Steward: Works with the other business owners to develop an overall business direction of the system, developing consensus, and resolving functional issues raised to the steering committee

-          Chairperson: Oversee the activities of the steering committee, ensuring that the committee functions in accordance with the overall project oversight. This includes budget, resources, deliverables, risk, and expectations management

-          Project Management Office (consist of the project executive, business and technical project manager, and the implementation partner.): Manage the day-to-day aspects of the project

-          Project Teams: Provide direction and ERP application knowledge with respect to business process design, configuration, conversion, testing, training, reporting, and implementation.

The following teams will exist:

·         Cross-functional component team

·         Functional component teams

·         Technical Infrastructure team

·         Development team

·         Change management team

·         Conversion team

·         Reporting team

-         Project Team Leads: Provide leadership and overall direction for the implementation, ensuring the quality of deliverables and adherence to the project plan and milestones. In addition, inform the project managers of any and all issues that are identified by their respective project team

-         Cross Functional Team: The integration team will consist of the module or project team leads from the business modules and the development leads. This group will meet as needed to discuss and resolve cross-module issues

Sample Set of Meetings

-         Project Sponsors Meeting

-         Steering Committee Meeting

-          Project Management Office Meeting

-         Module or Project Leads Meeting

-         Module or Project Team Status Meeting

-         Issues Meeting

-         Cross-Functional Module Meeting

-         Database Planning Meeting

Implementation Methodology

When a system implementation does not have a well-defined methodology, deadlines will likely be missed, budgets overspent, and the functionality may not meet the client’s requirements. ERP system implementations are very risky, but a well-defined project methodology will assist in managing those risks. The selected methodology should be able to address all components for the entire project including project start-up through system stabilization

Implementation Strategy

1.      Vanilla Implementation

When a company chooses not to modify or customize the system, but instead to change business practices to fit the system.

Reason to consider vanilla implementation.

-          Businesses with relatively straightforward business practices that are not unique

-          Businesses that are not skilled or experienced at building or changing systems

-          For a company using a purchased ERP system where the financial component is critical for reporting

-          All of a company’s branches are running the same system in a single instance, and entering and retrieving data in a similar fashion

-          For a competitive advantage, it is important to know the ability of what and where things are around the world with the business.

2       Modifying an ERP

Businesses that have highly skilled IT developers and a proven process for managing modifications can choose to change the system to match their processes.

Benefits:

-          A single-system instance is easier to maintain and support.

-          Assessing organizational change along with modifying the system to meet the needs of the business will help to minimize risk.

Drawbacks:

-          If a system is modified, each modification will need to be analyzed in light of the upgrade to see if it needs to be incorporated in the upgrade or removed.

-          An upgrade can sometimes turn into a re-implementation, which requires more resources and time.

Platform Issues

-          Servers: As an infrastructure, it will need to grow as the system grows and expands with enough storage to ensure data is quickly retrievable

-          Network: Businesses need a reliable and secure network

-          Security: Several components must be installed and implemented to ensure that the system is secure from unauthorized access

-          Disaster Recovery and Business Continuity: Planning for a disaster and providing business continuity

Implications for Management

Successfully implemented ERP system, may create opportunities for a business to grow and change for the better. Decisions around the hardware, software, governance, methodology, and level of modifications need to be based on the goals set out for the purchase of the ERP system.

Two initial management decisions

-          Use of an implementation methodology

-          Whether or not to modify the system

Management must decide on whether or not to customize prior to the start of the implementation process and it must be communicated to all on the project.