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Business Process Engineering

 

 
 


UNISOFT has established a detailed project implementation methodology, based on international standards. This comprehensive, full life cycle method covers project management, quality control and project implementation.

Pre-implementation process. During this process, UNISOFT analyses client's needs in order to determine a suitable solution, reflecting the specific business operations and MIS requirements. This phase marks the orientation essentials (requirements, functions, procedures) of the client in order to achieve mutual agreement on an ERP solution that will contribute to the accomplishment of company's long term goals and objectives.
Implementation process. The implementation process includes the following four steps:

  1. Mapping. The mapping stage covers a detailed analysis of customer's requirements and consequently the adaptation of ATLANTIS ERP software to the operations through the configuration process. Based on a detailed checklist following elaborate planning, design, scheduling and implementation, the end result of this stage is the formulation and configuration of company's operational model.
  2. Piloting. The piloting stage essentially tests the predefined model and includes strategic issues such as:
    • Advanced key users training;
    • Generation of internal documentation;
    • Data conversion plan finalization;
    • System application management finalization;
    • Customisations / adaptations completion;
    • External interface specifications & testing completion;
    • Agreement on final business solution;
    • Integration and testing.
  3. Data Migration. This stage covers the data migration to ATLANTIS. Furthermore, the following essential events are conducted:
    • Installation at customer's site;
    • Data conversion and data migration;
    • Final configuration of the Information System;
    • Parallel running of the old and the new system;
    • End users training.
  4. Optimisation. This stage includes optimisation of the system based on the targets set by the company according to the functionality, control, development and completion of the information system.
 
  BEFORE IMPLEMENTATION


ERP system is a very powerful computer tool, and organizations can gain a lot of competitive advantage by implementing an ERP system. Unfortunately, it is observed that many ERP projects have not been effective and hence unable to achieve the results envisaged.
As the cost of an ERP implementation project is very high, it is critical for an organization to make the project a success and start deriving benefits out of it as fast as possible. But what is it that makes an ERP implementation project successful?

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A well-defined project organization structure that details the project planning, execution, and monitoring mechanism;
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An attitude that stresses on business transformation instead of process automation;
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An approach that brings about the proper integration of people, process, and technology through effective management of change.

Companies need a well thought-out, comprehensive process to help plan, guide and control the entire ERP implementation effort.
Before the nitty-gritty of software selection begins, management should know how current strategy, processes and supporting systems work and if any changes should be done before the new information system is introduced. The pre-implementation stage is the time to reconsider the way you do business, and to make a detailed analysis of the requirements and the expectations of the new information system. Optimisation of business processes rather than technical innovation should stand in the focus of an ERP implementation project.
Start defining software needs by examining current processes that govern your flow of information and material throughout the order-to-delivery process and ultimately the entire supply chain. There is a common tendency to shortcut this very important activity, but you will pay - sometimes dearly - in time and money for avoiding this essential step.
Evaluating and selecting ERP software is a complex task. It should be a fact-based process that brings you to a point where you can make a comfortable, well-informed decision. Some important points to be kept in mind while evaluating an ERP software include:

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Functional fit with the Company's business processes;
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Degree of integration between the various components of the ERP system;
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Flexibility and scalability;
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Complexity, user friendliness;
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Quick implementation;
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Ability to support multi-site planning and control;
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Technology, client/server capabilities, database independence, security;
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Availability of regular upgrades;
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Amount of customisation required;
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Local support infrastructure;
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Total costs, including cost of licenses, training, implementation, maintenance, customisation and hardware requirements.

Successfully implementing ERP the first time requires a structured methodology that is strategy-people-process focused. This is the only way to manage the risk effectively.
Evaluate your business strategy and ERP plan before you commit to software acquisition and installation. Doing it right the first time is the only cost-effective way to do it. The following questions do not cover every possible contingency, but should be helpful to stimulate thought and discussion.

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How do we want to run our business?
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What business problems need to be solved?
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Do we know and understand our priorities?
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Do we fully understand our as-is condition versus our could be/should be processes?
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Have we carefully defined an action plan for pre-implementation preparation activities?
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What tasks will be accomplished and when?
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What are the missing links in our current system and our software of choice?



THE HUMAN FACTOR - PROJECT ORGANIZATION STRUCTURE

Defining a Project Organization Structure (POS) forms the first step in an ERP implementation project. The POS is the human framework within which all project objectives must be achieved. Development of the organization structure takes into account project objectives and deliverables, and also factors related to project control, risk, and quality. An ERP implementation project typically involves top management and representatives from all departments of the organization, software vendors, hardware vendors, and the implementation consultants. This heterogeneous mix of people associated with the project makes the development of correct POS an activity of paramount importance.

The structure consists of various roles that are discussed below:

Project Sponsor: The role of the project sponsor is the most critical within the project organization, and no ERP project should be undertaken without a clear project sponsor. The project sponsor is generally the person who is committed to change and improvement in the functioning of his organization and is convinced that an ERP system implementation is the best and the only way to achieve it. He has the political authority and organizational power to initiate the project and sustain it through to implementation. In most cases, the CEO of the organization is the project sponsor. The responsibilities of the project sponsor include:

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Promoting the benefits of ERP to the organization;
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Smoothing out internal problems;
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Maintaining support for the project at senior level;
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Being ultimately accountable for the project's success or failure.

Steering Committee: The steering committee consists of representatives from each business area significantly affected by the project. Committee members should be those who clearly understand the impact of project-related changes and those with authority over allocation and management of user resources. Project sponsor usually chairs the steering committee. A senior representative from the consulting team is also part of the committee. The steering committee provides direction and decision-making support to the project and meets regularly to serve as a communication link between the project team and senior management of the organization.
Project Manager: The project manager is appointed by the steering committee on the basis of administrative skills and exposure to business functions within the organization. The project manager can be a senior manager in the organization or can also be a senior experienced member of the consulting team. Ideally, for large implementation projects, two project managers - one from the organization and one from the consulting team - are appointed. The principal areas of responsibility for a project manager are:

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Develop/update the project plan;
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Establish realistic schedules that reflect not only the technical ability to deliver, but also the ability of users to participate in the project;
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Establish/enhance reporting mechanisms;
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Ensure that realistic project status reports are produced and distributed on a regular basis;
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Conduct regular status meetings;
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Present regular high-level reports to the steering committee;
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Ensure project objectives and business expectations are met;
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Monitor and control project progress;
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Monitor project risk;
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Maintain continuous communication with the project teams;
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Determine skill requirements and identify required resources;
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Monitor and manage user (customer) expectations;
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Delegate responsibilities to team leaders, as appropriate;
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Manage project staff;
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Manage relationships with ERP software vendor, computer hardware vendor, and other external vendors of resources.



Functional Team: The functional team is the most important component of the POS and forms the interface between the ERP system and end-users during project stage. It has representation from every function within the organization, viz. inventory, purchase, planning, production, finance, costing, taxation, marketing and sales, maintenance, HR, EDP etc. These team members are selected by the steering committee based on their exposure to respective business areas and their ability to manage change in operational procedures. Collectively they are responsible for:

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Conducting a detailed requirement analysis. A Definition of Requirements Report should be made based on this analysis. The content of this report forms the basis on which the ERP system will be modelled;
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Development of prototype ERP model of the organization. They should assure themselves of the effectiveness of the new business procedures which get framed during the course of prototyping;
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Develop a Requirements Mapping Report (RMR), which compares in detail the procedures that are followed in the old system and those to be used in the ERP environment. Elimination of old processes, which are of no use in the changed setup, is appropriately justified in the RMR;
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Functionalities that are not supported by the ERP system are also mentioned in the RMR along with their relative importance (e.g. essential, desired, nice-to-have etc.). The steering committee discusses these functionalities in detail and decides if additional programs have to be developed to accommodate them;
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Design of user-defined reports and screens;
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Conduct a parallel run in which the new ERP system is operated along with the old system;
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Customizing user documentation;
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Training and education to end-users;
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Post-implementation support to end-users.

Implementation Consultants: Using their knowledge of process integration and experience in applying proven techniques, the implementation consultants simplify and expedite the implementation process. In addition to assisting the functional team the implementation consultants are also involved in:

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Training the project team members in the ERP system;
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Providing a fresh, unbiased perspective on the way of doing business, sometimes even challenging the status quo;
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Conducting an extensive post-implementation audit. (All the procedures that have undergone changes after ERP implementation are documented in detail along with their impact on the overall functioning of the business in this report. The report is discussed in the steering committee meeting along with the project leader's comment and the committee members' individual observations, before the final sign-off of the project.);
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Conducting a post-implementation review after the system is fully implemented and the entire staff is familiar with the system. (It provides a formal review point to measure the success of the project and the system against the original objectives and identifies ways in which further benefit can be gained by better use of the system or by further development work.);
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Along with functional consultants, the team also consists of one or two IT specialists who assist the client IS team in issues such as system administration, security, network management etc.

Information Services (IS) Team: The IS team consists of the members from the EDP department of the organization. The team has a good mix of expertise in operating systems, networking, and database administration. The IT specialist, from the consulting team, is responsible for training members of the IS team in technical aspects of ERP systems (i.e. operating environments, database administration, and security etc.) along with a functional overview of the ERP system. The IS team is involved in every activity of the project, viz. requirements study, selection, installation of hardware and software, prototyping, data migration, parallel run, and the cut-off to live.
The role of the IS team is of particular importance in the data migration activity when data from the old systems has to be loaded on to the new system with suitable modifications. In case new functionalities have to be developed, the IS team is responsible for providing the technical specifications to the programmers. Also, the IS team is responsible for incorporating vendor-supplied updates in the ERP software after the completion of the project.
Hardware Vendor: The hardware vendor is responsible for installing all the computer hardware and related peripherals like printers and networking equipment. The hardware vendor is also responsible for maintenance of the computer systems throughout the course of the project and beyond.
Software Vendor Team: Members from the software vendor organization are responsible for installing the ERP software. Also, the software vendor should provide the organization with regular updates to the software for bug fixation or feature enhancements.

The project organization structure discussed above is a generic structure for most ERP implementation projects. The structure may change, depending on organization size and scope of the project. Also, project organization is dynamic, and it is observed that, as a project progresses, the project organization generally evolve.
To conclude, ERP implementation project should not be viewed as simple process automation but as an exercise in business transformation that calls for integration of people, process, and technology. It is a people-driven activity and its success is very much dependent on the effective organization of the human resources associated with it. Therefore, a good project organization structure is a key enabler for effective implementation.

 
  DURING IMPLEMENTATION


One of the main ERP systems characteristics unlike the rest package applications on the market, are the possibilities to adapt to client's needs and requirements. This hard task can be accomplished only by following a strict and consistent scheme of steps in order to be able to comply absolutely to the processes peculiarities and the organization structure of the client. These steps include installation, data migration, customisations (if necessary), users training and final testing of the system.
Software professionals and consultants, together with client's representatives accomplish all these activities, which obligatory take part in the ERP implementation process.
The implementation process can be described in the following order:

I. ANALYSIS

Analysis of the client's requirements and needs and a plan for the system's adaptation in order to meet these requirements should be accomplished during this stage. The objective is to achieve mutual agreement on an ERP solution that will contribute to the accomplishment of company's long-term goals. A detailed description of all existing business functions and processes in the organization should be made, including all current document types and information and material flows.
At this stage should be discussed some possible activity reorganization plan (if there is a necessity of reorganization). As a result a management model of the organization should be created that would be used as bases for the customisation of the ERP system.

II. PILOTING

In this stage a prototype of the system is created, testing real data and documents, which includes strategic issues such as:

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Advanced key users training;
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Generation of internal documentation;
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Data conversion plan finalization;
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System application management finalization;
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Customisations / adaptations completion;
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External interface specifications & testing completion;
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Agreement on final business solution;
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Integration and testing.

III. DATA MIGRATION

This stage covers the data migration to ATLANTIS. Furthermore, the following essential events are conducted:

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Installation at customer's site;
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Data conversion and data migration;
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Final configuration of the Information System;
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Parallel running of the old and the new system;
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End users training;

 
  AFTER IMPLEMENTATION


After the finalization of the ERP implementation project the system is ready for exploitation. However, there are some activities related to the after implementation stage including:

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Maintenance and support of the ERP system - the team implementing the system is obliged to maintain and support the system for a limited period of time after the implementation. This service is free of charge. After this period is over it depends to the client whether or not he would like to prolong the support service, charged a certain percent of the total software price.
This service includes free upgrades of the system and activities correcting problems as a result of user's mistakes.
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System bugs elimination - elimination of bugs related to system's logic.
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System actualisation and optimisation as a result of changes in the organization of the company - In case of a change in the organization of the company, related to the functions built in the ERP system, an information system actualisation should be done, in order the new system to be able to reflect the new conditions and relations in the organization. This stage includes optimisation of the system, based on the targets set by the company according to the functionality, control, development and completion of the information system.
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New functionality - As most companies evaluate and get larger and most powerful, the ERP system should also acquire new functionalities (new modules should be implemented) to answer the greater demands of competition.

 
  RISKS OF IMPLEMENTATION


When ERP implementations fail to deliver, it's usually because management hasn't taken the time to structure the organization to take advantage of these systems.
Companies have spent fortunes on ERP software and implementation only to find that business performance has not improved at all. These large investments and negative ROIs have created a whirlpool of controversy, rampant company politics and even a number of lawsuits. The trade press has reported many negative ERP stories, and even annual reports have pointed the finger at ERP for lower-than-expected earnings. For some, this has created a higher level of fear about making a big ERP mistake.
Much of the time, ERP software vendors are the targets for blame when anticipated results do not materialize. Are the ERP vendors that sold the software the real culprits for the lack of business performance improvement? The answer is, not very often. Certainly, it can often be argued that ERP system logic is sometimes illogical, functionality is missing and functions perform poorly and so on. But accountability for ERP software selection and implementation usually lies to varying degrees with internal personnel and often with external consultants.
Selecting and implementing a new ERP system, and the process changes that go with it, is unquestionably a complex undertaking. Regardless of your size and perceived resources, an ERP implementation is not something that should be approached without a great deal of careful planning. Among companies that have been through a less-than-fully successful ERP implementation, several reasons for poor results show up consistently:

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Operating strategy did not drive business process design and deployment.
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The implementation took much longer than expected.
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Pre-implementation preparation activities were done poorly, if at all.
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People were not well prepared to accept and operate with the new sys-tem.
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The cost to implement was much greater than anticipated.

In order to avoid such mistakes the management should be aware of the importance of pre-implementation planning and analysis, including a detailed description and optimisation of business processes, as well as the requirements towards the new information system.
If you use ERP to improve the ways your people take orders, manufacture goods, ship them and bill for them, you will see value from the software. If you simply install the software without changing the ways people do their jobs, you may not see any value at all - indeed, the new software could slow you down by simply replacing the old software that everyone knew with new software that no one does.
A very important and at risky factor in an ERP implementation project is the human framework within which all project objectives must be achieved. It includes the Project Organization Structure as well as all the employees that should operate with the new information system. Development of the organization structure takes into account project objectives and deliverables, and also factors related to project control, risk, and quality.
Change can split an organization when executive management supports a particular plan and the IT department does not-or vice versa. But even if both sides agree on a change, the organization may still face resistance from users. When users don't want ERP, even if the organization is ready to choose an ERP vendor and the technical part of the implementation succeeds, the project will fail. If the organization is currently completely paper-dependent, some users believe the automatic software system will make their positions obsolete. Users must understand that ERP will be a positive addition to the organization. If users are "not on board" with ERP then the money and time spent on an implementation is virtually worthless.

A successful change management program should include the following:

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Education about the software.
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Process and system training.
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Communication about the implementation

There are some basic tenets of ERP that should guide management's actions and decisions.

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There is no magic in ERP software. ERP's benefits are a direct result of effective preparation and implementation, and appropriate use.
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No amount of advanced information technology can offset the problem of a flawed business strategy and poorly performing business processes.
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Define a business strategy that will give you a competitive advantage or, at the very least, make you competitively equal. Then, analyse your current business processes and develop your objectives. Once this step is done, the following steps for preparation, ERP software selection and implementation can support your strategic and process objectives better.
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Acquire flexible ERP information technology that can accommodate rapidly changing business conditions. The high-velocity flow of information needed to support action up and down the supply chain is a major step forward for most manufacturers. It will be mandatory in the future just to compete, much less stay ahead of the competition.
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Have the implementation led by a senior executive who has the authority to make changes happen and happen quickly. Make sure there is a sense of urgency and true accountability for completing preparation and implementation activities on time.

Moving away from functional silos and creating effective cross-functional processes that are truly integrated via an ERP system is not an easy task. When ERP is not fully integrated into day-to-day business operations, however, it is not likely to be very beneficial.

 
 
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