Module II

ERP Implementation Life Cycle; Stages of ERP

Implementation; ERP Project Management; ERP
Security; ERP Training; Change Management;
Application Support. Success or failure of ERP.
 Stages of ERP Implementation
The ERP Implementation Life Cycle consists of several key stages,
each critical for the successful deployment of an ERP system.
1. Pre-Evaluation and Planning
2. Requirements Definition and Analysis
3. Design and Development
4. Installation and Configuration
5. Data Migration
6. Testing and Quality Assurance
7. Training and Education
8. Go-Live and Deployment
9. Post-Implementation and Maintenance
10. Review and Evaluation
1. Pre-Evaluation and Planning
2. Project Planning
3. This initial phase involves a comprehensive assessment of the business’s current
processes and requirements. The goal is to clearly define the project’s scope and
objectives, which includes determining which business functions the ERP system
will cover and setting clear, measurable goals. A detailed plan includes estimating
the necessary resources, establishing a timeline, and creating a budget. It’s
essential to map out how things are currently done to ensure that the new ERP
system aligns with the existing business workflows or improves upon them.
4. Vendor Selection
 Selecting the right ERP software and vendor is a pivotal part of this phase. The
selection process should consider several factors, including the business’s specific
needs, the software’s scalability, and the vendor’s reputation and support
capabilities. This stage often involves creating a request for proposal (RFP),
evaluating multiple vendors, and conducting demonstrations. The decision-making
process should include input from key stakeholders across the organization to
ensure the chosen solution aligns with business requirements and strategic goals.
[Link] Definition and Analysis in ERP Implementation
Requirement gathering is the process of identifying the specific
functionalities and features that the ERP system must support. This
involves consultations with key stakeholders, including department
heads, end-users, and IT staff, to capture their needs and expectations.
The goal is to ensure that all necessary requirements are documented,
which helps prevent misunderstandings and ensures that the ERP
system will support all critical business processes. A comprehensive
requirement gathering ensures that the chosen ERP system can handle
tasks such as financial reporting, order processing, and customer
relationship management effectively.
ERP vendor collaborates with ABC Manufacturing to design a system
tailored to their needs. This includes custom reports for production
forecasting and a dashboard for real-time inventory levels. The system
design also incorporates specific workflows for quality control and
supplier management.
3. Design and Development Phase of ERP Implementation
The Design and Development phase is crucial in an ERP implementation as it
transforms the project’s conceptual elements into a practical system.
1. System Design
In the System Design stage, a detailed blueprint of the ERP system architecture is
created. This blueprint includes designing the system’s workflows, data models, and
user interfaces. It involves mapping out how different modules will interact, how
data will flow across the system, and the layout of the user interfaces to ensure
user-friendliness. For instance, in a manufacturing ERP system, this would involve
designing modules for inventory management, production scheduling, and quality
control, ensuring they are integrated and functional.
2. Customization
Customization involves modifying the ERP software to align with the specific needs
and processes of the organization. While ERP systems come with built-in modules,
they often require adjustments to fit unique business requirements. Customization
can range from simple interface to complex code modifications. For example, a
retail company may need to customize its ERP system to handle unique pricing
models or integrate with an existing point-of-sale system. Customization ensures
that the ERP system supports business-specific processes and workflows.
3. Design and Development Phase of ERP Implementation cont.
Challenges and Considerations:
Balancing Customization and Standardization: Excessive customization
can complicate maintenance and upgrades, so it’s essential to balance
custom needs with standard features.
Testing and Validation: Both the design and customized elements must
undergo rigorous testing to ensure they meet business requirements
and function correctly within the system.
The goal of this phase is to ensure that the ERP system, once
implemented, will provide the necessary functionality and support for
the organization’s operations, tailored to its specific needs
These steps set the foundation for the subsequent phases of ERP
implementation, including testing, training, and deployment. By
thoroughly planning and executing the design and customization,
organizations can mitigate risks and improve the chances of a
successful ERP rollout.
[Link] and Configuration in ERP Implementation
System Installation
System Installation involves setting up the necessary hardware and software
infrastructure for the ERP system. This phase includes installing the ERP
software on servers, configuring network settings, and ensuring all required
hardware components are in place and compatible with the software. The
choice between on-premises and cloud-based ERP systems plays a critical
role here, as on-premises systems require physical installation in the
company’s data center, while cloud-based systems involve setting up a
subscription service accessible online .
Configuration
Configuration involves adjusting the ERP system settings to tailor the
software to the specific business processes and requirements of the
organization. This step includes setting up security protocols, defining user
roles and permissions, configuring system workflows, and integrating any
necessary third-party applications. Proper configuration ensures that the
system aligns with the company’s operational needs, enhances data
security, and supports compliance with industry regulations .
5. Data Migration: ERP Implementation Stage
Data Conversion and Cleaning
The data migration process involves critical steps to ensure that the data transferred
from legacy systems to the new ERP system is accurate, complete, and ready for use.
This stage, known as Data Conversion and Cleaning, consists of:
1. Data Extraction: Collecting data from the current systems.
2. Data Cleansing: Identifying and correcting inaccuracies or inconsistencies in the
data. This includes removing duplicates, obsolete records, and ensuring that data is up-
to-date and relevant. Data cleaning also involves standardizing data formats to match
the requirements of the new ERP system .
After cleaning and converting the data, the next phase involves:
1. Data Transformation: Modifying the data to fit the format and structure required by
the new ERP system. This might involve changes such as reformatting dates, merging
fields, or altering the data structure to align with the new system’s database schema
2. Data Loading: Transferring the cleaned and transformed data into the new ERP
system. This step must be carefully managed to prevent data loss and ensure that all
necessary data is accurately imported into the new system
[Link] and Quality Assurance in ERP Implementation
System Testing: This phase involves rigorous testing of the ERP system to ensure all functionalities are working
as expected. It includes different types of testing:
1. Unit Testing: Verifies that individual components of the system function correctly. This is the first level of
testing and focuses on the smallest parts of the system.
2. Integration Testing: Ensures that different modules and components of the ERP system work together
seamlessly. This step is critical because ERP systems often integrate various business processes, and any
issues can disrupt operations.
3. User Acceptance Testing (UAT): Conducted by end-users to verify the system meets their needs and
requirements. It is crucial for validating that the system is ready for deployment and aligns with user
expectations.
[Link] Assurance (QA): QA is an ongoing process that ensures the ERP system meets the defined quality
standards. Key aspects include:
Compliance with Standards and Regulations: Ensuring the system adheres to industry and legal standards is
vital to avoid penalties and ensure smooth operations.
Continuous Improvement: QA processes facilitate continuous monitoring and improvement of the system,
addressing any issues promptly to maintain system integrity and performance.
Risk Mitigation: QA helps in identifying and mitigating potential risks associated with the ERP system, such as
data inaccuracies or system downtimes, which can have significant business implications.
These testing and QA practices help in delivering a reliable and efficient ERP system that meets business needs
and enhances operational efficiency.
[Link] and Education in ERP Implementation
End-User Training
End-user training is crucial for the successful implementation of an ERP system. It involves educating
employees on how to effectively use the new software. This training should be role-specific, tailored
to the different tasks that users across various departments will perform using the ERP system. For
instance, front-line employees need to be trained on specific operational tasks, while managers may
need training on overseeing and approving these tasks.
The training should be delivered just before the system goes live to ensure that the information is
fresh and actionable. A mix of classroom training, e-learning, and hands-on practice sessions is often
used. Additionally, appointing "super users" who are well-trained and can assist other employees is a
common practice to enhance the training effectiveness
Support and Help Desk
Post-implementation support is vital to address any issues users may encounter while adapting to the
new ERP system. This support can include a dedicated help desk, online resources, and ongoing
training sessions. The help desk serves as the first point of contact for troubleshooting and guidance,
ensuring that users can resolve issues quickly and continue their work without significant disruptions.
The establishment of a robust support system, including a help desk and ongoing training, ensures
that the ERP system's benefits are fully realized and helps in maintaining high productivity levels
during the transition phase. This support is not just for resolving technical issues but also for
reinforcing the training, helping users fully grasp the system's functionalities
[Link]-Live and Deployment
Go-Live Preparation
This phase includes meticulous planning and final checks. Key activities involve:
1. Cutover Plan Development: A detailed plan is created to outline the transition process, including data migration,
system integration, and user training. This plan specifies the timeline, resources, and tasks necessary for the go-live day.
2. Dry Runs and Testing: Organizations conduct dry runs or mock go-lives to simulate the actual deployment. This helps
identify potential issues and allows teams to refine their processes. Testing ensures that all system components work as
expected under realistic conditions
3. Final Data Migration: The last batch of data is migrated from the old system to the new ERP system. This step includes
ensuring data accuracy and integrity, and it often involves reconciling data to verify that the migration was successful
4. Go-Live Readiness Review: A comprehensive review is conducted to confirm that all components, including hardware,
software, and network infrastructure, are ready. This involves a checklist to verify that all pre-go-live tasks are completed
and that all stakeholders are informed
Deployment
Deployment marks the actual go-live date when the new ERP system becomes the primary system used by the
organization:
1. System Cutover: This is the moment when the new system takes over from the old one. It involves finalizing data entry,
transitioning business processes, and activating all necessary system components
2. User Support and Monitoring: During and immediately after go-live, extensive support is provided to end-users to
address any issues they encounter. A dedicated support team is usually on standby to assist with troubleshooting and to
ensure a smooth transition. Monitoring tools are used to track system performance and user activity to quickly resolve
any issues that arise
3. Post-Go-Live Stabilization: After the system is live, there is a stabilization period where the focus is on resolving any
issues that were not identified during testing. This period ensures that the system operates as intended and that any
disruptions to business processes are minimized
9. Post-Implementation and Maintenance in ERP Implementation

Post-Go-Live Support
Once an ERP system is live, it enters a critical phase where immediate support is essential to ensure a
smooth transition and address any issues. The focus during this period is on stabilizing the system and
helping users adjust. This support phase typically includes resolving technical issues, providing
additional training, and addressing any initial challenges or questions users might have.
Maintenance and Upgrades
After the initial stabilization, the ERP system requires ongoing maintenance to ensure it continues to
meet the organization’s needs. This involves:
System Updates: Regular updates and patches to keep the software current and secure. This can
include bug fixes, new features, and compliance updates.
Data Management: Continuous monitoring and management of data integrity, ensuring that data is
accurate and consistent.
Performance Optimization: Tweaking the system to improve performance, especially as the number of
users and the volume of data grow.
User Training and Support: Providing ongoing training sessions and support to help users maximize the
system’s potential and adapt to new features
Continuous Improvement
The ERP system must evolve along with the business. This involves a governance structure to manage
change requests, prioritize new features, and ensure the system remains aligned with business goals.
Regular reviews and user feedback help identify areas for improvement, ensuring that the ERP system
continues to deliver value over time.
10. Review and Evaluation:
- Performance Evaluation: Assessing the ERP system’s
performance and its impact on business processes.
 - Continuous Improvement: Implementing feedback and
enhancing the system to better meet business needs.
Eg. Six months after implementation, ABC Manufacturing
reviews the ERP system’s impact. They find that production
efficiency has improved by 20%, inventory levels are more
accurate, and customer order fulfilment times have decreased.
The company continues to refine the system based on user
feedback and business needs.
Case study:Amazon's Operations: A Detailed
Comparison Before and After ERP Implementation
Before ERP Implementation
Operational Fragmentation and Data Silos
Amazon, like many rapidly growing businesses, initially relied on disparate systems for
managing various operational functions such as inventory, sales, and financials. This lack
of integration led to significant challenges, particularly in terms of data consistency and
communication across departments. Each department maintained its own set of data,
creating silos that hindered the flow of information. For example, inventory data might not
be immediately updated in the sales system, leading to inaccurate stock levels being
displayed on the website.
Manual Processes and Inefficiencies
 Without a unified system, many processes were handled manually. This included
updating product listings, managing inventory, processing orders, and generating
financial reports. The reliance on manual processes increased the likelihood of errors,
such as incorrect inventory counts or delayed order processing. These errors could lead
to stockouts or overselling, impacting customer satisfaction and potentially leading to
lost sales
Case study:Amazon’s Operations
Challenges in Scaling Operations
As Amazon rapidly expanded, the limitations of its fragmented systems became more
apparent. The lack of real-time data and integrated workflows made it difficult to scale
operations efficiently. For instance, preparing for peak shopping seasons required
significant manual effort to ensure that inventory levels were accurate and that the
website could handle increased traffic. The scalability issues also extended to financial
management, where consolidating data for reporting was time-consuming and prone to
discrepancies.
After ERP Implementation
Unified and Integrated System
 In 2008, Amazon implemented SAP’s ERP system, which revolutionized its operational
efficiency. The ERP system provided a unified platform that integrated various business
functions, including sales, inventory management, customer service, and financials. This
integration ensured that data entered into the system became immediately available
across all relevant departments. For example, when an order was placed, the inventory
was updated in real-time, and financial records were automatically adjusted
Case study:Amazon's Operations cont.
Automation and Process Streamlining
The ERP system automated many previously manual processes. This included automated
inventory tracking, order processing, and financial accounting. Automation not only
reduced the possibility of human error but also significantly sped up operations. For
instance, order processing times were reduced because the system could automatically
check inventory levels, process payments, and initiate shipping. This speed and
accuracy were crucial for maintaining customer satisfaction, especially during high-
volume periods like holidays
Enhanced Data Management and Decision-Making
 With an integrated ERP system, Amazon had access to real-time data and
comprehensive analytics. This improved data visibility allowed for better decision-
making. For example, the company could analyze purchasing patterns to forecast
demand more accurately and optimize inventory levels, reducing both overstock and
stockouts. Additionally, the ERP system’s reporting capabilities provided insights into
financial performance and operational efficiency, enabling Amazon to quickly identify
and address any issues
Case study : Amazon's Operations cont.
Scalability and Flexibility
The ERP system’s scalability was a significant advantage for Amazon. As the
company continued to grow, the ERP system could easily accommodate increased
data volumes and transactions. Moreover, the flexibility of the ERP allowed Amazon
to integrate additional modules or third-party applications as needed, supporting new
business models or market expansions. This adaptability was critical for Amazon’s
diversification into areas such as cloud computing (Amazon Web Services) and
entertainment (Amazon Prime Video) .
Example of Impact:
 A notable example of the ERP system’s impact is seen during Amazon’s major
shopping events like Prime Day. The ERP system supports the seamless handling of
millions of transactions, ensuring that inventory levels are accurately reflected in
real-time and that customers receive their orders promptly. The system also
supports dynamic pricing and personalized marketing, enhancing the customer
experience and maximizing sales.
 ERP Security Issues
 Enterprise Resource Planning (ERP) systems integrate various business
processes and functions into a single unified system, allowing for more
efficient operations and data flow.
 However, managing the security of ERP systems is a critical task due to
the sensitive nature of the data they handle.
 Ensuring that an ERP system is secure throughout its lifecycle, from
implementation to ongoing operations, is vital to protect against
unauthorized access, data breaches, and other security threats.
 This involves addressing multiple types of security issues, each requiring
careful consideration and management
Types of ERP Security Issues
[Link] Security
Network security is crucial to protect the communication channels used by the
ERP system. This involves:

Firewall Management: A firewall acts as a barrier between a trusted internal

network and untrusted external networks. In the context of ERP systems, only
selected customers, suppliers, and partners should be allowed to access the
internal network through the firewall. Access should be limited to specific data
relevant to their roles and permissions.

Protection Against Hackers: Implementing strong encryption methods, secure

communication protocols, and intrusion detection systems are necessary to
prevent unauthorized access and hacking attempts. Regular monitoring and
updates to security protocols help safeguard against new vulnerabilities.
Types of ERP Security Issues.
 2. System Access Security - Role & Authorization
 System access security ensures that only authorized individuals have access to
specific parts of the ERP system based on their roles and responsibilities. Key aspects
include:
 Role-Based Access Control (RBAC): This security mechanism restricts system access
based on the user's role within the organization. For example, employees in the
finance department may have access to financial data, while those in the HR
department have access to employee records.
 Authorization and Authentication: Before accessing the system, users must
authenticate their identity, typically through usernames and passwords, biometric
data, or multi-factor authentication. Authorization ensures that users can only access
the data and functionalities they are permitted to.
 Segregation of Duties (SoD): This principle ensures that critical tasks are divided
among multiple people to prevent fraud or error. For instance, the person who creates
a purchase order should not be allowed to approve payments for that order, reducing
the risk of fraudulent activities.
Types of ERP Security Issues
 [Link] Security
 Data security is about protecting sensitive company data, especially
during the implementation and operation of the ERP system. It involves:
 Data Confidentiality: Ensuring that sensitive data, such as financial
information, personal data, or intellectual property, is only accessible to
authorized individuals. For example, in industries like banking, defense, or
credit card companies, protecting data from unauthorized access is
paramount.
 Data Integrity: Maintaining the accuracy and consistency of data
throughout its lifecycle. This includes implementing controls to prevent
unauthorized data modification.
 Data Privacy: Ensuring that personal data is collected, processed, and
stored in compliance with relevant data protection laws and regulations,
such as the GDPR or CCPA.
System-Based Security - Authorizations

In ERP systems, authorizations control what actions users

can perform and what data they can access. Depending on
the organization's needs and the complexity of processes,
ERP systems support two primary authorization strategies:

1. Activity-Based Authorization
2. Role-Based Authorization
1. Activity-Based Authorization
Activity-Based Authorization focuses on granting permissions based on specific activities or tasks.
This method involves defining what activities are necessary for a particular process and then
assigning users the permissions needed to complete those activities.

Steps for Activity-Based Authorization:

1. Identify Activities:
- Determine the specific actions or activities involved in a particular business process. For
instance, in the "Leave Approval Process," the activities could include viewing leave balances and
approving leave requests.
2. Prepare a Set of Transaction Codes:
Each activity is associated with specific transaction codes that the system uses to execute these
actions. For example, there might be a transaction code for viewing leave balances and another for
executing and approving leave requests.

3. Prepare Authorization Roles:

An authorization role is created for each set of transaction codes that correspond to the activities.
For instance, a role might be defined to allow access to both view leave balances and approve
leave requests.
4. Assign the User Specific Roles:
- Finally, users are assigned the appropriate roles based on their job functions and
responsibilities.
Example:
Leave Approval Process:
Identify Activities:
(i) View Leave Balances
(ii) Execute and Approve Workflow for Leave Request
Prepare Set of Transaction Codes:
(i) View Leave Balances - XX
(ii) Execute and Approve Workflow - YY
Prepare Authorization Role:
Role: `Z_HR_APPROVE_LEAVES` includes permissions for codes XX and YY.
2. Role-Based Authorization

Role-Based Authorization focuses on defining permissions based on roles

within the organization rather than individual activities. This strategy
groups together a set of permissions that correspond to a specific job role
or function, such as "Procurement Role" or "HR Manager."

Steps for Role-Based Authorization:

1. Identify Transaction Codes for Each Role:
- Determine the set of transaction codes that correspond to the actions
needed for a particular role in the organization.

2. Prepare Authorization Role:

- Create an authorization role that includes all the necessary transaction
codes for the identified role.
3. Assign Role to Users:
- Assign users to roles based on their job functions and responsibilities.
Example:
Procurement Role:
Identify Transaction Codes: Identify codes required for tasks
like creating purchase orders, managing suppliers, and
approving purchases.
Prepare Authorization Role: Create a role, such as
`PROCUREMENT_ROLE`, that encompasses all the necessary
permissions.
Assign Role to Users: Users in the procurement department
are assigned the `PROCUREMENT_ROLE.
 Advantages and Disadvantages of Role-Based Authorization

Advantages:
 Specificity: Roles are tailored to specific functions, making it easier to assign
and manage permissions.
 Ease of Modification: If a job function changes, updating the role to reflect
new responsibilities is straightforward, affecting all users assigned to that
role.
Disadvantages:
 Standardization Requirement: The method requires careful standardization of
roles and responsibilities across the organization. Inconsistencies or poorly
defined roles can lead to security vulnerabilities or access issues.
 Complexity in Large Organizations: Managing a large number of roles and
keeping them updated with changing business processes can be challenging.
Data Security and Technology for Managing
Data:
Data security in ERP systems is dominant , especially when dealing with
sensitive or confidential information. One of the key technologies used
to protect data is Data Masking, which helps safeguard information by
making it inaccessible or unreadable to unauthorized users, especially
in non-production environments like development, testing, or training.
What is Data Masking?
Data masking is the process of obscuring specific data within a
database to ensure that sensitive information is not exposed to
unauthorized personnel. The original data is transformed in such a way
that it remains usable for tasks such as software testing and user
training but is not readable or traceable to the original source. This
technique is crucial for protecting privacy and complying with data
protection regulations.
 Benefits of Data Masking
1. Regulatory Compliance:
- Many industries are governed by strict regulations concerning data privacy, such as GDPR
(General Data Protection Regulation), HIPAA (Health Insurance Portability and Accountability Act), and
PCI DSS (Payment Card Industry Data Security Standard). Data masking helps organizations comply
with these regulations by preventing the exposure of sensitive data in environments where it is not
strictly necessary.
2. Enhanced Security in Outsourcing:
- When companies outsource certain functions, such as application development or testing, data
masking ensures that external developers and testers cannot access real sensitive data. This is
crucial for protecting customer information, trade secrets, and other confidential data from potential
misuse or breaches.

3. Risk of Data Breaches:

- By masking data, organizations can significantly reduce the risk of data breaches. Even if masked
data is exposed, it does not contain real sensitive information, thereby minimizing potential damage.
4. Maintaining Data Utility:
- Masked data retains the necessary format and structure required for testing and training, allowing
for realistic scenarios without the risk of exposing actual data. This helps in performing accurate and
meaningful tests without compromising data security.
 Data Masking Techniques
Various techniques can be employed to mask data, each with different approaches to
ensure data security:
1. Shuffling/Reorder:
Shuffling involves randomly rearranging the data entries within a column. For example,
if you have a column of customer names, you can shuffle the names so that the original
order is lost. This technique preserves the data set's statistical properties while obscuring
the relationship between individual records and their original data.
[Link] Value Replacement:
This method replaces the original data with randomly generated values that are
consistent in format with the original data. For example, in a column containing Social
Security Numbers (SSNs), each SSN can be replaced with a randomly generated number
that follows the SSN format.
3. Hashing:
Hashing converts original data into a hashed value using a hashing algorithm. The
resulting hash is a fixed-length string of characters, typically indecipherable. Hashing is
commonly used for masking passwords and other sensitive information. It is a one-way
process, meaning the original data cannot be retrieved from the hash.
4. Date Aging:
Date Aging involves shifting dates by a consistent or random amount. For instance, all dates in a dataset
might be moved forward by a random number of days or months. This technique maintains the
chronological relationships within the data but obscures the exact dates.

5. Numeric Alteration :
In this technique, numerical values are altered by adding or subtracting a random amount. For example, if
you have a column with salaries, each salary can be increased or decreased by a random percentage or a
fixed amount. This keeps the general distribution of the data intact while ensuring that the exact numbers
are not exposed.

6. Custom Masking:
Custom masking techniques are tailored to specific needs and requirements of an organization. This can
involve combining multiple masking methods or creating unique algorithms to protect data while
maintaining its utility for specific tasks. For example, a custom method might mask parts of a credit card
number while keeping the last four digits visible.

7. Substitution with a Random Value:

Substitution replaces original data with random but realistic-looking values. For instance, actual names can
be replaced with names from a list of random names. This method is particularly useful for anonymizing
personal information in datasets used for training or demonstration.
 Implementing Data Masking
Implementing data masking involves several steps:
1. Identify Sensitive Data:
- The first step is to identify which data elements are sensitive and require masking. This could
include personal data (names, addresses etc), financial data (bank accounts, credit card numbers),
and proprietary business information.
2. Choose Appropriate Masking Techniques:
- Depending on the type of data and the use case, select appropriate masking techniques. For
example, numeric data might be best masked with numeric alteration, while personal identifiers might
use hashing or random substitution.

3. Apply Masking Techniques:

- Implement the chosen masking techniques in the relevant environments (development, testing,
training). This can involve using specialized software tools designed for data masking or custom
scripts developed in-house.
4. Testing and Validation:
- After masking, it’s important to validate that the data still meets the needs of testing or training
environments. The data should be functional for testing purposes but should not reveal sensitive
information.
5. Monitoring and Updating:
- As business processes and data regulations evolve, organizations should regularly review and
update their data masking strategies to ensure ongoing compliance and security.
 Change Management
Change management in ERP (Enterprise Resource
Planning) refers to the structured approach to transitioning
individuals, teams, and organizations from their current
state to a desired future state when implementing or
upgrading an ERP system.
ERP implementations often bring significant changes to
how an organization operates, and change management is
crucial to ensure the smooth adoption of the new system,
minimize resistance, and maximize the benefits of the ERP.
1. Understanding the Need for Change
 Assessment of Current State: Before implementing an ERP system, it’s
essential to understand the existing processes, systems, and culture within
the organization. This involves identifying pain points, inefficiencies, and
areas where the ERP will bring improvements.
 Defining the Future State: Clearly articulate what the organization will
look like after the ERP implementation. This includes the new processes,
roles, and responsibilities that will be in place.
2. Stakeholder Engagement
 Identifying Stakeholders: Determine who will be affected by the ERP
implementation—this includes employees at all levels, from top
management to end-users.
 Communication Plan: Develop a communication strategy to keep
stakeholders informed throughout the ERP project. Effective communication
helps in managing expectations and reducing resistance.
3. Training and Education
 Training Programs: As the ERP system will introduce new processes and
tools, comprehensive training programs are necessary to equip employees
with the skills needed to use the new system effectively.
 Continuous Support: After the initial training, ongoing support should be
provided to help users adapt to the system and address any challenges they
encounter.
4. Managing Resistance
 Identifying Resistance Points: Resistance is natural during ERP
implementations, as it involves significant changes. Identifying the sources
of resistance early helps in addressing them proactively.
 Engagement Strategies: Involve employees in the change process by
seeking their input, addressing their concerns, and demonstrating the
benefits of the new system.
5. Monitoring and Feedback
 Progress Tracking: Regularly monitor the implementation process to
ensure that it is on track and that the desired changes are being realized.
 Feedback Loops: Establish mechanisms for employees to provide
feedback on the ERP system. This feedback can be used to make
adjustments and improvements to the system and the change
management process.
6. Sustaining the Change
 Reinforcement: After the ERP system is implemented, it’s important to
reinforce the changes through continued support, additional training, and
recognition of those who embrace the new system.
 Cultural Integration: The changes brought about by the ERP should be
integrated into the organizational culture, making the new ways of working
the norm.
7. Leadership Involvement
Top-Down Support: Successful ERP implementations require
strong support from leadership. Leaders should champion the
change, model the desired behaviors, and provide the resources
needed for a successful transition.
8. Risk Management
Identifying Risks: During the change management process,
identify potential risks that could hinder the ERP implementation,
such as employee turnover, inadequate training, or technical
issues.
Mitigation Strategies: Develop strategies to mitigate these
risks, ensuring that they do not derail the project.
 ERP Training:

Effective ERP training is crucial for ensuring successful

implementation and adoption of enterprise resource
planning systems within an organization.
1. Tailoring the Training Program to Job Roles
2. Documenting Training Materials
3. In-Person Support
4. Monitoring the Effectiveness of Training
5. Certification
6. Soliciting Feedback from Learners
 1. Tailoring the Training Program to Job Roles
 Customization According to Roles:
ERP training must be tailored to the specific roles within an organization. This means
developing customized training content that addresses the unique requirements and
responsibilities of each job role. For instance, a procurement specialist would focus on
modules related to purchasing, inventory management, and supplier relations, while a
finance manager would concentrate on financial reporting, budgeting, and compliance.
 Identifying Skill Gaps:
Before developing role-specific training materials, it’s important to identify the skill
gaps of the employees. This involves conducting a skills assessment to determine the
difference between the current capabilities of employees and the skills required for
their roles. Methods include surveys, interviews, and reviewing performance data to
pinpoint areas that need improvement
 Role-Based Training Modules:
Once the skill gaps are identified, the next step is to create role-based training
modules. These modules should cover specific tasks and responsibilities relevant to
each role. For example, sales personnel may receive training on customer relationship
management (CRM) functionalities, while HR staff focus on modules related to
employee data management and payroll systems .
 [Link] Training Materials

Importance of Documentation:
Documenting all training materials ensures that employees have
continuous access to essential information. This includes user
manuals, process guides, and FAQs. Comprehensive documentation
helps users troubleshoot issues and reinforces their training, serving
as a reference long after the initial training sessions are completed
Creating Effective Documentation:
Effective documentation should be clear, concise, and easy to
navigate. It should cover step-by-step instructions for common tasks,
explanations of ERP functionalities, and solutions to frequently
encountered issues. This helps in reducing the dependency on
support staff and encourages self-sufficiency among users.
 [Link]-Person Support

On-the-Job Support:
In-person support, such as having dedicated ERP specialists or super
users available, plays a critical role in the effective adoption of ERP
systems. These specialists can provide hands-on assistance, answer
specific questions, and resolve issues in real time. This support is
especially valuable during the initial rollout phase when users are still
getting accustomed to the new system

On-going Support and Reinforcement:

Beyond initial training, on-going support ensures that users continue to
develop their skills and effectively use the system. This can include
regular check-ins, additional training sessions, and updates on new
features or best practices.
 [Link] the Effectiveness of Training

Assessment and Feedback Mechanisms:

Monitoring the effectiveness of the ERP training program is vital for
continuous improvement. This involves assessing whether the
training objectives are being met and if the users are able to perform
their job functions more efficiently. Methods for monitoring
effectiveness include quizzes, surveys, and performance metrics such
as error rates and task completion times
Identifying Training Gaps:
By analysing the feedback and performance data, organizations can
identify gaps in knowledge and areas where additional training is
needed. This allows for adjustments to the training program to
address these gaps and ensure that the learning objectives are fully
achieved
 [Link]

Value of Certification:
Certifying employees on the ERP system can significantly enhance their
confidence and competence. Certification programs, often offered by ERP
vendors like SAP, validate the users understanding and proficiency in
using the system. Certified employees are generally more capable of
utilizing the system to its full potential, thereby increasing overall
productivity and reducing the likelihood of project failures .
Certification Process:
The certification process typically involves passing a series of exams that
test the users knowledge of the ERP system. This can be a powerful
motivator for employees, encouraging them to fully engage with the
training material and achieve a recognized standard of proficiency.
6. Soliciting Feedback from Learners
Continuous Improvement through Feedback:
Collecting feedback from employees who have undergone the training
is essential for refining the training program. Feedback can highlight
aspects of the training that were particularly helpful or areas that need
improvement. This process ensures that the training remains relevant,
effective, and aligned with the evolving needs of the organization
Implementing Feedback:
Organizations should actively implement the feedback received to
improve the training content, delivery methods, and support
mechanisms. This not only enhances the training program but also
demonstrates a commitment to continuous learning and development.
Application Support
1. User Support
2. Functional Support
3. Technical Support
4. Patch Management and Upgrades
5. Testing and Validation
6. Reporting and Data Support
7. Security and Authorization Support
8. Knowledge and Management Training
9. Service Level Agreements and KPIs
 ERP success & failure
What does successful ERP provide?
Client Satisfaction
Overall Solution Fit
Training that results in knowledgeable users
The client wants to experience the benefits of the solution
Emergent and contractual issues are adequately resolved
Return on Investment
Workflow analysis and job combinations
Improved manufacturing efficiency/reduced cycle time
Reductions in inventory / waste
1. Improved delivery
ERP success
1)Client Satisfaction
 Client satisfaction is at the heart of any successful business, and ERP plays a
crucial role in achieving this. By integrating all business processes, ERP ensures
that customer orders are processed efficiently, inquiries are handled promptly,
and issues are resolved quickly.
2)Overall Solution Fit
 An ERP system is designed to fit the unique needs of an organization. This ‘fit’
means that the ERP system aligns with the company’s processes, goals, and
industry requirements.
3) Training That Results in Knowledgeable Users
 Training is a critical component of ERP implementation. No matter how advanced
the software is, its effectiveness depends on how well users understand and
utilize it. ERP training ensures that employees are not only familiar with the new
system but can also leverage its full capabilities to perform their jobs more
efficiently.
ERP success cont.
4. The Client Wants to Experience the Benefits of the Solution
 “Implementing ERP is a significant investment, and clients expect to see
tangible benefits from it. These benefits might include faster processing
times, reduced costs, and improved decision-making capabilities.
5. Emergent and Contractual Issues Are Adequately Resolved
 “During and after the implementation of an ERP system, issues may arise—
whether they are technical glitches or contractual disagreements. Effective
ERP systems include mechanisms for addressing these issues promptly.
6. Return on Investment (ROI)
 “One of the primary goals of implementing an ERP system is to achieve a
high return on investment (ROI). This means that the benefits of the system
—such as cost savings, increased productivity, and enhanced customer
satisfaction—outweigh the costs of implementation and maintenance.
 ERP success cont.
7. Workflow Analysis and Job Combinations
 “ERP systems help organizations analyse and optimize their workflows. This might involve
combining similar tasks or roles to improve efficiency.
8. Improved Manufacturing Efficiency/Reduced Cycle Time
 “For manufacturing companies, ERP systems are invaluable in improving efficiency and reducing
cycle time—the time it takes to produce a product from start to finish. ERP provides tools for better
production planning, inventory management, and quality control. For instance, by providing real-
time data on inventory levels and production schedules, ERP helps manufacturers avoid delays
and minimize downtime.”
9. Reductions in Inventory/Waste
 “ERP systems also contribute to lean manufacturing practices by helping companies reduce
excess inventory and minimize waste. With accurate forecasting and real-time tracking, ERP
ensures that companies maintain optimal inventory levels, reducing the cost of holding inventory
and preventing overproduction. This leads to a more sustainable and cost-effective operation.”
10. Improved Delivery
 “Finally, ERP systems enhance delivery processes by ensuring that products are delivered on time
and to the correct specifications. By integrating logistics, inventory, and order management, ERP
systems streamline the entire delivery process, from order placement to final delivery.
 Why does ERP fail?
 Varying severity of failures Be Wary Of:
 Non-business critical failures
Taking too big a bite all at
 Business critical failures
once
 The Vendor
Large project teams
 Poor or non-existent analysis prior to
quoting Incoming data inaccuracy
 Improperly configured software (GIGO)
 Insufficient or poor training
 Insufficient knowledge of applicable
business core competencies
 Lack of industry specific knowledge
 Doesn’t understand his product
 Insufficient resources
Non-Business Critical Failures
These failures, while problematic, don’t typically threaten
the overall viability of the organization but can cause
delays, frustration, and inefficiencies.

Business-Critical Failures
These failures can have a significant impact on the
business, potentially leading to financial losses, operational
disruptions, or even the collapse of the project.
 The Vendor
Poor or Non-Existent Analysis Prior to Quoting: Sometimes, vendors provide
quotes without fully understanding the specific needs of the business. This
can result in a mismatch between the ERP system’s capabilities and the
company’s requirements, leading to costly modifications or, in some cases,
project abandonment.
 Improperly Configured Software: If the software is not properly configured
to meet the unique needs of the business, it can cause disruptions in
workflow, data processing errors, and user dissatisfaction. Configuration
issues can stem from poor initial setup, lack of customization, or a failure to
understand the organization’s processes.
 Insufficient or Poor Training- Even the best ERP systems can fail if users are
not adequately trained. Insufficient training leads to improper use of the
system, which can cause operational issues, data inaccuracies, and
decreased productivity. Without proper training, employees may resist using
the new system, leading to project failure.
2. Lack of Industry-Specific Knowledge
Each industry has its unique requirements and processes. If the ERP system or
implementation team lacks industry-specific knowledge, the system may not
address critical industry needs, leading to poor performance and failure to
meet business objectives.
3. Doesn’t Understand His Product
This refers to situations where the vendor or implementation partner does not
have a thorough understanding of the ERP product. Without this
understanding, they may not be able to configure the system correctly or
provide the necessary support, leading to project delays and failures.
4. Insufficient Resources
ERP implementations require significant resources, including time, money, and
skilled personnel. If a project is under-resourced, it can lead to rushed
implementations, incomplete features, and ultimately, failure.
The Client
Top Management commitment
Inadequate staff participation levels
Fail to push the internal support processes
Can result in startup delays
Project Management
Make sure the intent is well understood
Unwillingness to repair broken processes
Lack of published plans and timelines
Unveiling
Lack of an internal change management process
Failure to formally document business processes
Post Project Management
1. Difficulty in gaining compliance to procedures
 Top Management Commitment
The success of an ERP project heavily relies on the commitment of the top
management. If the leadership is not fully engaged or fails to support the project:
Lack of Strategic Direction: Without top management’s involvement, the project
may lack clear strategic direction and alignment with business goals.
Resource Allocation: Top management commitment is crucial for ensuring
adequate resources (time, budget, and personnel) are allocated to the project.
Decision-Making: High-level decisions, such as changes in business processes or
the approval of necessary expenditures, require the backing of top management.
 Inadequate Staff Participation Levels
Engagement Issues: If staff participation levels are low, the implementation team
may not have the necessary insights into how the system needs to be configured
to meet the actual needs of the business.
Resistance to Change: Employees who are not involved may resist using the new
system, leading to poor adoption rates and potentially causing the project to fail.
 Failure to Push Internal Support Processes
Support Process Importance: Internal support processes, such as help desks and user
training programs, are critical during and after ERP implementation. If these are not
prioritized, users may struggle to adapt to the new system.
Result in Startup Delays: A lack of support can lead to startup delays, where users are
unable to use the system effectively, causing disruptions in business operations.
 Project Management
Effective project management is essential for ERP success. However, several issues can
arise if this area is not handled properly:
Intent Understanding: It’s crucial that everyone involved understands the intent of the
project. Miscommunication or unclear objectives can lead to misalignment and project
delays.
Unwillingness to Repair Broken Processes: If the company is unwilling to fix existing
broken processes before implementing ERP, the system may simply automate
ineffective processes, leading to continued inefficiencies.
Lack of Published Plans and Timelines: Without clear plans and timelines, the project
can quickly go off track. Proper scheduling and planning help manage expectations and
ensure the project stays on course.
Unveiling
The way the ERP system is unveiled to the organization can
significantly impact its adoption:
Lack of Internal Change Management Process: Change
management is crucial for preparing employees for the new system.
Without it, there may be significant resistance, confusion, and errors
as the system is rolled out.
Failure to Formally Document Business Processes:
Documenting business processes before ERP implementation ensures
that the system is configured to support those processes effectively.
Without formal documentation, critical steps may be overlooked,
leading to gaps in functionality.
Post Project Management
After the ERP system is implemented, the work isn’t done. Post-
project management is crucial for ensuring long-term success.
The Key Elements of Successful ERP
1)Proper Analysis
Identify and document the strengths and weaknesses of the business
Process benchmarking
Now we know what we need to do
2)Attention to the Business Process
Document the issues
Map the processes
Plan for the exceptions
Document the designed processes for training/compliance
3)A Strong, Visible Project Team
Sufficient empowerment
Must not work in a vacuum
Publish plans, timelines and celebrate victories
Top Things to Consider
It all starts at the top
Carefully choose a vendor
Get a proper needs analysis
Map the process to fill the needs
Document the process to facilitate compliance
Data accuracy is the key
Things will change
Don’t skimp on the budget, but insist on a fixed price contract
The key is communications
Good software is merely one component of successful ERP
1. It All Starts at the Top
Leadership Commitment: The success of an ERP project begins with strong
commitment from top management. Leadership needs to be fully invested,
providing clear direction, allocating sufficient resources, and driving the project
forward. Without top management’s buy-in, the project may lack focus and fail to
achieve its objectives.
2. Carefully Choose a Vendor
Vendor Selection : Selecting the right vendor is crucial. The vendor should have a
proven track record in your industry, offer robust support, and provide a solution
that aligns with your business needs. It’s important to evaluate their experience,
the flexibility of their solution, and their ability to provide on going support.
3. Get a Proper Needs Analysis
Needs Assessment : Conducting a thorough needs analysis helps you understand
what your organization requires from an ERP system. This involves evaluating
current processes, identifying pain points, and determining what features and
functionalities are necessary to improve operations. A clear understanding of your
needs ensures that you choose a solution that fits.
 4. Map the Process to Fill the Needs
Process Mapping : Once the needs are identified, map out your business processes to see
how the ERP system can address them. This involves understanding the flow of information,
the roles involved, and where the ERP can streamline or automate processes. Proper process
mapping ensures the system will effectively support business operations.
5. Document the Process to Facilitate Compliance
Process Documentation: Documenting business processes is essential for ensuring that the
ERP system is configured correctly and that employees understand how to use it. Detailed
documentation also facilitates compliance with internal and external regulations and helps in
training users.
6. Data Accuracy is the Key
Data Integrity: Accurate data is the backbone of any ERP system. If the data entered into the
system is inaccurate, the outputs will also be flawed. Before implementation, ensure that
data is cleaned, validated, and organized. This step is crucial for avoiding errors and making
informed business decisions.
7. Things Will Change
Change Management: ERP implementation will bring changes to how things are done in the
organization. Effective change management is necessary to prepare employees, address
resistance, and ensure a smooth transition. Communication, training, and support are key
elements in managing change.
8. Don’t Skimp on the Budget, but Insist on a Fixed Price Contract
 Budget Considerations: While it’s important not to cut corners on the budget,
especially for critical aspects like customization, training, and support, it’s also
wise to negotiate a fixed-price contract with the vendor. This helps avoid
unexpected costs and ensures that the project stays within budget.
9. The Key is Communication
 Effective Communication: Clear and consistent communication throughout the
project is vital. This includes communication between the project team,
management, the vendor, and end-users. Keeping everyone informed about
the project’s progress, challenges, and changes helps to ensure alignment and
mitigate risks.
10. Good Software is Merely One Component of Successful ERP
 Holistic Approach:While choosing good software is important, it’s only one part
of a successful ERP implementation. The success also depends on how well the
software is integrated into your business processes, how well the users are
trained, and how effectively the project is managed from start to finish