ERP: Making It Happen: The Implementers' Guide to Success with Enterprise Resource Planning Chapter 5, Getting...
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Preparing an ERP implementation plan can be a challenging task. In this book excerpt, find out how ERP implementation audits and assessments can be used to identify and answer important pre-project questions and create a clear path to ERP implementation success.
ERP: Making It Happen: The Implementers' Guide to Success with Enterprise Resource Planning, Ch. 5
Table of contents:
Preparing an ERP implementation plan: ERP audit and assessment
Introduction to ERP and designing a business case for ERP
ERP cost benefit analysis for stand-alone projects
This step gets at questions like these:
It takes too long to respond to competitors' moves. How can we get better and faster internal coordination, so that we can be more responsive?
We really want to improve our ability to manufacture; what should we do first?
We have a real need to improve our financial reporting and want to do ES but can we do ERP too? Do we need to do ERP also?
We think we need ERP, but we also feel we should get started on reorganization. Can we do both at the same time?
We feel we're in big trouble. We hardly ever ship on time. As a result, customers are unhappy and we're losing market share; we have major cash-flow problems; and morale throughout the company is not good. What can we do to reduce the pain level, quickly?
We've just begun a major initiative with internet selling. However, we're still in order-launch-and-expedite mode, with backorders and material shortages like crazy. Some of us are convinced that we'll never get really good with internet sales if we can't learn to control or predict our basic business.
What to do, and how to get started -- these are the kinds of issues addressed by audit/assessment I. Its purpose is to determine specifically which tools are needed, and in what manner they should be implemented -- company wide or fast track. For example, a company may need Enterprise Resource Planning and Enterprise Software badly. It may want to implement ERP on a company-wide basis, mobilizing virtually all departments and people throughout the total organization.
However, this may not be possible. Other time-consuming activities may already be underway, such as introducing a new product line, building a new plant, entering a new market, and/or absorbing an acquired company. Everything about ERP may be perfect, except for the timing. Although the company may be willing to commit the necessary dollar resources to the project, the essential resource of people's time and attention simply might not be available. "Turning up the resource knob" is not an option.
In this case, the decision coming out of audit/assessment I might be to implement Quick-Slice ERP into one or several major product lines now. (A Quick-Slice ERP implementation involves far fewer people, and it's almost always possible to free up a handful of folks for a focused project like Quick Slice.) The early "slices," perhaps more than just one or two, would be followed by a company-wide implementation later, after completion of the other time-consuming high-priority project(s).
Audit/assessment I and its companion, audit/assessment II, are critically important to ensure that the improvement initiatives to be pursued by the company:
- match it's true needs.
- generate competitive advantages in the short run.
- are consistent with the company's long-term strategy.
Participants in this step include the executives, a wide range of operating managers, and, in virtually all cases, an outside consultant(s) with Class A credentials in ERP/MRP II who is knowledgeable regarding Enterprise Software. It's quite rare that a given business unit (company, group, division) possesses enough internal expertise and objectivity to put these important issues into focus.
The process is one of fact finding, identifying areas of consensus and disagreement, and matching the company's current status and strategies with the tools it has available for execution. The end result will be an action plan to move the company onto a path of improvement. Typically, the recommended action plan is presented in a business meeting with the executives and managers who've been involved to date. The purpose for this session is to have the action plan explained, questioned, challenged, modified as required, and adopted.
Another very important activity should take place in this meeting, and we call it consciousness raising. The presentation must establish the connection between the company's goals and the set of tools called ERP, and must outline how ERP can assist the company in reaching those goals and objectives (increased sales, reduced costs, better product quality, improved quality of life, enhanced ability to cope with change, etc.). The general manager and other key people can then see the real need to learn about ERP in order to make an informed decision about this potentially important issue. Learning about ERP is called first-cut education and we'll get into it in just a moment.
The time frame for audit/assessment I (elapsed time, not peopledays) will range from several days to one month. Please note: This is not a prolonged, multi-month affair involving a detailed documentation of current systems. Rather, its focus and thrust is on what's not working well and what needs to be done now to become more competitive. (At this point, let's assume that the output from audit/assessment I has specified a company-wide implementation of ERP.)
Read other excerpts and download more sample chapters from our manufacturing ERP bookshelf