ERP IMPLEMENTATION

ERP IMPLEMENTATION LIFE-CYCLE

ERP implementation project also has to go through different phases (see Fig. 22.1). There are
no clear demarcating lines between these phases, and in many cases one phase will start before
the previous one is completed. However, logical order is followed. Also, all the phases that we
are discussing in this session may not be applicable in all cases. For example, in some cases,
the organization must have already identified a particular package; then the pre-selection
screening and package evaluation phases are not done. The different phases of the ERP
implementation are given below:

• Pre-evaluation screening
• Package evaluation
• Project planning phase
• Gap analysis
• Reengineering
• Customization
• Implementation team training
• Testing
• Going live
• End-user training
• Post implementation

Pre-evaluation Screening
Once the company has decided to go in for the ERP system, the search for the perfect package
starts. Analyzing all the packages before reaching a decision is not a viable solution. It is also
a time-consuming process. Thus, it is better to limit the number of packages that are evaluated
to less than five. It is always better to do a thorough and detailed evaluation of a small number
of packages, than to do a superficial analysis of dozens of packages. Therefore, the company
should do a pre-evaluation screening to limit the number of packages that are to be evaluated
by the committee.
Not all packages are equal—each has its own strengths and weakness. The pre-evaluation
process should eliminate those packages that are not suitable for the company’s business
processes. One can zero in on the few best packages by looking at the product culture of the
vendors, getting help from external consultants, and most importantly finding out what package
is used by similar companies. It is always better to look around to find out how the different
packages are performing in environments similar to yours. while making the analysis it is a
good idea to investigate the origins of the different packages. Once you select a few packages
after the screening, you can start the detailed evaluation process.

Package Evaluation

The evaluation/selection process is one of the most important phases of the ERP
implementation because the package that you select will decide the success or failure of the
project. Since ERP systems involve huge investment, once a package is purchased it is not an
easy task to switch to another. The most important factor that should be kept in mind when
analysing the different packages is that none of them are perfect. The objective of the selection
process is not to identify a package that covers each and every requirement (a perfect fit). The
objective is to find a package that is flexible enough to meet the needs of the company, or in
other words, software that could be customized to obtain a ‘good fit’.

Some important points to be kept in mind while evaluating ERP

software include:

• Functional fit with the company’s business processes

• Degree of integration between the various components of the ERP system
• Flexibility and scalability
• Complexity
• User friendliness
• Quick implementation
• Ability to support multi-site planning and control
• Technology—client/server capabilities, database independence, security
• Availability of regular upgrades
• Amount of customization required
• Local support infrastructure
• Availability of reference sites
• Total costs including cost of license, training, implementation, maintenance, customization,
and hardware requirements

Project Planning Phase

This is the phase that designs the implementation process. It is in this phase that the details of
how to go about the implementation are decided. Time schedules, deadlines, etc., for the project
are arrived at. The project plan is developed. Roles are identified and responsibilities are
assigned. The organizational resources that will be used for the implementation effort are
decided and the people who are supposed to head the implementation are identified. The
implementation team members are selected and task allocation is done. This phase will decide
when to begin the project, how to do it, and when the project is supposed to be completed.

Gap Analysis

This is the process through which companies create a complete model of where they are now
and where they want to be headed. The trick is to design a model, which both anticipates and
covers any functional gaps. It has been estimated that even the best ERP package, customized
to a company’s needs meets only 80% of the company’s functional requirements. The
remaining 20% of these requirements present a problematic issue for the company’s BPR. One
of the most affordable, albeit painful, solutions entail altering the business to ‘fit’ the ERP
package.

Reengineering

It is the fundamental rethinking and radical redesign of business processes to achieve

improvements.
Customization:
It is the main functional area of ERP Implementation. Arrived solution must match with
overall goals of company. Prototype should allow for thorough testing and attempts to solve
logistical problem.
Implementation Team Training:

Now after above processes, implementation team knows how to implement system. This is
phase where company trains its employees to implement and later run system.

Testing:

This is the phase were team brake system. Sometimes, system overloads or multiple users
trying to login at same time etc. Test cases are designed specifically to find weak links in
system. Different types of testing are: Unit testing, integration testing, acceptance testing,
security testing, performance and stress testing.

Going Live:

Once technical and functional side is properly working and testing is done. There comes
next phase i.e, “Going Live”. Once system is ‘live’, old system is removed & new system is
used for doing business.

End-User Training:

This is the phase where user of system is given training on how to use system. Employees
and their skills are identified and training is given to them in groups based on their current
skills. Every employee is provided with training of job which he is going to perform.

Post-Implementation:

It is the most important and critical factor. Post Implementation is based on two words-
Operation and Maintenance of system. Duration of this phase depends on training
efficiency. Necessary enhancements & upgrades are made in this phase.

THE IMPLEMENTATION CHALLENGES

ERP implementations are more likely to fail, be delayed, cost more than forecast, or fail to
deliver full functionality than they are to succeed.

Inadequate Requirements Definition

Inadequate definition of requirements is one of the major challenges faced by the

implementation team. The requirements definition should clearly specify the issues and
problems that the ERP system is supposed to solve, the additional capabilities expected out of
the system, and so on. Failing to provide these (which is the management’s responsibility)
could result in the selection of the wrong ERP package, unnecessary customization, lack of
employee retraining, and so on, all of which can result in the failure of the ERP implementation.

Resistance to Change

Implementing an ERP system is a change, and it is human nature to resist change. Thus, any
ERP implementation will face some amount of resistance. if employees are not convinced
about the importance of ERP and the benefits of using an ERP tool or system they will not be
fully co-operative, which can result in the failure of the system. One main reason for the
resistance is ignorance ERP implementation team backed by the management spends a little
time and effort educating users about
ERP and how it will help the company and the users, then user resistance can be reduced if not
fully eliminated. Another method of reducing resistance is by creating champions. The
champion becomes the expert user, facilitator, and trainer of the tool.

Inability to Achieve Organizational Understanding

The biggest ERP challenge faced by organizations is recognizing that the integration of
previously un-integrated job functions requires that knowledge workers supporting different
organizational functions will now be using the same software and they too will be entering
information that affects the other. To do this accurately, these knowledge workers must have a
much broader understanding than they did before the ERP solution, and learn how others in the
organization perform their functions.

Inadequate Resources

ERP implementation is a very costly affair that requires a variety of resources—money, people,
software, hardware, and so on. There are many items that will be missed during the preparation
of the budget, but will consume money during the implementation. Another resource that is
always in short supply is skilled and motivated personnel from the organization. Getting the
right people with the necessary skills, aptitude, and enthusiasm is one of the most difficult tasks
faced by ERP implementation teams.

Lack of Top Management Support

The roles of top management in IT implementations include developing an understanding of

the capabilities and limitations of IT, establishing reasonable goals for IT systems, exhibiting
strong commitment to the successful introduction of IT, and communicating the corporate IT
strategy to all employees. The importance of top management support was instrumental in the
success of all ERP implementations. Thus, going ahead without solid backing from top
management is a sure recipe for disaster.

Lack of Organizational Readiness

The main challenge in the successful implementation of ERP system is the readiness of the
organization for a new system of functioning. The management should make sure that the
organization, the work process, and the employees are amenable to adapt to the ERP system.

Inadequate Training and Education

The role of training to facilitate software implementation is well-documented in the MIS

literature. Lack of user training and failure to completely understand how enterprise
applications change business processes frequently appear to be responsible for problem ERP
implementations and failures. ERP projects appear to have a six-month learning curve at the
beginning of the project. Although many companies use consultants to help during the
implementation process, it is important that knowledge is transferred from the consultant to
internal employees. Companies should provide opportunities to enhance the skills of the
employees by providing training on a continuous basis to meet the changing needs of the
business and employees.

Inaccurate Expectations

Careful deliberation of success measurement as well as management of expectations by the

implementation manager of ERP projects are important factors. Management of expectations
has an impact through all stages of the implementation life cycle.

Poor Package Selection

Selecting a good ERP solution provider is another challenge. Analyse the capabilities of the
ERP service provider and make sure the provider has the capabilities and the expertise to
provide you with a good solution. The choice of the package involves important decisions
regarding budgets, timeframes, goals, and deliverables that will shape the entire project.
Choosing the right ERP packaged software that best matches the organizational information
needs and processes is critical to ensure minimal modification and successful implementation
and use.

Poor Project Management

Specifically, proper management of scope is critical to avoid schedule and cost overruns and
necessitates having a plan and sticking to it. A project scope that is too broad or ambitious can
cause severe problems. Customization increases the scope of an ERP project and adds time and
cost to an implementation. The minimal customization strategy discussed later, which allows
for little if any user suggested changes and customizations, is an important approach to
managing the scope of an ERP project.

Customization Issues

There are four basic choices to customization:

1. Modify the ERP to match the organizational processes and/or data structures
2. Modify the organizational processes and/or data structures to match the ERP
3. Perform some of choice 1 and choice 2
4. Ignore the problem
Choices 1 and 2 require understanding of the ERP and organizational processes and data
structures. Most organizations approach the customization/tailoring decision without proper
information required to reach a good decision.

Long Payback Period

Another statistic not well-understood is that the return on investment (ROI) for most
organizations runs to almost three years A Deloitte [6] survey of Fortune 500 companies found
that 25% of organizations suffered a drop in performance when their ERP system went live.

Poor Communication and Co-operation

Communication is essential within the project team, between the team and the rest of the
organization, and with the client. Poor communication between implementation team members
and other organizational members caused many implementations to fail. A key factor for the
successful implementation of ERP systems requires a corporate culture that emphasizes the
value of sharing common goals over individual pursuits and the value of trust between partners,
employees, managers, and corporations.

Data Quality Costs

A data management study performed by Price Waterhouse Coopers survey [7] revealed the
two troubling
facts about organizational data quality:

1. Only 15% of companies are very confident of the data received from other organizations 2.
Only one in three companies are very confident about the quality of their own data Poor quality
data input can be fatal to ERP projects. Just imagine the confidence that the new system
engenders if they get bad data out of the system more easily than the legacy system.

Hidden Implementation Costs

There are many items that are missed or that will consume more money than that allotted while
preparing the implementation budget. These cash shortages will hinder the smooth
implementation and if the company does not have sufficient reserves to bear the additional
expenditure, the implementation will have to be left half way.

Improper Integration

The benefits of an ERP application are limited unless it is seamlessly integrated with other
information systems. Organizations face many challenges in ERP integration—the challenges
of integrating various functional ERP modules, the challenge of integration with other e-
business software applications, and the challenge of integration with legacy systems. The
success of ERP implementation is the success of ERP integration. There are three areas where
integration has to succeed—integration of ERP modules, integration of e-business applications,
and integration with legacy systems

Improper Operation/Use

The most crucial challenge is the optimal utilization of the ERP software solution. You can
have the best ERP solution implemented but if its resources are not utilized to the fullest, the
whole initiative goes for a toss. However, if it is deployed appropriately, ERP solutions can
create dramatic changes in your business performance.

ERP TRANSITION STRATEGIES

An ERP implementation strategy determines how the ERP system will be installed. Different
companies may install the same ERP software in totally different processes. The same company
may implement different ERP software in the same approach. There are three commonly used
methodologies for implementing ERP systems. There are several transition strategies but most
of them are variants of the four basic types:
• Big bang
• Phased
• Parallel
• Process line
• Hybrid

There are a number of proven strategies for transitioning to a new ERP system, each with
advantages and disadvantages. Implementing an ERP solution is all about stakeholders
working together toward a single goal: business success.

1. Big bang
In this approach, also referred to as the “single-step method,” all users move to the
new system at the same time. You’ll need to have completed all configuration and
testing of the new system, as well as training, by the go-live date.

The advantage here is that you quickly start realizing ERP benefits, such as higher
productivity, better insights and lower operating costs. However, once you’ve rolled
out the system it’s hard to go back, so it’s critical to get things right. Any error or
glitch—even a relatively minor one—can impact employees, business partners and
customers. There may also be a temporary productivity drop as employees get used to
the new system.

2 Phased rollout
Under a phased approach, the deployment of features, tools and components is done
over an extended period, which may cover weeks or months. This more measured
approach can be less risky than the big-bang strategy. It also enables the company to
focus first on “quick wins”—the functions that deliver the most immediate benefits—
and to apply learnings from the initial deployment phases to improve the process for
subsequent phases.

But there are drawbacks: It takes longer to get the full benefits of the new ERP, and
your company will need to support, and pay for, two systems at the same time.

There are three primary approaches. Organizations may switch on one ERP
module, iron out bugs and process issues, and then tackle another phase. Most
organizations start with core functions and expand from there. Another possibility is
to deploy by business unit, such as HR, finance or logistics, and then move forward
based on needs and hierarchies.

The third approach is to phase the rollout by geography. A company might test and
perfect the system at one location before moving on to other offices, factories or
facilities.
 3 Parallel adoption
With this strategy, the organization keeps using its legacy systems in parallel with the
new ERP for a specific length of time. This is generally considered the least risky
approach because it’s possible to revert to the legacy system if you run into problems.
Because of this safety net, some organizations use this strategy for critical functions
that absolutely must always continue operating.

This approach can also make it easier for some users to gradually adjust to the new
system. However, parallel adoption can be an expensive approach because it requires
more staff time and resources to keep two systems running at the same time. And
parallel adoption can create its own risks: Entering data twice, into two different
systems, doubles the chance of errors.

Still, this might be the best bet for companies using a two-tier ERP architecture, a
setup often found in firms that have expanded, whether organically or through
mergers and acquisitions.

4 Hybrid
As the name implies, this approach combines elements of the strategies above. For
example, an organization might switch on core ERP modules using a big-bang
strategy, then roll out other modules in phases to specific locations or departments.

METHODOLOGY AND FRAME WORK - TRAINING - DATA MIGRATION.

Implementation Methodologies

Since almost all the methodologies look the same, the company should look into the minute
details when comparing the different methodologies. In fact, the minor details will say whether
the methodology is practical and successful. The minor details like the content of a particular
slide, the write-up in a brochure, the conduct of the consultants during the presentation and
most importantly, the practical demonstration that the consultants really have dealt with similar
situations before should be considered before making the selection.

The implementation involves a series of activities that do not fit naturally into the normal
business cycle of events. These activities are of finite duration. They have an end point, after
which any further work should become absorbed into the normal business activity. It also
requires allocated resource and the development of specific skills. It is multidisciplinary and
team orientated. The complexity is compounded by the need to involve an increasing number
of people over time, distracting them from their normal activities.

ORGANIZATION OF THE ERP PROJECT TEAM

The person who manages the implementation is the project manager. The project manager
reports to a steering committee, who reviews progress and resolves any territorial, resource, or
policy disputes. The CEO leads the steering committee and sponsors the project.

Working for the project manager are the members of the project team who develop the
processes using the new software. They then roll the new processes out in readiness for go-live
day, producing documentation, and training end-users. The vendor will appoint one of its
consultants to provide support to the project manager, manage the client account, and
coordinate other vendor resources. Vendor consultants provide advice about best working
practices, software functionality, and assist with technical issues. Training is provided in the
first instance by the vendor to the project team through either the consultants or specialist
trainers. Once the project team have developed and proven the new way of doing things, they
produce the procedural documentation and train the end-users.

IMPLEMENTATION STRATEGY

Consideration should be given to a number of factors:

• Speed or urgency of implementation

• Availability of people for carrying out the implementation tasks
• Availability of time for training all users
• Cost
• Confidence in the new system
• Disruption to operations
• Total timescale

ERP IMPLEMENTATION PLAN

Implementation planning includes developing the implementation strategy and implementation

schedule and organizing the implementation team. The implementation plan documents the
who, what, why, where, when, and how of the project. It is the outcome of discussions with
affected people and involves negotiations over resources, timescales, and costs and their
agreement. It should be realistic. The plan provides a guide to the project and is used to monitor
progress. It enables people to carry out a set of interconnected tasks in a coordinated manner.
Setbacks are highlighted and remedial action established. If necessary, dates are rescheduled.
Importantly, the plan is communicated to all those who need to know about the project making
them aware of progress and changes.

The implementation plan should address all concerns such as the existing procedures, the effect
of the ERP implementation on the procedures, how it will affect the employees, the work
environment of the organization, the ERP awareness of the employees, creation of ERP user
manuals, and so on. The most basic plan will identify all the activities, those doing them and
the time frame. A project plan can be handwritten or produced using some computer application
such as a spreadsheet or specialized packages such as Microsoft Project

The project manager will develop a detailed project plan, where the high-level plan is broken
down into a lot more detail with the time windows being weeks or days rather than months.
Additional columns may be used to identify start dates, end dates, amount of work (hours),
estimates of percentage completion, lateness, costs, and any other issues deemed relevant.
RISK ASSESSMENT

The aim is to anticipate possible problems, assess their likelihood of occurrence and their
intensity of impact and finally, to establish how they can be prevented or best handled if
prevention is not possible, e.g. causal analysis.
The first task is to understand what is involved. Risk assessment should be done at the first
possible opportunity and should be done by an individual or team of experienced professionals.
An appreciation of what is involved will enable the potential risks to be determined. An insight
into potential issues can be gained by reviewing the main problems experienced by others.
Many tend to be people related. Technology and methodological issues tend to be of lesser
prominence.

Each risk is assessed for how severely it can impact the project and the business, and the
likelihood that it will occur. If a risk has a high severity and a high likelihood of occurrence,
then this requires immediate attention. Likewise, risks rated with low severity and high
likelihood of occurrence will require attention if they are not to be disruptive. Cases where
there is a low likelihood of occurrence can be put to one side. Note that they are not discarded.
This process prioritizes those issues that need attention. The result should be a reduction in the
likelihood that things will go wrong.

BUDGET

With the costs identified (during the planning stage), a budget can be established. It With the
costs identified (during the planning stage), a budget can be established. It should also be
anticipated that problems and unforeseen issues are likely to result in additional expenditure.
Actual expenditure is monitored against the budget for the duration of the project. Variances
to be aware of include high consultancy costs, particularly in the early stages of the project,
and low training costs. If there is a significant variance then the question has to be asked as to
why this is so. The other major cost to monitor is training. When there is an indication that
budgets are going to be overspent, then it tends to be the training budget that suffers.

COST

The total cost of ERP ownership includes the costs of packaged software, hardware,
professional services
(for ongoing maintenance, upgrades, and optimization), and internal costs.

a budget needs to be established. This will

be based upon an estimate of the likely costs. In identifying where the costs are likely to arise,
consideration should be given to:

• Hardware
• Operating system
• Database license fee
• Core software license fee
• Additional module license fee
• Additional seat license fee
• Third-party software license fee
• Integration of third-party software
• Software customization
• Project management
• Consultancy
• Training
• Living and travel expenses (also travel time)
• Software maintenance or warranty renewal
• Upgrades

The vendor will provide much of this cost information.

While some of these costs will be one-off (e.g. hardware, consultancy, etc.), others will be
ongoing (e.g. maintenance, training, etc.). To get a better picture of the cost exposure, a long-
term perspective should be taken. A meaningful time horizon is five years. By the time that
five years has passed it is quite possible that the application has been reviewed and a new
budget established for additional work, such as an upgrade or additional functionality. Not to
be overlooked are the indirect costs, which are mainly internal costs.
These can include:
• Time and consequent cost of employees involved in the project
• Cost of temporary personnel to replace those involved in the project
• Cost incurred due to other activities not being carried out costs related to off-site travel and
sustenance, e.g. off-site training
• Costs related to the internal resources, such as the implementation team or work team, who
administer and maintain the system and provide internal technical support

PERFORMANCE MEASUREMENT

For each step or series of steps of the implementation, objectives can be defined which, if
achieved, represent progress. By achieving these deliverables, there is less likelihood of
problems arising at a later date as a result of an earlier event. Conversely, failure to achieve
these deliverables and the subsequent progression to the next stage will increase the likelihood
of potentially significant problems arising at a later stage. Furthermore, progress can be
monitored in a methodical manner. Each task or set of tasks is evaluated as to its successful
completion. Together, the four measurables (cost, time, benefits, and deliverables) present
different dimensions for measuring the performance of an implementation. Often it is only the
cost and time dimensions that are monitored.

PROBLEM RESOLUTION

During the implementation, there will be many issues which are raised and which will require
resolution. The danger is that some of these issues, having been identified are forgotten, only
to surface at a later date, perhaps after the system is live. Thus, it is desirable that there is an
agreed procedure for recording issues and their resolution. It should be accepted practice that
when an issue is raised it is recorded. When the issue has been resolved it can then be marked
as closed. By adopting a simple approach, unresolved issues are highlighted.

SYSTEM ISSUES

From an ERP perspective, there are a few questions that should

not be overlooked.
• How does the system perform when the ERP application is under heavy use?
• How quickly will storage space be consumed when the system is live?
• What is the back-up procedure?
• Can the live domain be duplicated so that work can be done in the other domain such as new
process development, without affecting the live domain?
• How many alternative domains can be created? How long will the transfer take?
• What happens when two people try to access the same data?
• Does the system lock and if so, how is it unlocked?
Do the locations of PCs and printers require to be changed?
• If the intention is to use pre-printed stationery on dedicated printers can this be done and if
so
what is involved and when is the time to do it?
• How secure is the system?
• How will user access be selectively restricted? Is it by screen or by field?
• How are passwords managed?
• What user menus need to be generated and how will this be handled?
• Is there an automatic log-out facility if an account is logged-in and not used for a period of
time?
• What is the disaster recovery procedure?

This is not an exhaustive list but one that reveals the diversity of issues that need to be
addressed. The earlier these issues are identified, the more time there is for dealing with them.
A minor detail like a dedicated printer for pre-printed stationery may prevent purchase orders
from being issued if the printer cannot be configured so that the required data prints correctly.

ERP IMPLEMENTATION METHODOLOGIES BY VENDORS AND

CONSULTING FIRMS

A methodology is a roadmap to an implementation. The purpose of a methodology is to deliver

an implementation on time, according to specifications, and within budget. Most vendors,
especially in the software industry, have developed their own methodologies. Consulting
companies also developed their own methodologies in relation to a product. Vendors primarily
use methodologies as a marketing tool in order to alleviate the fears of the top management
when they are considering implementing a major software application (enterprise resource
planning, supply chain management, customer relationship management, etc.).
Accelerated SAPTM (ASAP)
The ASAP Roadmap is a detailed project plan by SAP that describes all activities in an
implementation. It includes the entire technical area to support technical project management
and address things like interfaces, data conversions, and authorizations earlier than in most
traditional implementations. The ASAP roadmap consists of five phases:
1. Project preparation
2. Business blueprint
3. Realization
4. Final preparation
5. Go-live and support continuous change

ASAP provides examples, checklists, or templates as samples. They are used as a starting point
to avoid re-inventing the wheel. ASAP calls these accelerators. We will now see the different
phases in detail.
Project Preparation

Proper planning and organizational readiness assessment are essential and entails a
determination
of the following:
1. Full agreement that all company decision-makers are behind the project
2. Clear project objectives
3. An efficient decision-making process
4. A company culture that is willing to accept change

Business Blueprint

The engineer delivers a complete toolkit of pre-defined business processes. During the business
blueprint phase, the broad scope of mySAP is narrowed to fit the industry-specific processes.
Using questionnaires and the models from the business engineer, the business processes are
documented to reflect the future vision of the business.

Realization

Based on the business blueprint, a two-step process of configuring the mySAP system is begun.
First the baseline system will be configured. Second, the system is fine tuned to meet all of the
business process requirements. Since the initial configuration is based on the blueprint, the
baseline system gives a real-world view of how the business transactions will actually run.
Final Preparation

In this phase, the mySAP system is fine-tuned. Necessary adjustments are made in order to
prepare the system and the business for production start-up. Final system tests are conducted
and end-user training is completed. Initial audit procedures are developed.

Go-live and Support

In this phase, procedures and measurements are developed to review the benefits of the mySAP
investment on an ongoing basis. SAP support and services are provided to ensure that the
system continues to run smoothly. The online service system (OSS) provides electronic support
using a remote connection. The implementation assistant provides answers for most questions
that may arise. It is an easy-to-use repository of information defining what to do, who should
do it, and how long it should take.

TRAINING

Training is perhaps the most underestimated investment of the implementation life cycle. A
major complaint is that not enough training is done. One of the most common mistakes of all
ERP implementation is underestimating the time and cost of training end-users. Although
training is a projectmanaged activity, it appears to be widely neglected or is inconsistent in
application. The seven major pieces of the ERP training puzzle are:

1. Planning—Identifying the elements needed to structure the training direction.

2. Budgeting—Determining the investment required to create the infrastructure and impart
the training.
3. Staffing—Determining resources (internal and external) and needed prerequisite skills.
4. Partnering with the Business—Developing a shared responsibility and success plan.
5. Organizational Issues—Looking out for red flags that could impact the plan and coping
strategies.
6. Curriculum Development—Discussing best practices for ERP projects.
7. Implementation—Rolling out the training.

OVERVIEW OF TRAINING

It may be convenient to take an informal approach to training whereby people ‘pick up

knowledge and skills as they go along’, this is unpredictable in terms of a successful learning
outcome. A more formal approach to training tends to involve the following stages:

• Define learning objectives—what will the learner be able to do as a result of the training?
• Determine content—what skills and knowledge are to be developed?
• Plan—when and how will the training be delivered? What resources, materials, facilities are
required? How will the content be structured?
• Deliver—the experience of the learner
• Assess learner—has the learner met the objectives?
• Review effectiveness of the training session—what went wrong? What can be done better?

Those at the receiving end of the training are initially the project team members and the system
administrators and then later in the project the developers, QA team, testers, etc., and the project
leaders and managers. Each group of learners will have different requirements. Thus, the nature
of the training is likely to be different for each different stream of learners.

Training that occurs too far in advance of the go-live date will likely be forgotten. Training that
occurs too late will not be done in time and can lengthen the stabilization period. In order to fit
training between the current time and the go-live date, the firm must consider the amount of
time in that gap and the amount of time required by the users to learn. The amount of training
required is a function of the particular module for which users are being trained. In some cases,
it can take up to six months for users to get comfortable and proficient with the ERP software.

Time spent on training is time not spent on day-to-day activities. Employees can put in extra
hours in order to accommodate training hours. Still other firms have made use of temporary
employees. The hours assigned to training signal how important it is to the implementation.
Training scheduled during working hours indicates its importance, whereas training scheduled
outside of working hours suggests that training is not as important as day-to-day
responsibilities. The most pressing activities often get the most attention, to the detriment of
other, less pressing activities. This means that productive work usually receives greater
attention than training activities and so user ERP training might be pushed aside if firms do not
ensure that users take it seriously.
Training end-users on how to use an ERP system is a mix of technology, processes, and domain
area content in order to provide a context for the system.

Almost all ERP approaches to training have an element of classroom training. However, other
formats used include training over the Internet, computer-based training, and self-study. Based
on interaction with consultants, one approach that is consistently well accepted involves
designating a member (or group of members) of the client organization as ‘super users or
champions,’ who can then be responsible for training others. Training super users has a number
of advantages. First, this approach has been found to facilitate buy-in from the users, because
those who supply the training are people the users know. Second, the existence of super users
shows the other users that learning about the system is important. Third, developing super users
develops an important understanding at the user level.

TRAINING COSTS

Training costs will vary across ERP implementations. The training budget can be 15–20% of
the total project budget. Training is one of the most important hidden costs of an ERP
implementation. In most cases, there will always be training cost overruns. The organization
can reduce the training costs by first training a batch of employees and then making them
trainers so that they can train the colleagues.

Some of the items that contribute to the training costs are:

1. Training planners and content developers—For the training to be successful, it has to

be planned well; and for this purpose, the training needs of the employees are to be
identified. Once the needs are identified, the content that will address those needs have
to be developed. The people who do this—external ERP training consultants and
internal experts—have to be paid.
2. Hardware infrastructure—In order to create a training centre, the training team will
have to spend money on infrastructure like computes, training aids, stationery, etc., and
also on classrooms and labs to facilitate effective and uninterrupted training.
3. Software—This includes the demo or training versions of the ERP software that is being
implemented, other software packages like word processors, spreadsheets, presentation
software, e-mail programs, web browsers, etc., that are necessary to make the
employees computer savvy and also proficient in the ERP package the organization is
implementing.
4. Trainers—These include the salary of the trainers, both in-house experts and external
consultants. One way to minimize the cost on trainers is to get a batch of the employees
trained as trainers.
5. Vendor consultants and training materials—The vendor should provide the training
materials and training consultants for the initial phases—until the in-house trainers are
being trained and are capable of conducting training on their own. The vendor should
also provide updated training materials and conduct refresher courses for the in-house
trainers as and when upgrades and changes are made to the ERP system.
6. Support staff—The cost of people who do the various administrative tasks should also
be accounted for in the training budget. These people are important as they are the ones
who have to ensure that all the people are trained and the training goes on smoothly.
Their tasks include scheduling employees into appropriate courses, tracking
completion, scheduling make-up courses, adjusting training schedules, etc.

NEED AND IMPORTANCE OF TRAINING

Most implementation experts have pointed out that the main culprit of failed ERP
implementations is the end-user training. Experts say that the technical training of the core
team of people who are installing the software is done properly and there is no problem in that
aspect. It is the education of the broad user community of managers and employees who are
supposed to actually run the business with it that is not done properly resulting in the wrong
and improper usage of the system.
The education should impart to the users the ability to figure out the underlying flow of
information through the business itself. The program should explain the ERP basics, the
business processes, how the ERP system functions, how it automates the business processes,
how the action of a user affects the entire organization, and so on. The focus should shift from
mere training to providing education and with greater emphasis on education. Education will
tell the users why they are doing it and will help in winning support for the project as it will
enlighten the users, whereas training will only tell them what to do and how to do it. Another
problem is that the training typically occurs at the end of the implementation cycle, when
activities are often running late and being compressed. Training, too, gets squeezed in as a last-
minute activity. It is important to start the training program so that it will be nearly over by the
time the system goes live and then continue for a few more sessions to clear the issues faced
during the actual interaction with the ERP system. One of the results of not providing a proper
training program is that users fail to appreciate the consequences of their actions, often with
disastrous results.

TRAINING PHASES

The training strategy should include two phases of training—one before implementation and
the other during and after implementation. During the implementation and after the
implementation, the end-users are trained on ERP basics, process changes, and how to use the
ERP system.

Pre-Implementation Training

Implementation of the first phase of the training strategy is the training activity that relates to
the training of the project team and the system administrators. The focus of the training for the
project team will be upon understanding the functionality of the software. Training on such
subjects as best practices, process mapping, training skills, and documentation may be provided
by the vendor, but this will vary from vendor to vendor. The objective of the training is to
transfer knowledge and skills about the application, implementation practices, and operational
best practices from the external trainers to designated internal personnel.

Whilst most of this will be done in more formal Content Team members’ understanding of the
application functionality is critical for the effective development and introduction of new
processes. The first true exposure to the software comes when it becomes necessary to make
the functionality do what is required of it. There are various levels of knowledge and skills
required by the project team in order for them to develop business processes that utilize the
software. Each member requires knowledge about how to navigate around the system and the
detail of the functionality of concern.

A content matrix is the most useful reference for training developers, and it will grow into a
huge, complex document over the life of the project. Simply put, the matrix lists the skills that
should be imparted and tasks that must be taught and information to be presented for each job
role in the new environment. In its final form, it will not only guide development, but also
provide a complete checklist. Another useful document, using the curriculum matrix as its
basis, is an employee-job map that will map the employees in each department to appropriate
job roles and necessary training required, giving a departmental and end-user snapshot of the
training needed.
Planning

Training planning normally begins during initial phases of the ERP implementation project,
preferably during the project planning phase. Many companies find that planning for ERP
training is a multi-phased process. The extent and detail of the project plan grows over several
months, as you uncover new facts and come to fully understand the scope of the initiative. All
you really need to know is when to begin, the level of effort you need to apply, and the plan
deliverables you need to develop. As the ERP project evolves, you can adjust and add detail to
your plan and begin to schedule the work to be done. After the assessment, the organization
will have the following information:

Training plan for the end-users—A detailed analysis of what they know (current skill set) and
what they need to know (required skill set) and a training program to impart the skills that are
lacking.

Pre-training orientation plan—This plan should contain details and plans of the business skills
and knowledge end-users must obtain before ERP training begins, along with time schedule
for completing this training.

ERP training team training plan—This plan should define the talent mix and resources required
for the ERP training team. It should also identify the resources committed and needed for
analysis, design, development, delivery, and administration of training. The plan should also
point out the gaps between requirements and available talent, and identify strategies for
obtaining or developing resources.

• Training delivery plan—This plan should answer basic questions like how the curriculum is
going to be developed and delivered. It should contain an overview of tools needed, logistical
challenges, technical infrastructure requirements, training environment, and training delivery
mechanisms. It should also provide an initial timeline for rollout of education and training.

User Training (During and After Implementation)

The end-user and managers are trained during implementation and after the implementation.
The aim is to disseminate throughout the organization the project team’s knowledge and skills
relating to the application and the new processes. The expected outcome is the trainees being
able to use the system.

For this phase, a program can be developed which covers all the areas required. It can be
organized into different themes to reflect different topics and audiences. Whilst a general
overview will appeal to everyone, the specialist areas will only be relevant to a limited number
of people.

Some areas that will be relevant to everyone are ERP basics, business process, changed
business procedures, automation of tasks by ERP, and fundamentals of computer usage like
passwords, encryption, security, etc. Not to be overlooked is the fact that there may be new
users who have no keyboard skills. If that is the case, a touch-typing (typing without looking
at the keyboard and searching for the keys) course can be organized. A better option will be to
install touch-typing training software and ask the employees to learn it and pass the course.
Two types of audiences —end-users and managers. While the former will be interested in how
to use the system, the latter will be more interested in how to get information from the system.

The users can be further differentiated into casual users, normal users, and reflective users.
The interest of casual users is limited to being able to perform certain tasks when expected
from them. Normal users are regular users of a specific suite of functions. Their main interest
is using the system to do their job. Reflective users will want a deeper understanding of how
the system works so that they can solve problems and make improvements. Thus, it may be
appropriate to distinguish two levels of training: that essential to carry out tasks and a more
detailed session on the finer points of the system.

The format of this training will tend to be structured into formal training workshops based
around a PC. The data should ideally be that which they will be using when live so that real-
life situations can be simulated. The timing of the training should be such that there is not a
long gap between receiving training and using the application. A refresher course may need to
be considered as a contingency. The cost of the training should be monitored against the budget.

Planning

At the detailed level of each individual session, its preparation will be strengthened by its plan.
The training plan should include the training objectives, trainer, trainer qualifications,
audience, level and computer literacy of the audience, time, location, facilities required, content
and content structure, method, resources materials, and cost.

Training, Assessment, and Review

The training is complemented by an assessment to ensure that it has been successful and the
knowledge assimilation is satisfactory. During the training, the trainer will be confronted by a
mixture of attitudes and expectations. While there will be those with a positive outlook, there
will be others who have a negative view about the situation. Likewise, some may have high
expectations about the quality of training and fail to appreciate the inexperience of the trainers.
Thus, the trainers need to be aware that they may not be well received and be able to respond
accordingly

The training should result in the trainees developing the requisite skills being taught. To ensure
that this is being done, some form of assessment should be carried out. The emphasis is upon
assessing what level of skill or knowledge has been attained. the assessment may only reveal
what the person is capable of attaining rather than providing an indication that the person is
competent at a specific task. It may be necessary to provide refresher courses closer to the go-
live.

TRAINING STRATEGY

A training strategy can be developed defining the training policy and outlining the training
program. Each stream will be identified and outlined in terms of the above stages. The strategy
will provide an overview of the training objectives, identifying the people involved, the
different streams, and the content of each stream, organized into courses and sessions. A plan
will provide an overview of where, when, and how the training will be delivered. Preliminary
consideration will be given to the assessment of the learners. How can their knowledge and
skill competencies be assessed?
Furthermore, consideration is given to the effectiveness of the training and how this is assessed.
Finally, the projected cost will be calculated. These costs can then be used to set a budget. The
resultant strategy provides a framework within which to go about the training activity. If the
company accepts the strategy, it can be implemented. If the strategy is not accepted, then it
needs to be reviewed. The right balance needs to be struck between getting the training right
and the training being cost-effective.
The training strategy has two objectives—the transfer of knowledge from the vendor’s
personnel and external consultants to the organization’s key personnel and the dissemination
of this knowledge throughout the organization. More precisely, the learning objectives
establish what the learner should be able to do as a result of the training.

SUCCESS FACTORS

The biggest impact of ERP implementation is on the corporate culture, and the success of an
ERP implementation depends on the people using it. In order to change the skills, habits, and
attitude of the employees toward the ERP system and to make the employees see the potential
benefits of the ERP system to individuals and the organization, the organization has to give
them proper training, assurances that their jobs and careers are safe, and they will benefit from
the changeover.

six steps to handle the cultural changes that arise from ERP implementation:

• Start early—Though the timeframe in which employees need to change work habits may be
short, you can prepare them for the new system and reduce the emotional impact of the change
by starting early with targeted information campaigns and good training.

• Align the leadership team—Make sure they not only understand the nature and benefits of
the ERP system, but also the issues surrounding employee acceptance. The leadership should
also constantly reassure the employees and promise that they will do that is possible to make
the transition to the new system as smooth and painless as possible.

• Set reasonable expectations—Employees should understand that, in the short term, they are
only expected to achieve a basic level of competency. Beyond this transition period, there will
be many opportunities to excel and provide unique contributions.

• Communicate specifically and continually—Each level and area of the organization has its
own needs and issues. Develop a plan that addresses the unique situation of specific groups but
uses consistent and ongoing communication methods to keep staff updated on progress and
involvement opportunities during the implementation period.

• Identify new work teams and roles early—ERP systems bring large adjustments to work roles
and responsibilities. Identify and communicate these changes early, so employees affected fully
understand and mentally prepare for the new environment.

• Develop competency—Competency will provide comfort for most employees facing the new
environment. Make sure everyone has a solid overall understanding of how work flows through
the new system.

Erick Eric Kimberling, President and Founder of Panorama Consulting Group [3], gives six
keys elements to effective ERP implementation training for employees. They are:
• Focus on business processes, not system transactions.
• Relate new business processes to the existing environment.
• Leverage a multitude of tools for ERP training.
• Train the trainer, i.e., train ERP end users.
• Allocate plenty of time for ERP implementation training.
• Reinforce training with more comprehensive organizational change management
activities.

Data Migration

Data migration is the process of translating data from one format to another. Data migration is
essential when an organization decides to use a new computing system or database
management system that is incompatible with the current system. Typically, data migration is
performed by a set of customized programs or scripts that automatically transfer the data.

DATA MIGRATION PROCESS

Data migration is the process of moving required (and most often very large) volumes of data
from existing systems to new systems. Existing systems can be anything from custom-built IT
infrastructures to spreadsheets and standalone databases.
Data migration encompasses all the necessary steps to clean, correct and move data into the
new system. Technological changes, change in providers, software updates or data
warehousing/data mining projects make such delicate and critical operations necessary. An
ideal data migration solution allows one to:
• Reduce risk—Data being an organization’s most critical business asset, it is essential that any
manipulation be carried out without any disruption
• Improve data quality—The cleansing and correction solutions ensure perfect data integrity
after it has been migrated. From a user and development perspective, the migrated data results
are completely optimized
From a user perspective, the data migration solutions should make sure that a strategy is put
in place to achieve maximum flexibility and quality. This entails taking a number of measures
and
actions, including:
• Iteration—Data is iteratively identified and cleansed. The aim should be to give the users one
or more ‘iterative’ opportunities to identify corrupt data and then rectify it either using the
existing application functionality, or automatically cleanse the data within the data migration
functionality
• Weeding—Data weeding within the data migration mechanism allows for better identifying
candidates and non-candidates to migration
• Inspection—Users should be able to inspect data that has been archived, which is particularly
important where users no longer have access to their source application and data following
migration
MIGRATION METHODS
Two primary methods are used for migrating data from the legacy systems to the new ERP
database—
manual and electronic.

Electronic Method
In this method (see Fig. 34.1), we start with raw data in a legacy system such as an inventory
item master file. Using data migration tools and programs, we come up with a migration
strategy to export data to the new ERP system. In some cases, a migration is relatively
straightforward, with almost all relevant data coming from one file and going to another. In
other cases, the situation becomes much more complex. Sometimes the information will come
from one file and it will split into several different files in the new ERP system. Often special
logic has to be applied to the process.