Enterprise Resource Planning

Systems

Chapter 4

DEVELOPMENT LIFE CYCLE

Preview

There are various technical and organizational challenges in implementing ERP systems depending on
the organization, scope of implementation, business processes, and skill level of the end users.

The System Development Life Cycle (SDLC) provides useful guidelines to the ERP implementation
process.

Discussion on the key phases of the ERP life cycle with emphasis on roadblocks in each phase and
solutions available to overcome these roadblocks.
Systems Development Life Cycle (SDLC)

SDLC includes a systematic process of planning,

designing, and creating an information system for
organizations.
It is often better to have a structured methodology to
avoid mishaps and coordinate the design and
development tasks properly among the members of a
large systems development team.
Systems Approach—Complex problems are broken
up into smaller manageable problems using a
systems’ hierarchy, and then developing a solution for
each problem within the hierarchy.
Figure 4-1 Traditional SDLC Methodology
Figure 4-2 SDLC Approach
Rapid SDLC Approaches

Prototyping
• This approach does not go through the analysis and
design phase.
• It implements a skeleton or a prototype of the actual
system with a focus on data input and output.
• The idea is to demonstrate the system functionality to
the users.
• Feedback is incorporated into the new system and
demonstrated back to the users.
• This approach has proven to be very effective with user
interactive systems because the prototype is eventually
converted into a full-scale system.
End User Development (EUD)
• Users are trained to develop their own applications (e.g.,
a departmental employee tracking system with an Access
database).
Figure 4-3 Prototype Development
Differences between ERP and Other Software

ERP Other Packaged Software

Millions of dollars Hundreds to Thousands

Mission critical Support or productivity improvement

One to several years Almost instantly

Requires significant change management strategy

from beginning to end for success; business process Requires some training and support
change, training, communications, etc.

Requires in-house employee time, consultants and Requires little or no consulting support or vendor
vendor support in millions of dollars technical support
ERP Implementation Plan

Comprehensive
• Involves implementation of the full functionality of
the ERP software in addition to industry-specific
modules.
• Requires a high level of business process
re-engineering.
Middle-of-the-Road
• Involves some changes in the core ERP modules
and a significant amount of business process
re-engineering.
Vanilla
• Utilizes core ERP functionality and exploits the
best practice business processes built into the
software.
• Business process re-engineering is eliminated.
ERP Implementation Methodology

An ERP development life cycle provides a systematic approach to implementing ERP software in the
changing but limited-resource organizational environment.

The traditional ERP life cycle accomplishes one stage at a time and requires formal milestone approvals
prior to moving to the next stage.

In a rapid ERP life cycle, once a company commits to the implementation, employees are empowered
to make the decisions to keep the project moving forward.
Figure 4-4 Rapid Application Development Process
Traditional ERP Life Cycle

Scope and Commitment Stage

• In addition to conducting the feasibility study, a

scope of the ERP implementation is developed
within the resource and time requirement.

• Characteristics of the ERP implementation are

defined.

• Develop a long-term vision for the new system and

a short-term implementation plan and top
management’s commitment.

• Vendor Selection.
Figure 4-5 Traditional ERP Life Cycle
Traditional ERP Life Cycle (Cont’d)

Analysis and Design Stage

• A decision on the software is made and decide on
consultants and SMEs.
• Analysis of user requirements.
• Map the differences between the current business
process and the embedded process in the ERP software.
• Design a change management plan, a list of embedded
processes, user interface screens, and customizable
reports in the ERP software.
• Data conversion.
• System conversion.
• Training.
Traditional ERP Life Cycle (Cont’d)

Acquisition & Development Stage

• Purchase the license and build the production version of the software to be made available to the
end-users.

• The tasks identified in the gap analysis are executed at this stage.
• Change management team works with end-users on implementing the changes in business
processes.

• Data team similarly works on migrating data from the old system to the new system.
• Finally, the ERP system needs to be configured with proper security.
Traditional ERP Life Cycle (Cont’d)

Implementation Stage
• Focus is on installing and releasing the system to
the end-users and on monitoring the system
release to the end-users.
• System conversion (4 Phases)
• Phased.
• Pilot.
• Parallel.
• Direct Cut or big bang.
• Feedback received from system usage needs to be
funneled to the post-implementation team for
ongoing system support.
Table 4-2 List of Scopes and Commitments

Evaluation of the functions provided by the ERP system compared with the
Gap Analysis
operational processes necessary to run your business

Establishes which sites will be addressed, the geographical locations of the

Physical Scope
sites, and the number of users.

Will the current processes be refined, replaced, or eliminated? What users,

BPR Scope
departments, sites will be affected?

How much modification will be done to the ERP software? What processes will
Technical Scope
be utilized as is and which will be customized?

Resource Scope How much time and budget is allocated for the project?
Which modules should be implemented? How should the modules be connected
Implementation Scope
to the existing system?
Figure 4-6 ERP Conversion Approaches
Traditional ERP Life Cycle (Cont’d)

Operation Stage

• Handover or knowledge transfer is the major

activity as support for the new system is migrated
to the help desk and support staff.

• Training of new users to the system as ERP

modules are released.

• Managing of new releases of the software,

installation of patches and upgrades.

• Managing the software contract with the ERP

vendor.
Figure 4-7 ERP Life Cycle Phases Summary
Role of Change Management

System failures often occur when the attention is not paid

to change management from the beginning stages.

A vision for CM needs to be articulated from the first stage

and then revised, monitored, and implemented on a
constant basis.

SMEs and other internal users have the role of working with
the team and to guide the implementation team on all the
activities of change management.

Support of the top management as well as skills of the

change management team are essential for successful
implementation.
Methodologies used in ERP implementation

Total Solution (Ernst & Young, LLP)

Phases

• Value Proposition. Does the solution make sound

business sense?

• Reality Check. Is the organization ready for change?

• Aligned approach. Setting the right expectations that
deliver both short-term and long-term value.

• Success Dimension. Getting the right blend of people,

skills, methods, and management in the team.

• Delivering Value. Measuring results and celebrating

success.
Methodologies used in ERP implementation (Cont’d)

Fast Track (Deloitte & Touche)

Phases
• Scoping and Planning: Project definition and scope.
Project planning is initiated.
• Visioning and Targeting: Needs assessment. Vision
and targets identified. As-is modeling.
• Redesign: To-be Modeling. Software design and
development.
• Configuration: Software development. Integration
test planning.
• Testing and Delivery: Integration testing. Business
and system delivery.
Methodologies used in ERP implementation (Cont’d)

Fast Track (Deloitte & Touche)

Areas
• Project Management (project organization, risk
management, planning, communications,
budgeting, quality assurance).
• IT Architecture (hardware and network selection,
installation, operations, design, development,
installation).
• Process and Systems Integrity (security, audit
control).
• Change Leadership (leadership, commitment,
organizations design, change-readiness, policies,
performance measurements).
• Training and Documentation (needs assessment,
training design and delivery, management,
end-users, operations, and helpdesk).
Methodologies used in ERP implementation (Cont’d)

Accelerated SAP (ASAP)

• Project Preparation. Proper planning and assessing organizational readiness is essential.
• Business Blueprint. The engineer delivers a complete toolkit of predefined business processes.
• Realization. Based on the business blueprint steps are taken to configure the R3 system.
• Final Preparation. In this phase, the R3 system is fine-tuned. Necessary adjustments are made.
• Go-Live and Support. Procedures and measurements are developed to review the benefits of the R3
investment on an ongoing basis.
Business Integration Methodology (BIM)

Business Integration Methodology (Accenture)

• The Planning Phase. Help define appropriate strategies

and approaches for achieving an enduring competitive
advantage and building stakeholder value.

• The Delivering Phase. Translates the business

architecture into a specific business capability.

• The Managing Phase. The Managing Phase directs,

coordinates, and monitors the activities outlined in the
other three phases, in order to achieve improved
business results.

• The Operating Phase. Operates the new business

capabilities that were created in the Delivering Phase.
Agile Development

Agile methodologies start with smaller sets of

requirements, they start small and deliver
functionality incrementally in a series of releases.
No single release covers all requirements, but every
release delivers more than the previous one.
Users are able to provide feedback quickly on how the
system meets their needs and also if a requirement is
missing or wrong, it can be corrected quickly.
Two of the most popular implementations are:
• Scrum- Much is left up to the project team.
• Extreme programming (XP)- Stresses customer
satisfaction and gives working software to the
customers quickly and incorporates their feedback
quickly.
Comparing and Contrasting SDLC with ERPLC

SDLC ERP Life Cycle

Develop a new system to support Implement a packaged system to support

Goal
the organization requirements the organization requirements

Evaluate user needs through

Vendor analysis and evaluation of business
Analysis observations and interviews and
process changes due to the implementation
create system specifications

Installation and Customization plan of ERP

Develop new system architecture,
Design software, data conversion, and change
user interface, and reporting tools
management strategies

Acquire hardware, software,

“Go-Live” conversion or releasing the
Implementation develop applications, installation,
system to the users, training, and support
testing, training, and conversion
Comparing and Contrasting SDLC with ERPLC

SDLC ERP Life Cycle

Technical support mainly during Change management, process change, and

Consultant Role
design and implementation technical support from beginning to end

Significant oversight and involvement especially

Management Role Some oversight and support
in change management

Focus group providing input Multiple groups such as SMEs, advance users,
during various stages with most and self-service users are part of
End-User Role
involvement during implementation team with continuous
Implementation stage involvement

Maintains, updates, and provides Maintains, updates, upgrades, monitors change

Operations
technical support management strategy
Project Management

A clear project plan and reporting structure will better

ensure that the project receives the attention and
accountability needed to be successful.
The project owners, a project steering committee,
and project executive must develop the hierarchy and
determine responsibilities.
Many businesses now have a project management
organization within IT to provide the project
management necessary for company projects.
The functional, technical, and change management
staff for the project will likely consist of existing staff
from the business, new hires, and consultants.
Figure 4-8 Project Organization
The Project Organization

Project Management Office (PMO)

Project Leads
• They provide the input to management and coordinate team
activities.
Project Teams
• The Functional Team- Knowledgeable staff from each area.
• The Infrastructure Team- Implements hardware and software
• The Development Team- Modify the software to meet the
goals.
• The Conversion Team- Convert the legacy data to the new
system.
• The Reporting Team- Develops a reporting framework and
initial set of reports to be included in the system
implementation.
• The Change Management Team- Training and communications
plan for the project. Their role is to provide project
implementation information to key areas within the
organization.
Project Roles and Responsibilities

Identifying and describing roles and responsibilities for project staff is necessary to ensure there is
accountability within the project.

Defining roles, often used as job descriptions on a project, will be the responsibility of the project
management office.

Each member of the project team will need to know what is expected of them, who they will report to,
and what they will be evaluated on.
Implications for Management

It is critical to have solid top management

commitment.

It is important to have strong and experienced

program management.

It is a good practice to minimize the type and number

of customizations that are implemented.

It is critical to emphasize training and change

management.

• Effective and frequent communication keeps

everyone on the same page and give the greatest
chance of problems being identified early.
Summary

A review of the systems development life cycle—

both traditional and alternative approaches—and
points out the benefits and limitations of the
traditional and the newer approaches.
The ERP life cycle has variations from the SDLC
process. The key reason is that organizations buy ERP
as prepackaged software, and then have to customize
them as well as change their company’s business
processes.
There are three routes for the company in choosing
an appropriate implementation strategy;
• Comprehensive.
• Vanilla.
• Middle-of-the-road.
Summary (Cont’d)

There are rapid implementation methodologies developed by ERP consulting firms.

• Total Solution.
• Fast-Track.
• Rapid Application Development.
• ASAP.
• BIM.
Accelerated implementation approaches are very popular and require the use of experienced
consultants to leverage the knowledge of techniques that have worked well with other organizations.
Summary (Cont’d)

ERP applications generally do not require the rigorous

traditional SDLC process.
ERP software is mission critical, has a major impact
on the organization business processes, and impacts
a lot of people.
It is the role of the project management office to
address teamwork initially and throughout the project
as teamwork is paramount to the project.
Each person on the project needs to understand their
role and responsibility, thus making individuals and
the project organization accountable to the project
and the project’s success.
Review Questions

1. What is the role of the systems approach in the SDLC?

2. Briefly discuss the key phases of the SDLC methodology.
3. Discuss the alternate approaches of SDLC and the benefits of these alternatives.
4. Compare and contrast the three major ERP implementation categories.
5. What is ERP implementation methodology? Give examples.
Review Questions (Cont’d)

6. List the major tasks in the scope and commitment phase of the ERP life cycle.
7. List the major tasks in the analysis and design phase of the ERP life cycle.
8. List the major tasks in the acquisition and development phase of the ERP life cycle.
9. What is the role of change management in the ERP life cycle?
10. List the major differences between the ERP life cycle and SDLC.
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