ERP Assignment

- Utkarsh Mittal
11536

Q1​. Describe the various evaluation criteria at the time of selection of ERP packages

Ans​. Installation of ERP systems is a huge investment in terms of time, effort and money.
Hence, it is imperative to conduct due diligence and select the appropriate ERP package which
would be best for the company. This is essential for successful ERP implementation. The needs
and objectives may vary from company to company and thus “one size fits all” approach doesn’t
work. All potential ERP systems must be evaluated on the basis of various criteria and only then
should a company go ahead with the suitable one. These criterias are described as follows -

1. Total Cost of Ownership​ - There is a big variation in the price of ERP software. The
highest priced system may be five times the cost of the least expensive solution, but for
a reason. Some companies need the advanced functionality built into a higher priced
system, but others may have less complex criteria and can choose a more moderately
priced ERP solution. A company needs to decide upon the functionality it requires from
an ERP system and thereby a suitable system itself.

Apart from this, there are secondary costs involved such as training of employees,
maintenance and upgrades, server/technological infrastructure costs etc. apart from the
core price of the ERP system. All of these costs must be considered to fit completely
within the budget and while also considering the return on investment.

2. Needs - The primary reason for a company to opt for an ERP system or change to a
newer one is to support its goals. Every company has different objectives. For eg., a firm
with growth-based goals would expect the ERP system to double its business; or a firm
with efficiency goals would expect the ERP system to remove redundancies from its
pipeline. It is necessary that the EPR system is in sync with the company’s goals.

3. Modules requirements​ - Although all companies share some general operations:

accounting and marketing, for example, but In terms of function, its specific industry will
dictate the details. The needs of the company will govern the features that are most
important to it. The company should should be mindful about all the functions that occur
in an average business day.

4. Technological platform and upgradability​ - The cost of changing an ERP system

includes much more than the price of the software, it includes business disruption,
training, and lost time. Choosing a system that is based on newer technology will give a
company more longevity in the long run and will make a better investment.
 5. Past performance - ​The demonstrated history of the ERP vendors must be considered
by assessing the past failure and success rates in companies of similar function, size,
age etc. Also, references from within your network may be obtained as to get an
unbiased opinion.

Q2​. Discuss the role of vendors, consultants and users for selection of ERP

Ans​.

Role of the Vendor

As soon as the company signs the contract, the vendors should supply the product and its
documentation. Once the software is delivered, the company can develop the training and
testing environment for the implementation team. The roles of the vendors during and after
implementation of ERP are:
1. The vendor is responsible for fixing any problems in the software that the implementation
team encounters.
2. The vendor should have a liaison officer to constantly interact with the implementation
team.
3. The vendors provide initial training for the company’s key users. These key users are the
ones who will define, together with the consultants, how the software is to serve the
company.
4. They are also called as in-house functional experts who decide how the functionalities
are implemented to adapt the product to suit the company’s unique requirements. It is
very important to provide these in-house experts a through training on the features of the
package.
5. Vendor’s training should include showing the key users how the package works, what
are the major components, how the data and information flows across the system, what
is flexible and what is not, what can be configured and what cannot, what can be
customized and what should not, what are the limitations, what are the strengths and
weaknesses and so on.
6. The objective of the vendor training is to show how the system works, not to show how it
should be implemented. This means that the vendor demonstrates the product as it
exists and highlights what are the possible options available.
7. The company’s employees who are participating in the vendor training should try to
understand the characteristics of the package and the impact of the system on their
business processes. The trainees should use these training sessions to question the
vendor on all aspects of the system.

Role of Consultants
 1. Consultants administer each of the phases of the implementation. They ensure that the
required activities occur at the scheduled time and at the desired level of quality with
effective participation of all those who must participate.
2. Consultants add value to the project. They bring the know-how about the package and
about the implementation–the know-how that is not included in the standard
documentation. Thus by eliminating the trial-and-error method of implementation, and by
doing it right the first time, the consultants help in saving huge amounts of money, time
and effort.
3. Consultants should remain impartial while questioning current company processes in an
effort to promote better businesses practices and better implementation results. They
should strive to improve the company’s business processes so that the software
package can be used as it was originally intended by its developers.
4. The consultants are also responsible for analysing and clearly addressing the
customisation issues. ERP consultants show the advantages and drawbacks of each
area to the management and reach a consensus decision. Consultants need to balance
their loyalty to the client and the project with that of defending the package vendor, when
such defence is technically correct.
5. Consultant alerts the company management about actions and decisions to be taken.
This ensures that job will not be compromised and the implementation will not be
jeopardised. Once the project is complete, consultants will leave the company. However,
the knowledge of the project should remain within the organisation. Hence, consultants
should train enough people in the organisation so that the work they have started is
continued.
6. There are other tasks performed by the ERP consultants. They:
a. Maintain technical documents on the projects.
b. Analyse business requirements.
c. Prepare the functional specifications for ERP program development.
d. Perform Gap analysis and related studies.
e. Assess the competence level of the users of the ERP system.
f. Perform Product design and operations review.
g. Identify requirements of the users of the ERP system.
h. Interact with other modules’ consultants.

Role of Users

ERP end-users are the people who will be using the ERP system once it is implemented. Most
of the functions that the end users used to perform are being automated by the ERP system.
ERP system brings drastic transformation in the actual work process which leads to change in
old job descriptions.
1. It is human nature to resist change. Implementation of an ERP system brings change in
a very massive scale. Employees will fear that system will replace existing jobs, as many
functions will be automated. Also people will be afraid of the amount of training they
have to undergo and learning they have to do to use the new system. Job profiles will
 change, job responsibilities will undergo drastic alterations, and people will be forced to
develop new skill sets. Hence the users must pay attention to the various training
session conducted by the ERP vendors and consultants.
2. The automation of the business processes, through technology, can eliminate the jobs of
many employees whose function it is to record, control, calculate, analyze, file or prepare
reports. Even though ERP systems eliminate many existing jobs, it creates many new
ones with more responsibilities and value addition. Employees should develop relevant
skills to get away from the monotonous clerical work and transform themselves into
highly valued individuals, in a new and challenging working environment using modern
technology.