csf s for erp implementation
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PGDM IB
Bindhya Narayanan 31Varun Sethumadhavan 45Divyambal VV - 57
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Source: Raymond (2004)
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It is important to define success for ERP
Optimal cost and risk of these valuable
technological investments vis-a-vis the potentialpayoffs.
Optimal success measured against a portfolio ofproject, early operational and long-term businessmetrics.
Optimal success measured for readiness towardsdynamic business.
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Source: Holland and Light (1999)
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ERP implementation : matter of repositioning thecompany and transformingthe business practices
Top management needs to identify the project as a
top priority publicly and explicitly, to set up thesuitable and competent project team, to share therole of new systems and structures through the
whole organization.
Two issues that should be emphasized in thefunction of top management support.
Business plan Financial budgets
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Business fit - An organization will try to purchase the packagethat fits best into its business process.
Modifying the software to fit the business means that it is
possible that any potential benefits from reengineering businessprocesses will not be achieved
The extentof customization determines the length of theimplementation. Custom modification may be an option to reduce the gap
between the system capability and the business practice, whichallows the customer to enhance the capability of the system Too much modification leads to a complex system difficult to
support and virtually impossible to upgrade to the newest
version of the software
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When should we implement the ERP systems and howlong shall we expect the installation job will be done?
Managers should consider its own business implications
and organizational resources, and then make areasonable schedule of implementation plan.
The length of implementation is affected to a great extentby the
1. number of modules being implemented2. the scope of the implementation (different functional
units or across multiple units spread out globally)
3. the extent of customization
4. the number of interfaces with other applications
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Encapsulates the existing business processes,organisation structure culture and informationtechnology Determines the amount of IT and organisationalchange required to successfully implement an ERP
system
Business and IT legacy are not separate problems
since many components of a business (e.g. work
flow and processes) are bound up in the design and
operation of the existing IT systems.
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Project schedule/plans is the formal definition of the project in
terms of milestones, critical paths and a clear view of the
boundary of the project.
Poorly planned schedules growth in the scale of the project (to
include all parts of the business) and the geographic complexity
of designing common systems across could cause delay
A clear business vision for the project - give the project direction
and scope. Without this, implementation is likely to be lengthy, costly and the
result misaligned with the organisation's overall strategic vision
Also ensures that an appropriate ERP strategy is selected
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Companies at the beginning of ERP Project
ERP Software Configuration different from CustomizedSystem
Software not to be modified as it reduces s/wfunctionality and increase in error possibility
Process to be simplified to eliminate redundant activities
IT systems
Current Business
Process withexisting ITsystems
Business processcontained within
ERP system
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Focus Areas for ERPs success:-
2 1 Team Composition
Multidisciplinary, dedicated teams
IT specialists + key users & operations
personnel + consultants with process redesign
& change mgmt skills
Requires time & effort
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User Resistance
Reengineered workers-grievance process
Changes in staff relationships
Requirement of managers soft skills
Users should take part in the activities of project
selection
Companies develop formal communication plans and
issue regular reports to achieve a higher level of
acceptance on ERP project.
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ERPs greatest challenge is to find and retain
individuals with ERP skills.
Projects require multiple skill sets, includingfunctional, technical, and interpersonal skills.
Recruitment & career development of experiencedemployee
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Consultants & IT vendors role
1.To remove knowledge barrier between various level of
management within
a company by making blueprint of their business process
2.Recommend which hardware and software that is most suitable
3.Assist companies in implementation management
4.Lead to valuable knowledge transfer in both directions
5.Act as knowledge providers that lower the knowledge deficiencies
existing within companies
6.Provide training as a valuable resource to develop skills that are
lacking in house
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1. Greater vendor participation in implementation and
support2. Higher rating of user capabilities by vendor
3. Higher rating of user skills by MIS management.
A highly skilled workforce is important for asuccessful ERP implementation.
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To eliminate major system glitches
Needed to identify any alignment problems thatmay have occurred
By appointing an executive-level individual withextensive knowledge of the organizationsoperational processes as the project leader
Team morale is a vital component for the success ofthe project.
Continuous evaluation required
Honest and open communication, cooperationamong all parties needed
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Bugs in the system & troubleshooting
Modified System would increase its possibility
Quick response
patience Perseverance Manage
problem solving Troubleshooting
firefighting capabilities
Hands on cooperation with vendors & consultants
Vigorous and sophisticated software testing easesimplementation
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1. A Critical Success Factors Model ForEnterprise Resource PlanningImplementation
Christopher P. Holland and Ben Light, Manchester Business School
2. Critical Success Factors in ERP
Implementation Li Fang and Sylvia Patrecia
June 13, 2005
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THANK YOU