June 30, 2011

ERP Project - Key Success Factor 10: ERP Education & Training

Organizations would realize better Return on Investment (ROI) on their ERP investment, only when the users understand how to properly use the ERP system. Extensive exposure to the new ERP system & hands-on training would help the users to lighten the anxiety that comes with the transition phase. Indeed, the more the users know the inner workings of the new ERP, the more they will become confident in their abilities to take ownership & become valuable contributors to the ERP project success.

ERP Training is one of the most under-estimated items while ERP project budgeting. This is because the users have to learn how to use the ERP software & the new set of business processes. Typically not more than 5% of the effort is dedicated for the ERP Project. The business users can use the system much better & can realize great results, if the ERP training effort is increased to 10% of the overall ERP Project effort.


The training should be timed properly - it should not be very early, such that people forget it or very late that the ERP project training phase is very close to go-live.

The Core ERP team should have the basic understanding of ERP system & process at the start of the project itself, to contribute to the creation of a valid ERP Blueprint for the organization. ERP Blueprint would define the individual business process involved in every relevant operation in the organization. The business owners should be trained on the business functions that are relevant to their specific area of responsibility. The core team members should be trained to train the end business users as well.


The team members should carry out tasks in the test environment to validate that all the business requirements are in place in the new ERP. The team should enter the real transaction data & execute real life scenarios in the new ERP to confirm the required data accuracy & result. The project team needs to perform a final test on the data & processes once training is complete and make the necessary adjustments, if any.


ERP Training Phase include
s the following:

1) ERP Training Plan for the Team members
  • Prepare training plan for all user levels - Core-team member / end business user / maintenance team
  • Assess the skills-gap user-level wise & plan for upgrade (if any) before starting the training
  • Draft the Training Documentation
2) Train the users at all levels
  • Begin the training activities for all the users sequentially as below:
  • ERP Core team member training - “Train the Trainer” Model
a) Basic training on the ERP system & process at the project start, to create proper ERP Blueprint
b) Education & training on Business process, Modules, transaction workflow, MIS
c) Training on the conference room pilot
d) Training to manage the end user training & support
  • ERP End business user training
a) Basic training on the ERP system & process for better understanding of the ERP usage & benefits
b) Role based education & training on Business process, Modules, transaction workflow, MIS
  • ERP Maintenance team training
a) Training to manage the ERP master setup & administration, user rights, data / server backup & restore
b) Problem resolution (adding hardware capacity, process & procedure changes, user acceptance, retraining, additional training)
c) Training to manage SLAs with the ERP Implementation Support Vendor

3) Training Calendar

  • Set recurring training budget
  • Plan refresher training program
  • Periodic review of training requirements
  • Set & execute the action plan to fix the users skills level gaps for the proper usage of the ERP system

June 20, 2011

ERP Project - Key Success Factor 9: Data & Approval on Time

Data on Time:

One of the critical requirements for the ERP project effectiveness is the availability & timeliness of right information and this has to be managed throughout ERP implementation project. Information related constraints include finding the right data to load into the system & converting disparate data structures into a single, consistent format before the system usage. Documentation of current & future (required) business processes & data flows is key to design the ERP system and would ensure that the automated ERP system would bring in the complete business process & the desired operational management controls.

An ERP system implementation gives the opportunity to revise & update master (customers, suppliers, general ledger, inventory, technology etc.,) & transaction (quote, order, invoice, receipt, voucher etc.,) data. Data preparation might become a critical challenge for the ERP project. Significant effort for data preparation, entry, migration & validation would be required for collating information from various sources of dispersed data.

Everyone under-estimate the data collection effort & time involved for the same. Enough time need to be allocated to recognize, explain, authorize & replicate all the required information. This is the opportunity for organizations to correct their legacy data.

The entire legacy data need not be converted, as there would be obsolete information in the legacy system. we need to analyze the current data to get rid of the obsolete data & get the right data validated. We need to delete the unwanted information such as data on inactive customers, vendors, inventory etc., Describe the new data that needs to be gathered, recognize the data sources, Collect & segment the data. After the data conversion & entry, it must be checked for correctness.

Legacy system data conversion involves Data field definition in ERP, Map ERP fields to legacy system fields, Convert legacy fields to ERP fields, define data cleansing, Cleanse data & sign off data cleansing. This phase involves converting the data format in the legacy system to suit the data format requirement of the ERP system. Large organizations might take 2-3 calendar months to get the right validated data and this might even drag the ERP project implementation schedule.


Approval on Time:

The implementing organization need to take various decisions during the ERP Project Implementation. Key decisions to be taken by the implementation organization during the ERP project implementation among others include:

  • Project Plan
  • Team structure & Resource allocation
  • Project goals / deliverable & Scope
  • Key requirements (process & data flow) – business & technical
  • Business Process Re-engineering
  • Gaps & Issues
  • Change Management Plan
  • Total Cost of Ownership
  • Data (master & transaction) Conversion & Migration
  • Training – Core team / Business user / IT user
  • Documentation
The implementing organization team along with the implementing vendor team has to take the decisions on the above on time to ensure that the ERP Project is implemented successfully on time to realize the complete ROI benefits.

June 15, 2011

ERP Project - Key Success Factor 8: Scope Creep Management

Scope creep always discomforts the project managers, as business requirements continue to change with respect to the organization business needs, changes in industry & technology and things gained during the development process. Scope - planning, definition, authentication, control - are all the processes that are defined to avoid the scope creep.

Organization should set its business objectives & scope at the start of the ERP project. These goals are to be reviewed for a clear definition & understanding of the business value, the ERP implementation intended to deliver. This would be the benchmark for all the decisions made during the ERP implementation. ERP project road map has to be framed to meet the present & future business objectives of the organization.


It is very tempting to get caught up in the “wish list” (business requirements) of the organization, which might not deliver the intended business value from the ERP project. So it is critical to prioritize the business requirements & goals and implement the ERP accordingly.

The project team should clearly document the critical business processes, keep the focus on them during the ERP implementation project. This can be further broken down into measurable success factors & strategic business accomplishments that would drive the intended results. Today, ERP applications are granular, so that we can implement those functionality / modules, which would immediately meet the organization critical needs. We can then implement the other functionality / modules to manage the less critical needs in priority order.

The project scope defined initially would be a high-level scope. During the project requirement gathering phase, the scope would be defined further in detail. This would be agreed between the customer & vendor and the blue print would be defined including the gap-fit & customization details.

Subsequently, the stakeholders might change their mind on certain business processes, requirements etc., This would impact the project and most often increases the scope, timeline & cost. A proper change request mechanism should be in place to manage this. If the stakeholders are allowed to increase the business requirements frequently, then the scope creep would increase in a big way. Then the project would not be delivered on time & within budget. Any such change would require a formal approval from the project’s steering committee and the project plan including the scope, timeline & cost should be revised accordingly.

Reasons for scope creep to occur include:
  • In-complete documentation of the initial project scope
  • Not having the right project team to determine the actual business requirements
  • No expectation management set between the customer & implementation vendor
  • Lack of change request system
  • Bad communication among project stakeholders
  • Less project control by the project manager
  • Customer used for "freebies" and doesn’t value the project scope / effort / timeline
  • Project Stakeholders having conflicting interest on the project

Ways to manage the scope creep include:
  • Cordial relationship & manage expectation among the stakeholders till the project completion
  • Good initial scoping & planning
  • Get the right project team from the start to determine the actual business requirements (present & future)
  • Firm agreement with the project management structure
  • Proper project requirement documentation with customer acceptance including prioritization
  • Firm compliance to the Change Request System
Scope Management is, one of the most important management tasks a project manager must do. Scope control by applying firm change control system and not accepting any changes to occur in the project without executive acceptance are crucial. Every attempt to make seemingly "small" scope changes, should be avoided unless it is business critical. This would help the project manager to keep the control of the project. However, even the best of the project managers would have at least 5-10% scope creep on their projects. So the project manager should have the necessary skills to work with all the stakeholders to successfully manage the scope creep at the desired levels. At the same time, the project manager has to ensure that he is not looked at by the stakeholders as rigid or bully.

June 14, 2011

ERP Project - Key Success Factor 7: High Communication Standard

Communication is one of the key functions in an ERP Implementation project. It is very critical,to include a comprehensive communication plan, as part of the organizational change management & ERP project planning. This is , to ensure that everyone understand the new ERP system, their role clarity and how it would affect them. Here, everyone refers to internal stakeholders (employees), executive stakeholders (top management) & external stakeholders (customer, vendor etc.,) in an organization.

Internal stakeholder (employees) communication examples for the ERP Project are
  • Frequent project status reporting
  • Role Clarity for all the project team members in terms of the information they have to impart & receive
  • When to impart their current process & business requirements to the vendor
  • When to be trained, to provide the master & transaction data & data migration plan
  • How their business processes & daily tasks would be affected

Executive stakeholder (top management) communication examples for the ERP Project are
  • Frequent project status reporting
  • Major risks identification & their mitigation plan
  • Key Decision to be made

External stakeholder (customer, vendor etc.,) communication examples for the ERP Project are
  • Frequent project status reporting
  • Precautions taken to ensure customer deliveries aren't delayed
  • Requirements / data they need to provide for the project
  • Changes to the ways orders will be processed

Such proactive communications among all the stakeholders would help lessen the curiosity & uncertainty of an ERP Project Implementation. They are important to an effective organizational change & ERP project ROI and should be cautiously planned during the ERP project.

During an ERP Implementation Project, the project manager must communicate frequently to all stakeholders (up & down the organization) the following among other things:
  • Project Objectives, Milestones & Deliverable – Plan vs Actual
  • Project Risks / Constraints & Mitigation Plan
  • Time, Effort & Cost – Budget vs Actual
  • Impact of new ERP system across all the business functions of the implementing organization

Communication management system, include the following among other things:
  • Objectives identification - Identify the information needs of all the ERP project stakeholders
  • Plan development - Communication targets, required information & time intervals
  • Plan execution

The project team members should know what their tasks are and how & when to accomplish them. This would ensure that the ERP project progress is on time within the budget. Also, the project manager can effectively monitor the project progress, only when he knows what the project team members are supposed to do & their actual status. The project manager should be able to communicate both up and down the organization, and command the respect of the software vendor, implementer, and many diverse resources.

Sustaining transparent, precise & frequent communication mediums with all the project stakeholders is important to ensure the smooth project progress. It is important that the communication is clear and consistent. The ERP project implementation would run more smoothly, once all the project stakeholders know what & when to expect from each other.

ERP Project - Key Success Factor 6: Effective Project Management

ERP Implementation project includes all activities required to fully implement the application, process design, requirements gathering, configuration, business & technical testing and end user training.

Lot of ERP implementations have taken longer than expected time and reasons for this among others are:

  • Organizations had unrealistic expectations regarding project timelines
  • Organizations did not account properly all the project implementation activities during the planning phase
  • Many ERP vendors fail to adequately manage client expectations on implementation duration
  • Organizations try to develop an estimate before a plan has been identified
  • Organization’s project plan should also include non-vendor related items such as process & workflow definition, data migration and customization effort to meet unique business requirements.

Normally, the ERP vendor’s Implementation project plan would cover all the activities from the technical perspective. But the following critical steps should also be addressed:

  • Define key business objectives
  • Frame project schedule specific to the implementation project (instead of a standard plan) & cover all the project implementation details by understanding the ERP system & implementing organization requirements
  • Aggregate all the business transformation activities & corresponding resources required for design, testing, training, change management, business process documentation & Integrate it with the technical activities
  • Track the dependencies between the project & business areas involved in the project plan
  • Gather input for resource forecasting & collaboration, track milestone achievement status and align it with the organization’s environment & constraints

An effective project & program management system for an ERP implementation project should take care of mitigating the risks involved in the following tasks:

  • Planning
  • Business process re-engineering (AS-IS, GAP FIT & TO-BE)
  • Implementation of Standard functionality / modules of ERP
  • Planned Customization to take care of the critical requirements (business & technical), which are identified through the Gap-fit analysis
  • Key Integration requirements for legacy systems
  • Resource requirements to execute the change management process
  • Understanding the scale of data conversions & related data cleansing
  • Coordination of business resources for testing & validation of functionality
  • Training users of the ERP system

Most successful ERP implementations have realistic expectations about how much time & effort is required for the project. It is possible to implement ERP technically in a very short time frame. But it may not add the expected business value, especially, when there are not sufficient internal & external resources to support the project. A proper project management office should be in place to ensure that all (business & technical) considerations are recognized for a successful ERP implementation.

The effective project management can resolve the following issues among other things in an ERP Implementation Project:

  • Enable the required level of transparency / visibility to all on the project progress
  • Manage expectations across the organization especially with the project stakeholders
  • Manage the time, effort & cost of all the stakeholders involved while meeting the planned project objectives
  • Escalate early the critical risks with relevant mitigation plans to those responsible to manage such risks
  • Establish clear & strong project structures to be maintained through sustained management support

Expectation management among stakeholders depends on persistently eliminating the misalignment between relevant objectives of all the project stakeholders. It consists of defining, managing & integrating the below processes & provides a sense of common ownership & commitment:

  • Communicate key milestones / deliverable & their target dates to all the stakeholders
  • Overall implementation schedule, effort & cost
  • Process to keep track of the project schedule & measures to gauge the performance

ERP Project Manager – Roles & Responsibilities

  • Provide overall guidance for the project implementation methodology
  • Define & manage project (functional & technical) scope, deliverable, resources & critical delivery dates
  • Develop & maintain project work plan & budget
  • Lead project status meetings
  • Report issues, track project progress & update all the stakeholders
  • Acquire & assign resources required for the project
  • Manage issues resolution & escalate as appropriate
  • Manage the impact of process/system change
  • Anticipate proactively & manage risk areas
  • Motivate, manage, prioritize & assign work to team members
  • Oversee quality assurance review of development including documentation
  • Develop & facilitate project team & end user training plan
  • Develop data migration plan