ERP Implementation Process

This study seeks to explore the relationship, if any, between ERP implementation and enterprise structure via the ERP implementation process.

The implementation of an ERP system is usually a major strategic change initiative for any organisation. It commands the commitment of a significant level of resources and management effort (Moon, 2007). Being part of an enterprise wide project, the implementation has the potential to be disruptive to the on-going operations of the organisation or wider “enterprise”. In the case of the enterprise-then managing disruptions across organisational boundaries gives an added importance.

The implementation process (see Table 2-3 below) is one of several phases along the ERP life-cycle (Esteves and Pastor, 2001). These phases or stages include the:

Phase Sub Phase Main Outcome

A Selection Adoption decision Recognising a strategic need for a new system

Acquisition Search and selection of an appropriate system given the requirement of the enterprise and the objectives of the system

B Implementation Implementation The key activity of enabling the system for use by the enterprise

Utilization The operationalisation of the system, using it to derive benefits for the enterprise with minimum

“down-time”

C

Post-Implementation

Evolution Expanding and extending the capabilities of the system to cover both additional decision making areas and additional business areas. This covers the

Phase Sub Phase Main Outcome

transition from ERP to ES

Retirement Covering the necessary divestment and decommissioning of any “tool” that becomes superseded by new technology or business needs such that further utilization or evolution becomes uneconomic

Table 2-3 - ERP implementation phases.

From experience, this author has found that irrespective of the particular implementation methodology adopted for an ERP implementation project, there are generically identifiable stages involved in most implementations:

Project Planning

Business and Operational Analysis (also known as Current State Analysis or AS-IS Analysis)

Business Process Design (sometimes known as Business Process Reengineering or BPR)

Software Installation and Configuration

Project Team Training

Business Requirements Analysis and mapping to software (also known as Requirements Engineering)

Module Configuration

Gap Analysis

Solution Design

Conference Room Pilot

Design, Development and Testing of Customisations and Extensions

Design, Development and Testing of Interfaces and Reports

Future State Process Definition (or TO-BE specification)

Data Conversion

Design and Development of custom and role targeted documentation

End User Training

User Acceptance Testing

Transition planning

Go-Live (Production)

Post-Implementation audit and support

Within that framework, there are further considerations for project planning:

Project initiation – definition, scope, budgeting, risk assessment

Project resourcing – outsource, in-house, mix

Project documentation – standards and authorization

Project control and management – Project Management Methodology e.g. Prince II

Project communication – meetings, briefings

As regards selection, Everdingen et al (2000) quotes surveys that identify that the most important criteria in selecting an ERP System is the degree of “fit” between the current business procedures of the enterprise and the ERP system selected for implementation.

However, in this researcher’s experience, this presupposes that the organisation intends to stand still until the system is implemented, which is unlikely to be the case. It is more likely that the system will continually have to play “catch up”, hence the need for on-going IS technical support.

Taking “fit” as an important factor to consider in the implementation process, though not necessarily with current processes, a key consideration of the actual implementation is what to do in the instance where there is misalignment between the application being implemented and the intended (by design) structure of the target enterprise. The options invariably involve either customising the ERP system or adapting business processes to work with the system “out of the box”; a vanilla implementation.

Following much consideration in the ERP market, two principle vendors have emerged as the mainstream purveyors of these systems: Oracle and SAP. Both organisations have their own methodology for the implementation of their systems; in Oracle's case this methodology

(Table 2-4 and Figure 2-1 below) is called AIM Advantage – otherwise known as Application Implementation Method (AIM)⁵ Advantage, whilst the SAP methodology is called MySAP.

AIM comprises six phases, and as at the time of writing, eleven processes. The processes are designed to “group related deliverables together” thus implementing them within a phase as appropriate. Consequently, not all processes are applicable to all six phases, Oracle Corporation (1999). SAP’s MySAP follows broadly similar phases of; Project Preparation, Business Blueprint, Realization, Final Preparation and Go Live & Support and is supported by a role based by access to tools and resources that are related to the implementation task in hand. Other ERP system vendors such as Microsoft Dynamics (formerly Microsoft Business Solutions) and Infor Global Solutions tend to adopt similar implementation and integration methodologies that are optimised for their specific products and customers. The larger ERP vendors also offer industry specific solutions that ensure the integration and implementation effort caters for the specific needs of certain major industries; such as; Construction, Distribution & Logistics, Education, Financial services, Government and public sector, Healthcare and pharmaceuticals, Manufacturing, Not for profit (e.g. Charities), Professional services, Retail and so on.

Process\Phase Definition Operational Analysis

Solution Design Build Transition Production

Business Process

Business Requirements

Business Mapping

Architecture

5 The latest version of AIM is now known as Oracle Unified Method (OUM), to incorporate the best implementation practices from Oracle Inc.’s recent acquisitions such as the PeopleSoft and JD Edwards ERP systems.

Process\Phase Definition Operational Analysis

Solution Design Build Transition Production

Design and

Build

Conversion

Documentation

Testing

Migration

Table 2-4 - Oracle's Application Implementation Methodology

Figure 2-1 – Oracle Corp AIM Flow