Erp implementation lifecycle

ERP Implementation Lifecycle
Project Preparation, Initial Costing, Requirement Engineering, ERP Solution Selection, Technical Planning, Change Management and Training Plan, Implementation and Deployment Planning, Configuration, Custom Coding, Go-live

1. Enterprise Resource Planning

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Topics Covered: ERP Implementation Lifecycle
Project Preparation, Initial Costing, Requirement Engineering, ERP Solution Selection,
Technical Planning, Change Management and Training Plan, Implementation and Deployment
Planning, Configuration, Custom Coding, Final Preparation, Go-live
ERP Implementation Life Cycle
ERP implementation life cycle is the process of deploying enterprise resource planning
software—from planning through go-live and beyond. The typical implementation cycle is six to
12 months. But don’t think it’s all about software. Make sure you’re prepared for these eight
stages of ERP implementation.
One question that always comes up very early in the process when considering an ERP
implementation is “How long will it take?” While there is no general answer to that question –
ERP implementations proceed at their own pace – the process can be outlined by way of a
timeline or life cycle. Just for perspective, an ERP implementation can take anywhere from a few
months to several years, with the majority ranging from six-to-12 months from kick-off (project
planned and funded, team organized and ready to go, ERP technology and ERP system software
delivered – if appropriate – and installed) to a live system in full operation.
However long ERP implementations take, the result is the use of cloud-based ERP technology
that makes end users’ jobs easier, efficient, and effective. And advanced understanding of the life
cycle phases gives you a head start on experiencing a successful ERP implementation.
The 8 of the ERP implementation life cycle
Planning and organization – In this commentary, we’re not counting this phase as part of the
time it takes to implement the system as it all occurs before the start of spending money or real
physical activity. Nevertheless, a team can be assembled and a decent plan developed in a matter
of a few weeks, for a motivated company. More typically, the planning stage might last up to six
months or more.
System selection and installation – Selecting the ERP system software and ERP technology can
be a challenging endeavor, given its importance to the project and the vast array of choices. From
requirements definition and early market surveys through determining the “short list”, gathering
proposals, holding demonstrations, final selection and negotiation, this phase typically consumes
anywhere from 3-to-6 months.
Installation – Sometimes there is a lead time for delivery of hardware and software, installation
of infrastructure components like networking facilities and data collection / display devices, and
installation of software that could be anywhere from several days to several weeks or more.
Cloud-based ERP may have little or no installation lead time and no software installation
requirements.
Data conversion and loading – Once the ERP technology and ERP system software is ready,
data must be entered and/or moved into the system’s database. This includes “basic records” like
customer, vendor and item master files, bills of material, production facilities and routings,
general ledger chart of accounts, and the like. Just before going live, active transactional data is
converted or transactional activity is transitioned into the new ERP system software. Some of
this activity can be completed in parallel with other tasks like training and validation. IT

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resources and consultants/contractors can primarily accomplish some of this activity, as well.
While a significant amount of time and effort is required, this requirement will not add
significantly to the implementation timeline.
User training and procedure development – This is arguably the most important part of ERP
implementations; procedure development (and documentation) and user training should take up
the majority of the timeline. These requirements consume considerable time and effort from
operational employees (actual future users of the system) who are also expected to do their
existing jobs at the same time. The duration of this phase depends on the size and complexity of
the ERP system software being implemented (number of modules or functional areas involved,
number of users, how different the new procedures will be from existing procedures), and how
much time users can dedicate to the implementation each day or week. Some companies bring in
temporary help but these outside resources should be devoted to maintaining old procedures
rather than working on the implementation per se.
Testing and validation – IT resources will be heavily involved in this task, working with the
users to compare and examine both basic records and transactional data to verify that the data is
exactly as it should be (and at least as accurate as in the incumbent system) and that the new ERP
system software is producing the expected results. Testing and validation occurs over an
extended period as each functional area loads data and starts processing (test) transactions by the
users during training and procedure development. This is not necessarily parallel operation; in
most cases, it is more of a “pilot” testing situation. Testing and validation do not add much to the
timeline explicitly but must be considered in planning the duration of the training and procedure
development process.
Cut-over and “go live” – This can be instantaneous (sometimes called a ‘big bang’ approach),
phased in piece-by-piece, or parallel operation where users are expected to keep the old system
and the new system in operation simultaneously for a specified period of time (typically one or
two accounting periods). You will find a discussion of these alternative strategies here .
Follow-through and project completion – Implementation is not complete once the new
system is ‘live’ and the old system is turned off. Users and technical support resources must
continue to validate and verify proper operation; user training should continue to enable a more
extensive use of what the ERP system software has to offer and expand the benefits of the
system.
ERP technology represents a continuing opportunity to improve performance.
Whatever your industry, from medical manufacturing to high tech and electronics, an Enterprise
Resource Planning (ERP) system can streamline your workflow, facilitate better communication
across departments and production centers, keep your company flexible and adaptable, and much
more.
To reap all the benefits of ERP, it’s important to understand the ERP project lifecycle. By
understanding and following this process, you will be in a better position to get your ERP system
running on time and within budget. In addition, you will be able to ensure you have the right
skillsets each step of the way.

ERP Project Lifecycle:

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While ERP vendors frame the project lifecycle differently, they all include these phases, even if
they are named differently:
• Prepare
• Plan
• Design and Build
• Validate
• Deploy
Each step has particular tools, techniques, and deliverables to seamlessly take the project from
one stage to next. Implementing an ERP system is a complex project, but ultimately, following
the project lifecycle keeps it on track and ensures a high-quality ERP system, free of bugs and
well-suited to your company’s needs.
Prepare
In the first stage, your company maps its expectations and needs for an ERP product. This
includes considerations such as:
• Software functionality
• Implementation perspectives and cost
• Project schedule
• Post-launch support
By considering each of these factors, you will be able to find the appropriate ERP product for
your company.
Plan
This is where you take the requirements set out in the prepare stage and figure out the nitty-gritty
of how you’re going to make it happen. With your project manager, you’ll finalize your project
goals, objectives, and scope, putting it all into a project management plan. This plan outlines
each team member’s responsibilities and sets clear timelines.
By taking the time to put in place a clear plan, you will minimize risk by being able to identify
any snags that might exist, and crafting specific checkpoints to address any issues that come up
throughout the implementation.
Design and Build
With the project plan in hand, the designing begins. At CTND, while we’re designing the
product, we teach your team the basics through one-on-one meetings and on-site training. During
the configuration, your team members document the user procedures themselves, ensuring that
they understand the software and that the appropriate configurations are made to best fit your
organization.
In the final step of this phase, we validate your newly-converted data for accuracy and test it to
make sure it meets your goals.

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Validate
After double-checking every business procedure is properly documented, specific test scripts are
deployed to ensure that the system is properly configured. This is where any bugs or issues that
couldn’t be tested in earlier phases are found and addressed.
After the validation stage is through and everything is working, it’s the last and most exciting
phase: deployment.
Deploy
For peace of mind, a detailed launch plan minimizes any issues that come up following the
launch, and users are prepared for everything needed to launch successfully and troubleshoot any
hiccups.
Then it’s time to launch!
That’s not the end of the ERP project lifecycle, however. Over time, as you continue to use the
ERP software, you may find your company’s needs change. Customizations to the ERP system
could lead you right back to the planning stage to tweak and adjust your ERP system.



Initial Costing:
Many companies began using enterprise resource planning (ERP) systems rather than
accounting software applications.
An ERP system differs from accounting systems in that accounting systems only
perform accounting-related tasks. An ERP system, however, can handle not only
accounting tasks, general business management tasks as well.

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Overall, it's a more powerful platform.
An ERP system is essentially a suite of software packages that can perform accounting,
product planning and development, manufacturing, inventory management, sales
management, human resources, and other business tasks.
Like the costs of an accounting system, you will want to consider not only the licensing
fees when choosing an ERP system but the total costs of the ERP system itself:
1. Implementation
2. Training
3. Development for Customization
4. Process Redesign
5. Maintenance
6. Upgrades
7. Support
Cost 1: Implementation
It's necessary to have professionals install and configure your ERP system, so you will need to
include these implementation costs in the total price of the ERP system. ERP systems are
complex software applications, so you will likely need to change operating systems, upgrade or
change servers, and change other hardware and software you use on your company’s network in
order for the ERP system to run properly.
Cost 2: Training
As mentioned, an ERP system is a complex software application that can be thought of as a suite
of software programs that are simultaneously compatible. Your employees will need training on
how to use the programs, because an ERP system is not as intuitive or easy-to-use like a basic
accounting software program, such as QuickBooks or Peachtree.
Cost 3: Development for Customization
The out-of-the-box functionality of an ERP system will not be enough for you to operate your
business effectively. You will need to incur some expense in developing customized reports so
that your employees can perform their daily and monthly tasks with ease. An ERP system can
store a substantial amount of information, but users are limited in the ways that they can access
the information. Therefore, it is not uncommon to have IT staff dedicated to developing
customized reports for various departments so that business processes and analysis can be
performed timely.
Cost 4: Process Redesign
If your company is upgrading from an accounting software program to an ERP system, then you
will certainly have a lot of processes that will need to be redesigned. For companies using
accounting software, many tasks may be performed outside the software either manually in a
paper format or a third party application such as MS Excel. The acquisition of an ERP system
should, in theory, mean that many of these tasks are being automated by the software to increase
both accuracy and efficiency in performing these tasks. Even if your company is changing ERP

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systems, no two are alike so you can expect to have some changes in your company’s business
processes to coincide with the software’s processes.
Cost 5: Maintenance
You will need to maintain your ERP system so you will need to factor in these costs. ERP costs
can include hardware, network, and labor costs from IT and other departments to ensure the
system can run properly. Maintenance costs for an ERP system typically run between 15–20% of
the initial purchase price.
Cost 6: Upgrades
Like all software programs, ERP systems require periodic upgrades to avoid becoming obsolete.
You should consider how often you expect to upgrade your ERP system, and what these costs
will be when you go through with the upgrade. You should also consider that any upgrade may
affect business processes, and require additional hardware or software so the system runs
smoothly, if you're business is not run on a mirrored set-up while performing the updates or data
transfer.
Cost 7: Support
Your employees will run into trouble using the program, and you will detect numerous bugs with
any ERP system so you will want to ensure that your vendor will provide you with adequate
technical support to resolve these issues. You should ask your vendor if this support is included
in the licensing feeor is an additional cost, as tech support can end up affecting your bottom line
if not included in the initial purchase, and isn't closely monitored.
Requirement Engineering
Requirement Engineering is the process of defining, documenting and maintaining the
requirements. It is a process of gathering and defining service provided by the system.
Requirements Engineering Process consists of the following main activities:
• Requirements elicitation
• Requirements specification
• Requirements verification and validation
• Requirements management
Requirements Elicitation:
It is related to the various ways used to gain knowledge about the project domain and
requirements. The various sources of domain knowledge include customers, business manuals,
the existing software of same type, standards and other stakeholders of the project.
The techniques used for requirements elicitation include interviews, brainstorming, task analysis,
Delphi technique, prototyping, etc. Some of these are discussed here. Elicitation does not
produce formal models of the requirements understood. Instead, it widens the knowledge domain
of the analyst and thus helps in providing input to the next stage.
Requirements specification:
This activity is used to produce formal software requirement models. All the requirements
including the functional as well as the non-functional requirements and the constraints are
specified by these models in totality. During specification, more knowledge about the problem
may be required which can again trigger the elicitation process.

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The models used at this stage include ER diagrams, data flow diagrams(DFDs), function
decomposition diagrams(FDDs), data dictionaries, etc.
Requirements verification and validation:
Verification: It refers to the set of tasks that ensure that software correctly implements a specific
function.
Validation: It refers to a different set of tasks that ensure that the software that has been built is
traceable to customer requirements.
If requirements are not validated, errors in the requirements definitions would propagate to the
successive stages resulting in a lot of modification and rework.
The main steps for this process include:
• The requirements should be consistent with all the other requirements i.e; no two
requirements should conflict with each other.
• The requirements should be complete in every sense.
• The requirements should be practically achievable.
Reviews, buddy checks, making test cases, etc. are some of the methods used for this.
Requirements management:
Requirement management is the process of analyzing, documenting, tracking, prioritizing and
agreeing on the requirement and controlling the communication to relevant stakeholders. This
stage takes care of the changing nature of requirements. It should be ensured that the SRS is as
modifiable as possible so as to incorporate changes in requirements specified by the end users at
later stages too. Being able to modify the software as per requirements in a systematic and
controlled manner in an extremely important part of the requirements engineering process.

ERP Solution Selection
A good enterprise resource planning (ERP) system should have an impact on every single part of
your business. These highly sought after enterprise applications help manage activities including
planning, research and development, purchasing, supply chain management, sales, and
marketing. There are countless ERP software solutions available, so it’s crucial that you make
the right ERP choice that fits your organization.
Consider the following factors when you’re ready to compare ERP or are actively performing
your ERP software selection process:
• Whether the ERP solution is turnkey or will be customized to your organization and
unique business processes
• Whether the solution can meet the technical needs of your organization
• If the solution is scalable, able to adapt in response to growing users or increases in data
• The speed of the product and its impact on the end users
• Possible support for multisite or multi-company environments if you need to work with
multiple operations
Technical Planning
There are many ways an Enterprise Resource Planning (ERP) implementation process can be
troublesome, costly and frustrating, but by trying to adhere to some ground rules the whole
process can be pushed in the general direction of success.

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1. Understand your incumbent system
The decision to purchase a new ERP system has been made, but why? There are many
reasons a new ERP system will be sourced, but it is important to understand that the
implementation of a new ERP system will not simply create a return on investment or
solve the issues of the business. These come from the process improvements; the ERP
system is a tool and improving the way a business uses the tool can reap benefits.
2. Homework & Collaboration
Once a business has come up with clear defined goals that the new ERP system must
achieve and defined some tangible metrics to judge success then the next step is to find
the right product and the right vendor.
3. Budget Control
To be able to control a budget you need as a business to identify the real costs of ERP.
These costs can include hardware, training, organizational change management,
developments, staff cover for project members and the software. The identification of a
clearly defined budget scope is critical and difficult. The ERP supplier can provide a
scope of services and a software and hardware budget, but this is not the entire budget.
The first question to clarify is what is “not” included in the budget. This can traditionally
be data migration, modification work and attendance contingency. These elements will be
unknown at the start of the project, but should be estimated because they are critical to
avoid significant budget creep.
4. Resources and Team
Implementing an ERP project requires an internal project manager and team. Whilst the
majority of businesses try to achieve this by assigning these roles to key members of the
business and making them continue to do the day-to-day work that has made them key, it
is ultimately a struggle and causes issues with the project and the business.
5. Training and Understanding – User Acceptance
There are many philosophies on how best to train staff, but the simple rule to follow is to
actually train the staff. During implementations there are many methods of training, but
before any of this can really commence the software must be understood by the business,
and the business must be understood by the ERP partner.
6. Data Migration
The common response to the question “What data from your current system do you want
migrating to your new system?” is “Everything”. Whilst this is possible, it would
probably cost more and take more time than the current ERP project being undertaken.
7. Go Live perpetually
At the end of months and months, or even years and years, the business and the team will
finally manage to drag themselves across the finish line. The business has made it, at last!
That is it, the project is completed, there is relief all around as people can now
concentrate on their day jobs. Simply put the answer to this is “NO”.
Change Management and Training Plan
Change is the law of life and resistance to change is the truth. To balance both these aspects,
change management is essential. Implementing ERP in your organization implies change and
there is bound to be some resistance.

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To manage the change, it is essential to have a change management strategy that will ensure a
smooth transition throughout the organization. Change management works on the relationship
between people, processes, and systems. It ensures people understand the business process
change and accept and use the new system.
So the importance of change management in ERP implementation cannot be undermined. There
are three steps for effective change management.
1. Communication
Communication is important because people cannot accept what they do not understand. Early,
frequent, and progressive communication much before the ERP system is implemented should
explain the need for change. Employees need to know the reasons for adopting the new ERP
system and how it will help the organization. They need to be educated on the features of the
new system and how it will benefit them.
2. Stakeholder Analysis
This step will define who will be affected by the ERP implementation. Analysis will help know
the level of involvement of each stakeholder and will determine the amount of training they will
require.
This analysis will help document the roles and responsibilities of each stakeholder. The roles
that will be defined at this stage are:
• Leader – Provides direction and alignment
• Super Users – SMEs within departments, understand the business process of their
departments
• Power Users – Users with advanced knowledge of certain applications who will monitor
the day-to-day transactions of end users
• End Users – Everyone who uses the system, they feed the system with data
3. End User Training
Training employees on skills and knowledge is necessary to execute the ERP system. Training
must be customized for each process in the organization so that the users understand how
relevant it is to them.
Training requires an investment of time, money, and effort, but the results are worth it because it
will help employees learn about their roles, and consequently reduce their resistance to the
change. In fact, a report on how top organizations deploy ERP training by The Aberdeen Group
published in 2014 says that Best-in Class organizations (top 20% of companies based on
performance) are likely to combine ERP training with day-to-day business processes so that they
learn as they work.
Implementation and Deployment Planning

Implementation: ERP's scope usually implies significant changes to staff work processes and
practices. Generally, three types of services are available to help implement such changes—
consulting, customization, and support. Implementation time depends on business size, number

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of modules, customization, the scope of process changes, and the readiness of the customer to
take ownership for the project. Modular ERP systems can be implemented in stages. The typical
project for a large enterprise takes about 14 months and requires around 150 consultants. Small
projects can require months; multinational and other large implementations can take
years. Customization can substantially increase implementation times.
Besides that, information processing influences various business functions e.g. some large
corporations like Wal-Mart use a just in time inventory system. This reduces inventory storage
and increases delivery efficiency, and requires up-to-date data. Before 2014, Walmart used a
system called Inforem developed by IBM to manage replenishment.
Deployment: The project team and implementation team will assess the situation and make the
final go or no-go decision. Prior to going live, the final data will be loaded and validated. The
project team will train other employees who will then start working in the new system, and
completely stop using the old one.
Configuration
ERP configuration and customization work in conjunction with one another, but there is a subtle
difference between the two. ERP configuration deals with system components but not to your
business process needs. Configuring your system components allows them to work within a
given environment, which includes language, currencies, time zones, and more. Customization,
on the other hand, operates specifically to suit the needs of your business. This can include
anything from adjusting views and screens to changing the information that is displayed for a
given group.
ERP configuration is one of the most crucial steps in your implementation process. Part of what
makes ERP systems effective with improving productivity and efficiencies within an
organization is that it’s not a one size fits all product. For every organization, ERP software will
function differently to best meet your company’s own data, parameters, fields and workflow in
order to ensure that your employees are receiving and sharing accurate information with one
another.


Go-live

Go-live is the time at which something becomes available for use. In software development, for
example, go-live is the point at which code moves from the test environment to the production
environment. As a verb, go-live means to make such an event happen.
At the time of the go-live, a system is officially and formally available to users who can then
initiate transactions in the new system. In enterprise circles, the term go-live is particularly
associated with systems that help manage business functions such as ERP, CRM, or HCM,
financial, logistics or marketing systems.
Although large-scale on-premises ERP system implementation is falling out of fashion in favor
of standalone systems and cloud-based delivery, the go-live becomes no less important. To avoid
failure, a go-live for a smaller implementation will still need excellent project management to
ensure success.