Minimization of Risks and Enhancing Success Possibilitiesin ERP Projects: Few Ideas

The success or failure of an ERP project is dependent on many a number of factors which come acrossduring its entire life cycle. Almost each and every ERP projects are some way or the other prone to some Risks. The risks are sometimes very much predictable and sometimes they are uncertain and we cannot foresee them in advance. As the time goes and the phases of the project come, new risks may creep into the project. These risks could be due to any sudden changes in the project requirements at any phase of a project or lack of planning in advance from project management side while starting the project. ERP projects themselves are very complex in nature involving a large numbers of modules to be implemented in good number of sites of an organization. It would encapsulate the entire supply chain, manufacturing, finance and HR side of a company involving different processes in different departments to be done by different persons. There could be involvement of good number of manufacturing sites and warehouse locations and corporate offices of a company geographically located at different locations of the world. An early and wise decision on best ERP package selection and implementation strategy followed by a robust project management plan can minimize the risks of a project and subsequently can enhance the possibility of its success. Management), HR(Human Resource), CRP(Conference Room Pilot), UAT(User Acceptance Test), ROI(Return on Investment), TCO (Total Cost of Ownership), RFQ (Request for Quotation), PO (Purchase Order), SOW (Statement of Works) I. Introduction In recent times, many a number of medium and large scale industries are adopting ERP as a software package for the support of their day to day operations. In pre-ERP era there was no integrated system which had a common database platform containing the entire supply chain, Financial, HR data. There were multiple and distinct legacy software which supported for the different activities and operations at different departments of an organization like Marketing, Sales, Purchasing, Manufacturing, Planning, Finance, HR etc. This would have created disjoint communication channels, records, reports etc. from different departments of the company. When ERP came, it brings all the operations and records of the organizations in a single data base with integration between each operation to other. This in turn enhanced the productivity of the organization as a whole and reduces the lead time of each operation. The organizations became lean in nature, which means there were reduction in waste and improvement in cycle time and hence the operating profit of the organizations increased in a nut shell. Although, the ERP as a project to any organization is very complex in nature, as it involves a series of phases with challenges, before it can be implemented and used by any organization. It starts from initiation of the requirement of ERP. The organization needs to first of all decide that their current legacy system has to be replaced by an ERP package. Once the initiation of the requirement is done, there is a phase of selection of proper ERP package from the number of ERP packages available in market. It requires some Cost- Benefit analysis by the top management on which package to choose. Once the package is chosen, there is a process of selecting the proper Consulting vendors who can help in implementing the package in their organization. The consulting company along with the business and IT persons from the implementing company have some kick off meeting and requirement gathering sessions. The AS-IS processes is being studied and TO- BE processes are being designed by the consultants with some FIT-GAP analysis report. Subsequently there are few testing sessions like CRP1, CRP2, UAT etc. These sessions would come out with some defects from the system which are fixed at each and every test phases. Once the testing and development cycles of the ERP package is almost done, the staticdata and open dynamic transactionsareconverted (loaded) into the new ERP system from the old legacy systems. All setup related activities are completed in cut over phase. There are a number of training sessions to the business users on the ERP package in order to make them conversant with the processes in ERP. At this moment the system is ready for Go-Live with its new ERP system in place. Although the entire ERP project life cycle appears to be very simple and straight forward from the processes depicted as above, but each and every phases not only require the involvement of people across the organization but also they require a robust planning and proper communication as well. There are a lot of risks