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ENTERPRISE RESOURCE PLANNING

Assignment 1

Submitted by -
Rashika Kapoor
Yashi Gera
ENTERPRISE RESOURCE PLANNING

ERP or ENTERPRISE RESOURCE PLANNING is a software that is used to integrate


various departments of the organization. This integration of departments happens by
making it easy to add data and by making the data visible across all departments.

ERP systems act as a central platform and make decision making easier and more
efficient. The software’s primary function is to share data across all the departments
within an organization and in return streamline the business processes and decision in the
organization. ERP is a real-time software and the UI is the same across all modules of it.

The ERP system must align with the company working, company processes and should
aim at making the processes more simple and effective. The ERP software should solve
some purpose so as to make sure that the whole troublesome process of implementing a
change in the organization is worth it.

Implementing A Successful ERP Software

Despite being such a wholesome software, research shows that 75% of ERP systems fail.
In order to be able to successfully implement an ERP software in a business, a need for
the system must be identified and a thorough feasibility study must be carried out. One of
the important parts of the initial research is CSF. CSF stands for critical success factor.
CSFs are operations that are critical to the successful implementation of an ERP. These
are generally a limited number of constraints that have an impact on the implementation
of the system. CSFs must be done right to make sure that the desired results are
achieved by the business.

The existing system of the company is known as the legacy system. This contains a lot of
important existing data which is critical to the organization and that data must be
preserved. Preservation of this data and the mere existence of this data makes legacy
systems a CSF. So preserving this data is essential and the ERP software must do that.
NO ERP software will fit the needs of the business like a glove and thus the need to
customize ERP software arises. The company must identify the most suitable ERP
software available in the market and customize it according to business needs and the
existing system.

Another very important factor in the implementation of ERP is training. Enough time must
be given to the people to get used to the software, to learn the software and to fully
accept the software. For this, training programs must be held in the organization even
before the implementation of the ERP.

The new ERP system must fulfill the current and future business demands to be
successful in the long run. There should be enough scope for future customizations.

ERP Cloud

This type of ERP software is hosted on a cloud computing platform, rather than on the
organization’s own data center. This type of ERP system uses the internet and thus
increases accessibility of the software and makes it possible for the system to be Real-
time, keep a backup etc.

One of the biggest challenges to these kinds of systems is providing security. As we go


online with the data, security breaches become easier and more common. Keeping
security up to date may also demand more money and also a lot more attention to the
software post setting up.

Cloud ERP software is suitable majorly for small and medium-sized businesses because
as the organizations become larger gaps may occur and complexities may occur as some
cloud applications will have to move across third-party products.

Examples of cloud-based ERP vendors-

1. Acumeatica
2. Deltek
3. Epicor
4. Oracle
5. Microsoft Dynamics
6. Rootstock Software
7. Sage
8. SAP

ERP In The Garment Industry

The system is an extension to MRP software that automates the process of keeping a
manufacturing line supplied with material to meet incoming orders. ERP provides a
platform to activities including manufacturing, financials, human resources and other
modules that can automate the back end of the business.

This software intends to make the flow of information within the organization easier and
more dynamic and real-time, increasing the usability of the information. This makes IT
systems more flexible and more relevant. The departments come closer and more
interrelated. It also eliminates the redundancy of the information. It seeks to streamline
the processes, data flow and decision making within an organization.

It is a high-end solution, it is very expensive to implement initially, therefore, pros and


cons of implementation must be clearly weighed and an informed decision must be made
keeping in mind the needs and the size of the organization. The great number of failures
of ERP solutions must also be taken into consideration.

A lot of garment manufacturing companies are going in for ERP systems and much more
growth is expected as companies try to get a competitive advantage.

Benefits -

1.Improved coordination across departments

2.Increased efficiency of doing business

3.Facilitate day-to-day management

4.Support resource planning

5.Single point entry-data

6.Everyone has the same data- reduces miscommunication

7.Immediate information to everyone

8.Transparency in the system

5 Steps To Successful Implementation Of ERP

1. Strategic Planning
- project team assignment

- Examining current organizational trends of business and information flow

- Set goals and objectives

- Develop a plan

Project team- the team must consist of people from the various departments of the
organization. Each team member must be highly motivated and must be committed to the
success of the project. The team members must be responsible for what they do and the
results that come. The members of the team must be inclusive, from top managers to
lower employees everyone must be included.

Examine current organizational trends- have the team perform a thorough analysis of
organizational trends and information flow. It is important to be able to figure out the
areas of improvement and to find ways to improve. Being thorough with the organizational
processes can help achieve that. This form the foundation for improvement.

Set goals and objectives- after examining the current system and finding the
shortcomings of it, clear objectives must be specified prior to implementing the ERP
solution. The scope of implementation of ERP must be specified and should be all-
inclusive.

Develop a plan- a project plan must be developed by the team based on the previously
defined goals and objectives. After the process of planning is done, each team member
gets a ‘to- do’ list.

2. Procedure Review
- review software capabilities

- Identify manual processes

- Develop standard operating procedures

Review software capabilities- this involves training the members of the organization on
the capabilities of the ERP software and identify gaps in the software from the team. 3-5
days should be given to the team to review the software. And after identifying the gaps,
modifications needed should be made.

Identify manual processes- segregate manual and automated processes.

Develop SOPs- documented SOPs must be created for every aspect of the business. The
document must be updated as the SOPs change.

3. Data Collection & Clean Up


- convert data

- collect new data

- review all data input

- Clean up data

Convert data- convert all the relevant data. Not all the data may be needed or is capable
of being converted since it may be outdated or irrelevant.

Collect new data- Collect the data that may not be present and of which need is identified
during the conversion process. This new data must be collected from relevant sources
and must be analyzed properly.

Review all data input- the collected and converted data must be reviewed for
completeness and accuracy.

Data clean up- Review and weed out information from the collected and converted data.
This will help increase the accuracy and not take up unnecessary space.

4. Training And Testing


- Pre-test the database

- Verify testing

- Train the trainer

- Perform final testing

Pre-test database- the team should test the database for any shortcomings before
implementation. The accuracy and working of the system must be tested. All the issues
must be resolved.

Verify testing- Make sure that the system is in tandem with the SOPs determined earlier,
and whether modifications are needed.

Train the trainer- Assign team members to train the other people in the organization. This
is much more cost effective. Additional tools must be provided along with the formal
documentation. Refresher training is also a very good idea.

Final testing- the project team must do the final testing post training for any issues that
emerged while training or to make the adjustments. Complete and thorough testing is a
must.

5. Go Live and Evaluation


- develop a final “go- live” checklist

- Evaluate the solution

Final go-live checklist- this list includes everything that the ERP system must have before
it is implemented.

Evaluate the solution- develop a structured plan for evaluation which ties back to the
goals and objectives that were set earlier. A post-implementation audit must be
performed regularly. Benchmarking can help in the evaluation process. Regular
maintenance must also be done to keep the software up to date with the demands of the
organization.

ERP Roll Out Strategies

Successful ERP roll out strategies forms the base for successful ERP implementations.
Defining and identifying the right ERP rollout strategy is crucial to the implementation of
the system.

ERP Roll Out


strategies

Big Bang Phased rollout Parallel rollout Hybrid


approach approach

The BIG BANG approach can save organizations time and money. In this approach, the
whole system is implemented in one go all over the organization. The major drawback is
that if a failure occurs, all departments are affected. There is no scope for testing

In the case of PHASED ROLLOUTS, the organizations can realize the pros and cons
sooner. It provides testing and scope for improvement. This process is less risky but more
time-consuming. This is a less risky way of implementing ERP.

PARALLEL ROLL OUTS are best done in test modes. In this, new data is tested against
old data and the results are compared. This is done before going live.

HYBRID APPROACHES are more common in large ERP implementations. These are
basically multiple business units. In a typical hybrid implementation, organizations can
mix and match the Big Bang approach and Phased rollouts.

Disadvantages of ERP-

Throughout the document, the benefits and advantages of ERP are mentioned multiple
times. There are also a few disadvantages of the system, which are-

1. Installation is very costly

2. Success is not guaranteed and depends a lot on the people in the organization

3. Departments might not want to share information internally also

4. Can be difficult to use

5. Change of people requires training the new people again

Therefore, before implementing an ERP system, one must weigh the advantages against
the disadvantages. An informed decision is a must.

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