Lessons Learned from ERP Engagements

Let’s start with “What is ERP?” Enterprise Resource Planning (ERP) software is a set of applications that automate finance, supply change management and human resources departments and help organizations handle jobs such as order processing, hiring and ordering supplies, etc….

Why Implement an ERP System?
  • Customer Service:  As the market place for your solutions, products and services becomes increasingly competitive, your competition is constantly adapting their legacy systems to meet new requirements imposed by customers.  If you want to stay competitive, you too must
    adapt.
  • Legacy Systems:  Review your legacy systems, are they over 15 years old and based on outdated design concepts and platforms.
  • E-Commerce:  To compete in the new global market place, all organizations must adapt to the new requirement of doing business in the electronic forum.
  • Enhanced Internal controls:  ERP systems offer the ability to enhance and make an organization operate more efficiently while reducing the risk of fraud.
  • Increased Productivity:  ERP systems increase productivity by automating many manual tasks, thus allowing employees to perform more productive tasks.
Lesson 1:  Have Executive Sponsorship for the project and buy-in all the way down the business process chain.

The implementation process will affect all levels of the organization. If you do not have buy-in from all levels of management you will run into problems managing the project, especially in the area of resources.

End users must understand that during the implementation process there will be a level of decreased support on the legacy systems while additional requirements will be placed on them for design and testing of the new system.

It is especially important to understand that the end users will ultimately be responsible for the ERP system, and in order to meet all their requirements, they must make themselves available during the implementation process.

Lesson 2: Plan the project team infrastructure carefully. There are two main methods of project team creation.

Functional teams which are responsible for all design, development and testing with a separate Technical team which will be responsible for Infrastructure, Data conversion, Interfaces, Reporting….

Technical and functional team members are integrated into the same teams. This approach has the functional teams responsible for most of the technical team functions above and leaves the infrastructure planning, development and deployment to the infrastructure team.

Lesson 3: You never have enough Horse Power for Development

Most development require separate databases up and running concurrently, thus the load being placed on development server is far greater than the load that will be on a production server.

Your development environments become your production support environments, which are just as important to your operations as the true production systems.

Lesson 4: Double the amount of Disk space you think you will require

The Phrase “Disk is Cheap” is misleading.  Prepare a detailed analysis of expected disk requirements.  ERP systems often have several thousand tables in their databases and disk space has a way of getting used up very quickly, especially during conversions and testing. Prepare your budgets so you do not have to go back to executive management for more money!

Lesson 5: Everyone Customizes

No “off the shelf” software package will meet everyone’s requirements. All ERP customers will be forced to customize the software in some way or another.

Modularize your customizations.  If you customize the application outside of the core system you will have a much easier time during the upgrade process down the road.  Most healthcare organization build custom Time and Labor solutions (typically one of the leading Scheduling vendors) which bridge the HR and Financial databases. This custom solution houses most customizations. Plan for the upgrade in the future, so you will not have to analyze all the code in the system to see which programs are affected

Lesson 6: Document Everything

Version Control is only the first step in documenting changes made to the system.  Be sure to document all aspects of the fit-gap analysis and how those requirements are fulfilled in the system design process.  Have the end-user sign-off on the proposed solution and the functionality of the solution once it is ready for testing. Remember the end users are your customers.

Lesson 7: Develop Detailed Work Plans and update them on a regular basis

Work Plans are the most important tool of project management. Spend some time having your “team leads” preparing detailed work plans for the life of the project.  These will be the only tool you have to track performance of the implementation team vs. expectations.

These plans must be very detailed and include every task that can be identified.  Each task must have due dates assigned, estimated times to complete and resources assigned to them.

Lesson 8: Full Disclosure

All issues that arise on the project must be fully disclosed to the project management and the appropriate levels of management within the organization.

Human nature is to hide the bad things from other people.  On an ERP implementation like any other project, full disclosure of all issues and resolutions is imperative.  Make sure you have an open line of communications with your team leads and team members and that they feel comfortable talking about issues.  It is very simple for a project to fail or run over budget because issues that were encountered were not addressed timely, thus causing delays in other areas of the project.

Lesson 9: Keep Channels of Communications Open

Make sure all teams are in constant communication with each other. Even though they may be working side-by-side, they may not be communicating effectively.  ERP systems are very integrated and changes to one module will affect other modules as well.

Have Cross Team meetings at least once a week where all the Team Leads come together to discuss issues and share ideas relating to the project. This is especially important in implementations where the teams are not located in the same facility.

Integrate the end users in every decision.  They will own the system when the project is completed.

Lesson 10: Do not wait to train the end users until the end!

Training of the end users should be an ongoing process throughout the project. Training starts with the first GAP analysis and never ends.

The conference room pilot is often the first exposure end users have to the new system. This should be the beginning of the training process.  Do not leave training to the team leads. Training should be its own team.

Lesson 11: Understand Critical Success Factors
  • Commitment from top management to “make it happen in ERP”
  • Clear definition and agreement on business and reporting requirements to be implemented in the ERP
  • Clear definition and agreement on organizational structures to be implemented in the ERP
  • Willingness to adjust expectations to what is practical within an ERP solution
  • Willingness to give up traditional ways of doing things and be trained in new processes and techniques
  • Willingness to accept standard ways of doing business across the enterprise
  • An effective decision-making process at the start of the ERP project and all the way through the final accepted configuration
  • Willingness to change organizational structure through reengineering
  • Willingness to adapt to the new environment at:
    • The executive level
    • The operational level
    • The field level
  • Understanding that ERP Changes Everything ! (If you are not careful)
    • Major Areas of Change
      • Technology:
        • Mainframe vs Client Server
        • Education
        • Tools & Techniques
        • Controls
        • Infrastructure:
          • New Network Architecture
          • New Security Requirements
          • New Tools
          • New User Requirements
        • Organizational  structure:
          • MIS Department
          • Accounting
          • Finance
          • Line Operation
          • Ownership of data (ERP has the ability to integrate and redefine an entire organization at all levels)
        • Training:
          • Technical
          • Functional
        • Support:
          • Technical
          • Functional
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