Disclaimer:
The articles in this blog post are those that I found interesting and
relevant to the topic of ERP and technology in general. I have no
commercial association with any of the entities mentioned in this
article. I may be following a few of these entities on LinkedIn and even
some of these entities may be on my LinkedIn or Social Media network.
These articles are selected purely based on their relevance to the
objective of this blog, to promote ERP. Finally, the summary is mine.
While I stay close to the points in the articles, I also elaborate a few
of them based on my understanding.
The Short URL for this post is http://bit.ly/ERP_Solution_Design
The steps in ERP Implementation are:
5. ERP Implementation: ERP Project Management
6. ERP Implementation: Requirements Gathering
7. ERP Implementation: Solution Design
8. ERP Implementation: Solution Testing
9. ERP Implementation: End user training
10. ERP Implementation: RICE
11. ERP Implementation: Integration
12. ERP Implementation: Data Conversion
6. ERP Implementation: Requirements Gathering
7. ERP Implementation: Solution Design
8. ERP Implementation: Solution Testing
9. ERP Implementation: End user training
10. ERP Implementation: RICE
11. ERP Implementation: Integration
12. ERP Implementation: Data Conversion
13. Post Implementation Support and Stabilization
This week's theme is ERP Solution Design.
The first article identifies the five crucial pieces in ERP System Design, including thorough requirement analysis, alignment with organizational goals etc. The second article on global design gives four items to be addressed before the global design initiative begins. These are establish a balance between requirements of different departments, ensure senior management buy in for any potential changes, address key operational components and accurate data management. The third article is from my blog and consists of two parts exhaustively covering the design aspects of an ERP implementation.
The fourth article is an academic paper that focuses on Strategic management of ERP implementation. The article makes a fascinating point that one of the objectives of ERP implementation is to improve production efficiency through use of IT. Normally this do not happen since most of the IT initiatives simply ports 'AS IS' to 'TO BE'. The article provides a new framework comprising of 16 steps with tools, inputs and deliverables at each step. This article is an ERP practitioner's gold mine.
The final article is again from my blog. I look at the non-manufacturing related wastes that can be eliminated by a careful design of the ERP solution. The article identifies 8 common wastes including obsolete data, excessive data entry, bad naming convention and data duplication as a few of the wastes in an Organization. It gives 14 design considerations to eliminate these wastes. Finally it rounds off with an example of designing GL to illustrate the points covered in the article.
Nice set of articles. Do check it out.
The first article identifies the five crucial pieces in ERP System Design, including thorough requirement analysis, alignment with organizational goals etc. The second article on global design gives four items to be addressed before the global design initiative begins. These are establish a balance between requirements of different departments, ensure senior management buy in for any potential changes, address key operational components and accurate data management. The third article is from my blog and consists of two parts exhaustively covering the design aspects of an ERP implementation.
The fourth article is an academic paper that focuses on Strategic management of ERP implementation. The article makes a fascinating point that one of the objectives of ERP implementation is to improve production efficiency through use of IT. Normally this do not happen since most of the IT initiatives simply ports 'AS IS' to 'TO BE'. The article provides a new framework comprising of 16 steps with tools, inputs and deliverables at each step. This article is an ERP practitioner's gold mine.
The final article is again from my blog. I look at the non-manufacturing related wastes that can be eliminated by a careful design of the ERP solution. The article identifies 8 common wastes including obsolete data, excessive data entry, bad naming convention and data duplication as a few of the wastes in an Organization. It gives 14 design considerations to eliminate these wastes. Finally it rounds off with an example of designing GL to illustrate the points covered in the article.
Nice set of articles. Do check it out.
1. Five crucial pieces of ERP System design: From ERP Software Blog
https://www.erpsoftwareblog.com/2012/08/the-five-crucial-pieces-of-good-erp-system-design/
The five crucial pieces are: Thorough requirement analysis, Alignment with Organizational goals, Best practices guidance, Expert functional review, Expert technical review (to evaluate your exisiting systems and the capabilities of your IT staff)
2. Determining global design in ERP implementation: Panorama Consulting.
https://www.panorama-consulting.com/determining-global-design-in-an-global-erp-implementation/
The global design needs to consider standardization, business benefits and the integration of political cultural differences within the Organization.
Before engaging an Organization in global design, it is important to define a framework of how IT plans to drive change with a new ERP system. The following items need to be addressed before the initiative begins.
1. Establish a balance: Since different departments will have different levels of process complexity, it is better to group departments with similar complexity levels.
2. Obtain senior management buy in: It is important to ensure that the head office gets all the relevant information without impinging on the autonomy of the business units. Ensure that the future reporting structures are signed off before initiating the global design initiative.
3. Address the key operational components of forecasting and inventory management that drive the flow of inventory: The questions to be addressed are: Who will drive the sales forecasting, how will DRP and MRP run between facilities and the warehouse structure.
4. Ensure accurate data management: Data management should involve identification of data owner, process of data cleansing and updation and the also the various IT and user roles. Data management will encourage collaboration within the Organization.
Closing these points will ensure that Global Design initiative will be successful.
3. The 'How to' guide to ERP Solution Design: ERP-Consultancy Blog
Part 1: http://erp-consultancy.blogspot.com/2013/04/the-how-to-guide-to-erp-solution-design.html
Part 2: https://erp-consultancy.blogspot.com/2013/04/the-how-to-guide-to-erp-solution-design_28.html
There are two types of configurations in ERP. One is that which cannot be modified after the first transaction is entered. For example, you cannot modify a costing method after you enter the first inventory transaction. Second is the one that can be modified any time.
Organization structure is the most important aspect of ERP Design. ERP provides many options for this. It is important to consider multiple options before freezing on the best structure. Similar is the case with Chart of Accounts, it is important to identify each dimension after a lot of discussion.
Once you have got these two right, focus on the MOSCOW list. Focus on the 'Must Haves' first. The chances are that most of the ERP will cater to must haves. For each of the must haves and the should have list, identify multiple solution options through CAR (Causal Analysis and Review).
It is also important not to over-configure the system. Understand the difference between 'Analytical and Transactional information. Configure the system for the latter.
Naming convention and Units of Measure do not get the importance they deserve in an ERP implementation.
Other aspects to be considered are:
- Always consider the flows when designing the solution
- Always consider financial impact
- Start from reports
- Avoid customization wherever possible
- Differentiate between Transactional and Analytical information.
- Start from the user perspective
4. Strategic approach to ERP System Design and Implementation (Downloadable PDF)
http://bit.ly/2FZbv5W
The only way to maximize the benefit from ERP is by deliberate and extensive alignment of ERP capabilities with the Business System development strategy. This approach is called Strategic Planning of the Information Systems (SPIS). The article makes a very interesting point. It starts off by saying that Volume of Production V(p) is a function of availability of natural resources (R), Knowledge (K) and Number of People in the production system (H). Mathematically it can be said that V(p) = f(R,K,H).
So as R and H decrease (Natural Resources deplete and number of people reduces), the only way in which Production can be maintained is by optimizing technology. (This lays out the dilemma of an ERP consultant in stark detail. One of the reasons for introducing technology is to reduce the labour involved and maintain Production at the same level)
However it has been found that introduction of IT does not improve the process efficiency. Why?
There are two reasons. One, companies use IT to automate ineffective processes. 'AS IS' is directly converted to 'TO BE'. There is no BPR done before introduction of ERP systems. Two, in many cases ERP is considered as a Technology Initiative rather than a Business Process initiative.
The SPIS methodology framework as defined in this article consists of 16 steps in the Information System design. For each step, the article details the methods to be used, the inputs into the methodology, the deliverables and groups each method in terms of usability. Some of the steps are, Description of Business system, Business System Reengineering, Optimization of new IS architecture, Modelling of new business process, Software Design, Implementation and Evaluation of the new IT System.
The chart below gives a flavor of the level of details that this article goes into.
The framework is described in elaborate details with flowcharts. Detailed explanation of the same is outside the purview of this post.
Download and read it. It is awesome and gives some new and fresh perspectives.
5. Designing ERP to create a 'Lean Organization': ERP-Consultancy Blog
https://erp-consultancy.blogspot.com/2011/04/how-can-you-implement-lean-in-erp.htmlSome of the examples of Waste in any Organizations are Obsolete data, duplicate data, bad naming conventions, excess transactions, waste of paper and stationery, manual labour, bad accounts payable practices and others.
The article identifies various ways in which an ERP consultant can design the solution to reduce / eliminate these wastes. One of the examples of obsolete data could be obsolete inventory data. Obsolete inventory can be handled at the time of data conversion by eliminating the same. As an ongoing process, the consultant can design a solution that informs the Organization as the inventory is about to become obsolete so that the Organization can design push strategies to push this inventory out of the system. Another set of processes can obsolete the inventory automatically as its shelf life is crossed. The advantage of reducing this waste is immediate improvement in customer satisfaction and increase in inventory turns. The article provides 14 design considerations that cover the entire ERP implementation cycle.
The article rounds off by giving specific examples of how to implement Lean in General Ledger.
Additional Reading
1. Design considerations in Inventory Item Coding: ERP-Consultancy Blog
https://erp-consultancy.blogspot.com/2007/05/design-considerations-for-item-coding.html
2. ERP Systems: Design, Trends and Deployment (Downloadable PDF)
http://bit.ly/2v11H6t
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