What is ERP ?

ERP is Software solution that addresses the enterprise needs taking the process view of an organization to meet the organizational goals tightly integrating all functions of an enterprise. It is a tools used to manage enterprise data, facilitates Company-wide integrated Information Systems Covering all functional Areas, performs core corporate activities and increases customer service augmenting Corporate Image, and organizes & optimizes the data input methodologies systematically.

ERP integrates databases, applications, interfaces, and tools



Is ERP for everyone?

  • A business must analyze its own business strategy, organization, culture and operations before choosing an ERP approach.
  • A company may not be ready to implement ERP.
  • The company’s business processes may not be well defined or managed.
  • If a company is not prepared to make its processes more efficient, then it will not gain the benefits an ERP system can provide.

Selection process of an ERP Package

The Common Criteria for selection for a package:

  1.  How best the package fits the requirement of the company.
  2.  Provision for accommodating the changes in the system.
  3.  Implementation and Post Implementation support from vendor.
  4.  Reliability of Vendor.
  5.  Change in Hardware and Skill requirement.
  6.  Cost of the Package and Budget.

moneyCost of ERP Implementation

The following costs are to be considered:-

  1. ERP package cost.
  2. Consultant cost.
  3. Cost of Data conversion.
  4. Cost of training.
  5. Cost of testing.
  6. Cost of Post-Implementation support.

Modules in an ERP Package

  • Finance Module
  • Manufacturing Module
  • Human Resources Module
  • Material Management Module
  • Sales and Distribution Module

Implementation Steps

1. Pr-evaluation Screening:  Includes making a decision on the perfect package, number of vendors, eliminates the packages that are not at all suitable for the company’s business processes, and select the best available package.




2. Package Evaluation and Selection:  Quality of selection will have a long term impact on the processes of the organization. It is not easy to switch to another product with concomitant scale of investment and complexities. This evaluation and selection process should be properly directed and normally comprises of following activities.


3. Project Planning:  Includes Design the implementation process, develop the Project plan, identify the roles and assign the responsibilities. This phase will decide when to begin the project, how to do it and when the project is supposed to be completed.


4. GAP Analysis: The gap between the existing company requirements and what the ERP package is offering is analyzed. When the ERP package does not meet the company’s full requirements then the company can simply agree to live without a particular function or one can opt for :- a) Upgrade, or b) Identifying a third party product that might fill the gap, or c) Altering the ERP source code


5. Configuration: A prototype of the actual business processes of the company is used for thorough testing of the model in a controlled environment. Configuring reveals not only the strengths of a company’s business process but also- and perhaps more importantly – its weaknesses.


6. Business Process Re-engineering: In-depth study of existing systems/processes is required before ERP is considered. This study brings out deficiencies of the existing system/process. BPR attempts to re-structure and re-organize the human resources, functional areas, Man-Machine interfaces in the organization. Hence BPR attempts to maximize productivity.




7. Team Training: This is the phase where the company trains its employees to implement and later, run the system. After implementation, the company to be self-sufficient in running the ERP system, it should have a good in-house team that can handle the various situations.


8. Testing: This phase is performed to find the weak link so that it can be rectified before its implementation . The test cases must be designed specifically to find the weak links in the system and these bugs should be fixed before going live.


9. End User Training: In this phase the actual users of the system will be given training on how to use the system. The employees who are going to use the new system are identified. Their current skills are noted and based on the current skill levels, they are divided into groups. Then each group is given training on the new system.


10. Going Live: The system is officially proclaimed operational. Once the system is ‘live’, the old system is removed, and the new system is used for doing business.


11. Post Implementation:  This is the maintenance phase. There should be people, within the company, who have the technical prowess to make the necessary enhancements to the system as and when required. Employees who are trained enough to handle problems those crops up time to time.  The post implementation will need a different set of roles and skills than those with less integrated kind of systems. The system must be upgraded as and when new versions or new technologies are introduced.