From news article or internet information, find an example of an organization that is installing an ERP package. If possible get a copy of the over-all project plans and analyze the various activities and compare them with a standard SDLC.
SAP
About SAP
Headquartered in Walldorf, Germany, SAP is the market leader in enterprise application software. Founded in 1972, SAP (which stands for "Systems, Applications, and Products in Data Processing") has a rich history of innovation and growth as a true industry leader. SAP applications and services enable more than 183,000 customers worldwide to operate profitably, adapt continuously, and grow sustainably. With revenue (IFRS) of €12.5 billion for the year 2010, SAP has more than 54,000 employees and sales and development locations in more than 50 countries worldwide [1].
SAP runs SAP
Before SAP releases its solutions to its clients, it is first use in the company to help its employees effectively and efficiently address its own operational needs [2].
There are no available project plans of SAP that are available online which may due to the confidentiality of the information contained on SAP project plans. But to understand what the various activities in ERP are, Marianne Bradford (2010) discusses the ERP Life Cycle which composed of:
· Planning
· Package Selection
· Implementation
Implementation is the methods a company uses to achieve their goals by transforming the way they carry out operations and softwares are tools used to meet that objective (Marianne, 2010).
· Installation
Installation is the mechanics of changing from one software package to another while keeping problems at a minimum (Marianne, 2010). The software should meet the operational and strategic goals to which the reason it is installed. But it does not mean that the software will achieve those goals over a sustained period of time. There are instances that Marianne (2010) mentioned in which the success of the installation of the software does not matter if the employees don’t know how to use it.
§ Configuration
Configuration is a major implementation task in which business and functional settings in the ERP system are changed to make the “out of the box” software support the customer’s business needs. Configuration does not make any changes to the core software code, but instead updates tables with settings and entries specific to the customer’s business. Called configuration tables, these tables enable a company to tailor a particular aspect of the system to the way it chooses to do business. Project team members can use configuration tools to select alternatives through an easy to use GUI. These selections then behave like switches that tell the software to perform differently based on the values selected (Marianne, 2010).
· Customization
There are reasons why ERP software undergoes customizations according to Marianne (2010), it is either the company has a business process that is unique to other companies or it will provide the company an edge over it competitors. Customization requires programming, which must be performed by a programmer/developer, whether in-house (if expertise exists within the company), or external by a consultant. The project team should also consider approaching the software vendor for consultation and support. Often the vendor may assist by internalizing efforts to provide unique solutions that would otherwise require customization and instead make them configurable options. This approach may be advantageous to both parties. The company gets what they want more easily, and the vendor may expand their target customer base to attract more companies that may also need this option (Marianne, 2010).
o Enhancement
An enhancement occurs on the ERP software when the customers ask for additional functionalities or wants to change the look and feel of the screen. In an SAP environment, this type of change would not create a core software change but makes use of user exits, which are pre-defined breaks in the core ERP code where custom programming can be inserted or “called” without fundamentally altering the way the ERP transaction works (Marianne, 2010).
o Modification
Modification is made when the customer decides to make changes on the ERP software that will affect the core code. It is because the software does not have the capability to address the requirement and the software has to be changed in the way it works. And as mentioned by Marianne (2010), modifications needs to be registered with the software vendor and is not supported by future upgrades of the software because the modification is outside of the scope of the software creation.
· Testing
Testing is important prior to the deployment of the software. This checks if the software works as to what is required and should meet the customers’ expectations. Also during testing, the project team confirms the software can meet the previously specified requirements and identify gaps that are not found during the package selection phase. Marianne (2010) mentioned that companies can use conference room pilot (CRP) sessions where conference rooms are designated as temporary locations to support development and testing, and employees can execute transactions with the proposed system configurations. As transactions are executed, expected results can be compared to actual results. Differences between the two will identify areas where the system or the expectations might need to be tweaked. Marianne (2010) also mentioned specific types of testing which includes:
o Unit Testing – small increments of functionality as discrete steps in a business process or testing a single development object to the requirements in a functional specification.
o Integration Testing – Testing end-to-end business processes including any customizations, enhancements, or interfaces to external systems.
o Customer acceptance testing – Usually a final round of integration testing in which key users develop realistic business scenarios that represent how the system will need to work after go-live. The users are tasked with testing the system to their approval or acceptance. This milestone is critical to proceeding with go-live cut-over activities.
o Security Testing – Testing all of the user roles and authorizations that are being set up in the system. These tests include both positive and negative tests to demonstrate that allowed functionality can be accessed or that unauthorized access is appropriately denied.
· Change Management
The implementation process of ERP would change the way employees do their jobs. This could be advantageous to the company because of best practices implemented but according to Marianne (2010), people are naturally hesitant to change. Marianne (2010) states that, “This hesitancy must be anticipated and managed. Employees should be encouraged to provide input into the implementation process and to have their input considered. They should also be educated in the system’s objectives and the business case that supports its selection”. Change management is the body of knowledge that has evolved to address change within the context of an organization. Some additional definitions of change management include as mentioned by Marianne (2010):
o A systematic approach to dealing with change, both from the perspective of an organization and on the individual level.
o A structured approach to managing change in individuals, teams, organizations and societies that enables the transition from a current state to a desired future state.
o Getting employees from Point A, prior to change, to Point B, where all employees are fully trained and new processes are in operation.
o Unfreezing, transitioning, and refreezing. The unfreeze step gets employees from “unready to change” to “being ready to take the first step towards change”. The transition step keeps the change moving through incremental steps, employee/management involvement, and open door policies by management. The refreeze step establishes roots so that the new point stays permanent and employees do not resort back to old methods or systems.
As said by Marianne (2010), “Without change, performance would never improve”. Marianne (2010) also said that, “successful companies have a culture that keeps moving and changing proactively” but these changes in the company should be manage properly with formal processes that:
§ Defines the objectives of the change
§ States the business case supporting the change
§ Identifies the actors or agents responsible for the change
§ Defines the schedule of the events that will result in the change
§ Lists specific steps involved in implementing the change
§ Defines the results confirming each step’s success or failure
§ Identifies risks and potential points of failure in the change
§ Incorporates mechanisms for feedback and plans for continuous improvement
· Interfacing with other Systems
ERP system should be able to exchange data with other client server systems as well as legacy systems. Marianne (2010) also mentions that, “ERP systems may interface with external business partners through electronic data interchange and electronic funds transfer protocols”. Interfacing ERP with other System or external entities to extend is functionalities increases time and cost to the development of the ERP system but it will be essential to integration of data that the ERP processes.
· Training
As said by Marianne (2010), “training expenses are high because employees almost invariably have to learn a new set of processes, not just a new software interface. Professional training companies may not always be the best resource to help because they are focused on teaching users how to use the software versus educating users about the particular ways the company does business”. It important for the employees to know changes on the business processes which is caused by the implementation of ERP and not just the software functionalities and interfaces.
· [b]Operation and Maintenance[/b]
After go-live, according to Marianne (2010), the company implementing ERP system proceeds to the operation and maintenance phase which starts with the period of stabilization and while the memories about the ERP system is still fresh, the project team should conduct “postmortem session” to determine what went right, what went wrong and what are the lessoned learned during the ERP system development and deployment. Maintenance activities are then started shortly after the ERP system goes live. Marianne (2010) also mentions some typical ERP maintenance activities namely:
o Preventive maintenance - These are regularly scheduled tasks that must be performed to keep the system functioning properly.
o Emergency maintenance - These are tasks that must be performed immediately. For example, if a software bug is discovered that has potentially damaging effects to the business, then that bug needs to be fixed as soon as possible, even if it may affect regularly scheduled operations.
o Software updates - ERP vendors constantly fix bugs, implement new best practices and incorporate the feedback of customers in their software.
· Upgrading
Upgrading ERP system is a complicated task because of ERP systems that has undergone modification or customization. It is an extensive job for the vendor when it comes in testing every combination of bug fix in every module against every possible combination of operating system, database and application server. In this matter, Marianne (2010) mentioned that the responsibility on what upgrades on the ERP system to apply falls on company. And even though it is a bit risky, companies choose to upgrade their ERP system for the following reasons:
o Competitive advantage - New features and capabilities give the company an edge over its competitors.
o Globalization - Features and updates designed to increase the flow of information to customers and business partners can increase the ability to operate globally.
o Integration - Enhancing the flow of information between the ERP system and other systems within the company increases operational efficiency and improves communication.
o Best practices - Incorporating new best practices allows the firm to operate more efficiently.
o Cost reduction - Lowering administrative overhead and improving the support offered by the ERP vendor results in lower operating costs.
ERP Compared SDLC
ERP provides the basic or core functionalities of the software and can be modified or customized to meet the costumer’s requirements and functionality satisfaction. The development of the ERP software are done repetitively even though the planning phase of it is finish and on the implementation phase. Any change can be address as late as the development cycle reaches to the implementation phase whereas on SDLC, it is expensive in terms of time to go back to the planning phase if there are modifications that are inserted in the middle of the design phase. SDLC simply means that the project team should start from nothing then provides a system at the end of the development phase while on ERP, a skeleton of the system is provided and then it is on the project team to add and make modifications and customizations.
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