Challenges Of Enterprise Resource Planning Implementation In Iran Larg

Questions: Identify Project concept, scope, aims and objectives and apply appropriate project management tools techniques for effective and successful implementation of the project and by using appropriate scope, time, quality and cost parameters. Appraise key aspects of the project management strategy to the organizational structure and business environment of the organization. Recommend a suitable structure and processes for project monitoring and control using relevant Project tools, techniques and graphic representation of data. Address organizational aspects like quality, risk management and include financial forecasting, uncertainty risk analysis. Integrate planning with estimating and budgeting, budgetary control and use an appropriate planning, execution, implementation and management strategy. Answers: Introduction The project that has been chosen is Successful ERP implementation for a manufacturing organization. The Project Manager will carry out the complete strategic business management. The process will include project management tools, techniques, and explanation of project life cycle, human resource management, communication plan and key deliverables. ERP stands for Enterprise Resource Planning and for a manufacturing oriented organization, automated system will help in error minimization[1]. Thus, the ERP implementation will relate and coordinate all the business units, manufacturing departments, inventories, and supply chain and accounts management. In this project, the management organization that has been chosen is Kohler Company. This organization deals with manufacturing furniture, tile, cabinetry, generators and engines. This is a private oriented organization and is old enough to support the overwhelming demands at present. Thus, the organization needs to install central based data system, such as ERP, which will help in understanding the present inventory and accounts possibilities[2]. Therefore, in this project, through Work Breakdown Structure and project management tools, ERP implementation will be delivered with several charts and tabulations. The main aim of this project is to reduce the expense for human resource and increase coordination among different departments such as suppliers, vendors, distributors, production unit, managers, inventories, warehouse and accounts. Project Management Plan The project management plan can be described in the following chart: Project Title: Successful ERP implementation for a manufacturing organization Project Manager: Executive Sponsor: Principal Stakeholder: Business Owner Project Charter: Implementation of ERP system for business development and sustainability Scope: Organization is currently progressing with increasing demand, hence with ERP implementation; automated process will reduce production time and technological development. Aim: Enhance the technological innovation and coordination of business units to ensure sustainability. Objectives: 1. To reduce overhead expense 2. To enhance communication and organizational sustainability 3. To create a central based data system Table 1: Project Management Plan (Source: Author) Stakeholder Identification Serial Number Stakeholders Explanation 1 Business Owner The main stakeholder of this project is Business Owner as he holds the political and financial assurance of the organization. The impact of the project will give the best result for the business owner, as the return on technological investment will generate sophisticated positive outcome. 2 Hired Engineers The organization at present has` very less technology usage. Thus, the automated system will need to be enhanced, which will include engineers from other sectors. 3 Sales and marketing department The affected business is not confined to one particular unit and thus, approval relates to sales and marketing department. At most of the time, the officials are not able to coordinate with the vendors and distributors, which will be addressed by ERP Table 2: ERP Project Stakeholder Identification Source: [3] Project Management Plan Figure 1: ERP Project Management Source: [4] Work Breakdown Structure Figure 2: Work Breakdown Structure of Project Source: [5] From the above WBS, four important activities can be identified, which are Project Preparatory, System Architecture Design, Business Blueprint and Configuration and development. Figure 3: ERP Work Breakdown Structure Source: [6] After signing-off configuration, defining authorization is required, which will be followed by data conversion, program development and system testing. Testing of system will help in identifying any problems that have been not taken care earlier. Figure 4: ERP Work Breakdown Structure Source: [7] This model is the final stage of ERP implementation as the system will be tested on existing system which will consist of training, testing and cut-over. Project Life Cycle Project Life Cycle of ERP implementation can be divided into 8 stages. Pre-evaluation Screening There are lots packages available for ERP implementation in the market. With too many packages, the business process becomes complicated[8]. Thus, for this organization, it needs to include less number of package as the business units are comparatively lower than multinational organizations. Evaluation Package After one particular package is selected, the organization needs to identify whether it has the capability of implementing the system, as ERP implementation costs a huge amount[9]. Thus, any package needs to be compared with alternatives and then progress will need to be initiated. Project Planning After the package is finalized, ERP implementation will start where roles, responsibilities, functions, time, resource, deadline and related costs will be segregated and aligned[10]. Work Breakdown Structure will be followed in this stage and each of the activities will be allowed ample amount of time and testing. Gap Analysis Post implementation, this phase is the most critical, as the organization will come to know about the systematic model. Organization will know where they are now and where they want to be in future. Even the best selected package will end by delivering 80% functional support, and rest 20% will contain unavoidable risks. Reengineering Any type of malfunctions and systematic problems will be mitigated by additional human resource deployment. This phase is after testing the WBS and necessary changes will be done in this phase so that system is more concrete and efficient[11]. Team Training In this stage, employees within the organization, who will test the automated system will be given training. Adequate time and cost will be allocated and even those employees will be selected who has the best experience and knowledge of the organization. Testing In this stage, the automate system will be tested in real case scenarios. Extreme cases will be tested such as system overload, invalid data entry, multiple user log in and accessibility of hackers. Weak link is used in this testing stage to determine the least possible risk[12]. Post implementation After testing and implementation is done, the consultants and vendors will operate the system and will confirm the go live. Employees, users and other stakeholders will be made aware of the system so that fluid functioning is processed in future. Figure 5: ERP Project Life Cycle Source: [13] Project Management Process Planning Financial planning is the main factor for ERP implementation. There are four elements of budgeting, which are software, maintenance fees, hardware and implementation services. Microsoft Dynamics GP is the software which has the same price all over the market. 18% of the total software cost will be allocated for maintenance fees. For infrastructure, new server will need to be purchased. Microsoft SQL server will be included in this section. Implementation services is completely unknown, which will vary as per the need of business. Monitoring In order to monitor, the consultants and project team will identify the faults in the system. The whole system will be made automated and thus, each of the departmental progress will be customized in this section. SQL server will help in restoring security evaluation and technicians will determine any alteration. Control Process Groups Control process groups will determine the following tools and techniques for ERP implementation: Database management tools Relational database like Sybase, Oracle, DB2, Microsoft SQL Multiple centralized data flow Interface with permission control Content writing ERP tool Logistics department tool Workflow management tool Modules and data repositories Agiloft Workflow Inetlex Business management Reporting tool Real time data review Browser based installation with charts/graphs/tables Communication tool Automated email and instant messaging Broadcast messaging Analytical tools Predictive analysis and data mining Task scheduling tool Clear vision of activity completion in WBS Current and future workload Table 3: Techniques for ERP Implementation Source: [14] Quality Total Quality Management During the project life cycle, Total Quality management (TQM) will be ensured if all the stakeholders are made aware of the business case. Stakeholders will consist of company executives, consultants, vendors, IT team, sponsors and external agency. Project success metrics will be set according to key success indicators. Business case will be supported by IT technicians from different agencies who will give the best management determinants. Each activity from WBS has to be completed and then next activity will commence. Quality Assurance With each stage of project life cycle, gap is projected. Amount of resource and functionalities are to be justified. Quality assurance will be justified at the time of testing the project by the consultants. Gap of the project can be minimized if each of the activities are looked after just after the completion. Figure 6: Gap Analysis Source: [15] Quality Control Project can be controlled by ERP models, Artifacts and Processes. Central standards need to be defined so that importance of operating life is justified. As the organization operates on cash basis, hence it need to move on to accrual-based practices for accounting, which will change the chart of accounts. Documents and reports related to artifacts are to be provided in weekly basis so that the progress can be tracked. Human Resource Management At present the organization is completely dependent on unitary business processes where all the departments are differentiated. Manual data input is followed and thus, Information Technology team needs to be incorporated. The key players for the project are: Key Players Key Activities Project Champion Team Acceptance of technology and incorporating strategies in the organization Top Management User education and training Consultant Implementation Project management Steering Committee Selection of appropriate package Project Team Customization Vendor participation Data conversion and analysis Change management Business process education Interdepartmental communication Table 4: Human Resource Management for ERP Implementation Source: [16] Steering and consultant team will have to be hired from other agencies who will select the appropriate package of ERP. Key Resources Key Resources Explanation Human Resource IT team Project Consultants Steering team Security team Departmental team Operational team Vendor Project Champion Team System Requirement Software Cloud based server (SAAS) Fitrix ERP License Linux Server Red Hat Enterprise Series SUSE CentOS Ubuntu Debian Hardware CPU: Pentium 4 CPU Speed: 2.8Ghz RAM 16 GB Processor: 64 bit Disk: 128 GB SATA Network Card: Ethernet (10/100/1000) Finance System Requirement $ 5,00,000 (Total cost) Maintenance and testing 20% of total cost IT Team 30 % of total cost Table 5: ERP Resources Source: [17] Organization Chart The steering committee will be responsible for ERP implementation, and thus the organizational chart is below: Figure 7: Organization Chart Source: [18] From the organization chart, it can be understood that steering committee will hold the complete project consisting of project manager and change management committee. The Project Champion Team will be for change management committee. Costing and accounting will be determined by product fabrication. Each of the vital departments such as marketing, accounts, inventory and logistics will have communication with ICT team and consultant team so that most flexible framework is achieved. Communication Plan Deliverable Info (What) Recipients (Who) Delivery Method (How) Schedule (When) Who is responsible Project Information Project Team Conference Calls Team Meetings SharePoint As needed Project Manager Project Status PMO Director Project Planner Email ePortfolio By 4pm every Monday By 12 noon every Wednesday Project Manager Agenda/Minutes Steering Committee Project Team Team meetings SharePoint Email Monthly Project Manager Timeline Update Executive Sponsor Mtgs Steering Committee SharePoint Meetings As needed Project Manager Project Updates Project Manager Conference Calls Team Meetings SharePoint As needed Project Team Project Risks Executive Sponsor Project Team Steering Committee Meeting Minutes Risk Documents As needed Project Manager Table 6: Communication Plan for ERP implementation Source: [19] From the above it can be identified that each of the deliverables will be communicated to the project manager. Project manager will stay in touch with the project requirements and key resources in accordance to activities in Work Breakdown Structure. Preliminary requirements will be done by conference calls and team meetings and SharePoint technology. Intermediate mails and ePortfolio will be generated for each of the members of project planner[20]. Once in a week report will be delivered to the manager and necessary communication will be done through the portals. Steering committee will create individual employee portal through which necessary communication will be done at the training and testing schedule so that any faults are identified immediately. Meeting minutes, test documents, team meetings, conference calls, emails and reports will be the mode of communication[21]. Milestone and Deliverable Figure: Milestone deliverable of ERP implementation according to timeframe Source: [22] The whole timeframe has been divided into 6 parts, and each part denote 6 months. From project planning to testing and training has been delivered for the total time frame of 3 years. The milestone and key project deliverables that can be understood from the above diagram are given below: Serial Number Key deliverables Explanation 1 Project and subsidiary plan Determination of project objective and scope 2 Kickoff presentation Provides the signal for starting the implementation and execution after approval from organization 3 Training courses for team Preliminary teaching of ERP course and system to the existing employees of the organization 4 Scenario list of business Each of the processes of the department is processed 5 White paper blueprint Each of the departmental operations are documented 6 Issues and gaps database Differences between calculated and projected outcome are ascertained, which helps in determining pertaining issues 7 Change management plan User skill upgradation is done by project team so that employees become flexible with the installation of new system 8 Presentation walkthrough Departmental business processes are presented that consist of marketing and sales, accounts, inventories and logistics 9 Scenario script Detailed instruction of each of the business scenario is displayed so that project manager gets to know about the project progress 10 Training courses for user The ERP application details and new operating methods are explained to the employees so that least error is expected 11 User documentation Each of the project deliverables are combined into one particular document in a form of report 12 IT specifications The detailed interfaces, customizations and special projects are displayed to the project manager 13 Migration Plan Mapping out tasks and legacy data entry for conversion will be done 14 Cutover plan Tasks of final week will be documented Table 7: Key deliverables of ERP implementation Project Source: [23] Business Risk The organization currently falls under SME and thus, with the implementation of ERP several risks may happen. Project Management The organization may fail to have timely decision making capability by the top management. Lack of initiative, slow decision making and insignificant communication among the stakeholders such as IT group, executive management and business owners may result in project risk. The project management office (PMO) selects the steering committee but often it is found that the members do not know about their responsibilities and information of the organization[24]. This may fail the ERP project management, leading to a huge loss of business. For the concerned organization, such risk is moderate and can be mitigated if the top executive gains motivation and initiative to implement ERP. Project Schedule and Plan Most of the ERP implementation projects fail because of improper timeframe and schedule[25]. For this organization, the whole timeframe has been divide into 6 parts, which is enough, but some of the activities are too much interdependent in WBS. This may delay the activities making the project more complex and resource consuming. The impact is huge for Kohler, as it may run out of resources and can be mitigated if number of staffs in steering committee is increased. Change management This organization is hundred years and most of the employee are old enough to understand the new automated system. Such advanced change may not be suitable for the employees, which may incur a huge loss for the organization. The severity of the risk is high and can be mitigated if new employees are recruited. New employees will be divided into each department who will stand for the organization future. Cutover Cutover indicates shutting down existing system prior to the ERP go live. Many employees will be deployed and new staffs will be added. This is moderate risk for the organization as it may not have the support of old employees and historical methods of handling the critical situation. This risk can be mitigated by extending the cutover time. Conclusion From the project management, it can be concluded that for a SME, Enterprise Resource Planning is vital for its sustainability. The organization needs to incorporate infrastructural change and for that system automation will help in best possible way of communication. From inventory to distribution, the production cycle will be enhanced leading to more sales and a competitive strategy in the industry. On the other hand, the organization will need to incur some risk related to finance and human resource. The timeframe is of 3 years, which is sufficient, but the WBS activities will have to be processed out efficiently so that project is accurately managed by all the stakeholders. 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