Project Management Issues

in Implementing ERP

07/22/20
 PROJECT MANAGEMENT

• PROJECT DEFINITION

A project is a complex, nonroutine, one time effort limited by time,

budget, resources and performance specifications designed to meet
customer needs and achieving the set business goals.

Projects are those tasks which are specific and unique with a
specific deliverable aimed at meeting a specific need or purpose.

RADM-ERP-CHRIST
07/22/20
UNIVERSITY 2014
 PROJECT MANAGEMENT
CHARACTERISTICS OF A PROJECT :

1.An established objective

2.A defined life span with a beginning and an end.
3.Multi disciplinary with involvement of several
departments and professionals.
4.Doing something that has never been done before.
5.With specific(budgeted) cost, time.
6.Demand performance requirements.

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 ERP Project
• ERP Projects are large and Important projects
• Critical in terms of their potential and actual impact
• The track record is far from excellent
• Benefit realisation is questionable
• Preparedness is critical but badly understood
• This leads to problems during the implementation phase
that are not solved properly => dysfunctional ERP
• Very low levels of end-user satisfaction are reported
• Essentially different from traditional IT projects => need
for a different approach in terms of project management

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 ERP Project
• REASONS : -

• Poor preparation for project

• Lack of managerial awareness of risks / opportunities
• Lack of understanding of how to select software
• Lack of vision of the business impact
• Poor understanding of how to scope project
• Project management nightmare
• No guide book to find out where to start
• Project leader may not be an experienced project
manager (ownership)

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 PM perspective
1 Project Integration 2 Project Scope 3 Project Time
Management Management Management

1.1 Project Plan Development 2.1 Initiation 3.1 Activity Definition

1.2 Project Plan Execution 2.2 Scope Planning 3.2 Activity Sequencing

1.3 Integrated Change Control 2.3 Scope Definition 3.3 Activity Duration Estimating

2.4 Scope Verification 3.4 Schedule Development

2.5 Scope Change Control 3.5 Schedule Control

4 Project Cost 5 Project Quality 6 Project Human

Management Management Resource Management

4.1 Resource Planning 5.1 Quality Planning 6.1 Organisational Planning

4.2 Cost Estimating 5.2 Quality Assurance 6.2 Staff Acquisition

4.3 Cost Budgeting 5.3 Quality Control 6.3 Team Development

4.4 Cost Control

7 Project Communications 8 Project Risk 9 Project Procurement

Management Management Management

7.1 Communications Planning 8.1 Risk Identification 9.1 Procurement Planning

7.2 Information Distribution 8.2 Quantitative Risk Analysis 9.2 Solicitation Planning

7.3 Performance Reporting 8.3 Risk Response Planning 9.3 Solicitation

7.4 Administrative 8.4 Risk Monitoring and Control 9.4 Source Selection
07/22/20 RADM-ERP-CHRIST UNIVERSITY
9.5 Contract Administration
2014
 Project Integration Management
• General preparedness
• Awareness of what projects entails – volume
of effort required, effect on staff assigned to
ERP team, budget, training…
• Awareness that ERP cannot fit in
completely with the existing business
practices and try to adapt to the package.
• After ERP implemented, don’t expect
reduction in workload or miracles to happen.

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 Project Integration Management
• It is recommended that the user
requirements and overall business
objectives should be met within the
framework of standard ERP package
which otherwise if altered may pose
integration and functionality problems.
• More customization – more delays / cost
escalation.
• Balance needs to be created.
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 Project Scope Management
• Critical for ERP:

• Number of modules, number of areas, extent of

customisation, number of interfaces with legacy
system, size of user population
• Surveys indicate most firms would change scope
during the implementation.
• Change in scope mid way through project
responsible for most cost /time slippages
• Scope should cover – General scope, functional
scope, geographical spread and Deliverables /
milestones.

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 Project Time Management
• ERP projects are amongst the longest and time
management is the key.
• After project scoping, scheduling the time for the
project to be done meticulously.
• Project monitoring reviews / meetings by project
manager / steering committee at frequent
intervals to ensure project on track.
• Corrective measures initiated in the course of
the project.

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 Project Cost Management
• ERP projects are costly or highly costly
• Much of the costs are hidden to a certain
extent – e.g.: training, customization,
testing, data conversion/analysis, brain
drain, interactions/additional resources.
• Changes to the scope
• Not meeting schedules, extended period
of customization / implementation
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 Project Quality Management
• ERP projects require a serious
transformation process that must be
validated – e.g. invoicing, payroll…
• Many aspects require hard-to-get expertise
• Application / organisational knowledge
dilemma (eg: use of consultants)
• Suggested/ recommended to have third
party certification for efficacy of the ERP
implementation.
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 Project HR Management
• Following skills required in ERP project
• ERP Product knowledge
• Change Management
• Project Management
• Training and communication
• Software / hardware / networking and system
administration
• Information security management
• Above all Top management commitment and addressing
the HR issues and drive the programme.

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 Project HR Management
• Project team (full time) + business as usual
dilemma – who can you afford to use?
• Support for project at local level
• Committing manpower as required without any
compromise ?
• Training company wide / end users to ensure
efficacy
• Brain drain …. ? Soon after implementation
• Communication / motivation / rewarding schemes

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 Project Communication
Management
• Other side of coin: “selling” the project internally
and externally
• Can change be negotiated?
• How much will it cost?
• Not always a case of “stupid” resistance to best
practice
• Regular reviews / communicate the status and
update the ERP project teams / users etc.
• Setting up communication channels during the
implementation phase to resolve issues
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 Project Risk Management
• ERP projects can jeopardise earlier work
• They also disturb everyday work over long
periods
• They can lead to unworkable situations
• Time / cost overrun risks
• Risk of loosing trained manpower /
retaining strategy

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 Project Procurement
Management
• Which one is the one?
• How are vendors really selected?
• Political or unethical decisions ?.
• Establish sound procurement processes
for evaluation of vendors, selection of
vendor and assessment of vendor
performance from time to time.
• Escalation mechanism in case of any
issue
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 Create Project Team
• Create Project team identifying the leader
and members specifying roles with well
defined organization structure.
• Should have reps from all functions.
• Install a project director(head of the firm),
steering committee, project manager with
his team, validation/QA team, Functional
team, IT team and consultants if required.

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 Conclusions
• ERP Projects are special

• Many common stories in the ERP implementation cases

• ERP Project Management is tricky and different
• Certain areas deserve additional scrutiny – Change
management, reviewing the effectiveness of the system
post implementation, training and brain drain issues.
• Effective monitoring system is the key to successful ERP
project implementation.
• Third party Quality audits recommended during the
implementation phase.
07/22/20