Name Anil Kumar Joshi

Roll No. 520949950

Course & Semester Master of Business Administration – MBA Semester 3

Subject Name & CodeOM0002 – Enterprise Resource Planning (Book ID: B1069)

Assignment No. Set – 1 & 2

LC name & Code NIPSTec Ltd. 1640

Date of Submission 14.12.2010

Session

OM0002 – Enterprise Resource Planning

Assignment - Set - 1

Q1. How does ERP inventory module maintain inventory items? List outthe different modules under ERP inventory management.

Ans. ERP Inventory module is a simple yet dominant inventory tracking module that facilitates the process of tracking and controlling the inventory and also provides the flexibility of customisation. Earlier, paper based systems were used to process information from various departments of an organisation and it consumed time.

ERP inventory management system reduces time lag and makes the entire process efficient, by maintaining the appropriate level of stock in the warehouse. It helps in maintaining the suitable level of stock in the warehouse. The activities of inventory control involve:

· Identifying inventory requirements

· Setting targets

· Providing techniques and options

· Monitoring item usages

· Integrating inventory balances

· Reporting Inventory

Changes in inventory are automatically updated. This enables inventory management employees to see if an item is currently in stock. Since the database is centralised, the ERP inventory system allows flexibility in customisation and configuration with various applications from different departments of an organisation. However, the systems that deploy ERP management are dependent on networks.

Features of ERP Inventory Management

ERP inventory management has many features .Some of them include:

· Quality control based on QC Parameters

· Analysis which help in maintaining best possible stock level

· Extensive verification of stock

· Online status of item quantity in terms of on-hand, on –hand available, reserved, ordered, to order,

rejected, defective and rework-able quantities

· High degree of flexibility for managing complex storage needs and automatic update of warehouse

ERP management uses bar codes to maintain inventory items. A bar code is a small image that has bars (lines) and spaces fixed on the store items and used as an identification mark of a particular product. This makes tracking stock much easier. Once the items are bar-coded, they get scanned and their product information is entered into the ERP inventory management system.

Introducing bar code labels on stock helps companies save money as it keeps the list of stock updated. Employees can easily see when certain quantities are low and need to re-stock. Customers also benefits from this as customers can see what products are currently in stock.

The main purpose and benefit that the organisation can derive from ERP management system is that the ERP system is company-wide and has a single software system, where as organisations that do not employ ERP management will have dissimilar and diverse software applications that may not be compatible with one another.

Benefits and Limitations of ERP Inventory Management

ERP inventory management system has many benefits. Some of them include:

· Tracking of orders from the point the order is received to its release.

· Facilitating appropriate communication between different areas.

· Reducing the threat of loss of information.

· Providing a ‘top down’ summary of the mechanism of a company.

· Setting up an outline of security to protect against theft from external or within a company.

· Replacing old and primitive paper based systems that improves efficiency.

Limitations of ERP Inventory Management

ERP inventory management helps an organisation in many ways. However, it also has some limitations. They are:

· Limited customisation

· Expensive

· Not friendly with every type of business like small organisations.

· Harder to fix responsibility as it is a company-wide system that connects all areas

· When all departments in a company are not willing to share information, maintenance of sensitive

data can disturb the work flow

Installing ERP Inventory System

ERP Inventory systems are expensive, and are complex to install. Usually a third party contractor is hired to install the software and hardware, and these vendors who provide installation also suggest consultation and customise the system to the business needs.

However, installation is a tedious task and consumes time depending on the size of the organisation and the requirements of the company. Typically, installing ERP Inventory system takes more than a few months, and larger organisations can take up to a year to install ERP Inventory system.

There are many consulting vendors or firms available in the market to install ERP Inventory system; besides installing the system, they also train the employees to use the installed system.

An ideal installed inventory system should always be able to have answers to the most anticipated questions such as:

· What and how much stock is available in the warehouse?

· What is sold and to which organisation?

· What are the financial issues related to price and margin?

· What orders that are placed, but remains undelivered?

Installation of ERP Inventory systems is complex and not a simple job. However, deploying web based Inventory management ERP is simple and consumes less time for installation.

Failure of ERP Inventory installation

Many times, when installation of ERP software fails, ERP software vendors are held responsible. However installation failure can occur due to the following factors:

· Operating strategy did not suit organisation design and operation.

· The implementation and completion took longer than anticipated.

· Pre-implementation actions were not well planned.

· People were not well ready to learn and operate the new ERP system.

· Cost related issues leads to difficulties in implementing and using ERP Inventory systems.

Q2. Explain the three types of CRM. Briefly explain the functionalities of CRM sub modules.

Ans. Customer relationship management (CRM) is a widely-implemented strategy for managing a company’s interactions with customers, clients and sales prospects. It involves using technology to organize, automate, and synchronize business processes—principally sales activities, but also those for marketing, customer service, and technical support. The overall goals are to find, attract, and win new clients, nurture and retain those the company already has, entice former clients back into the fold, and reduce the costs of marketing and client service. Customer relationship management describes a company-wide business strategy including customer-interface departments as well as other departments.

Types

The three types in which CRM support the relationship between a business and its customers are to:

Acquire: CRM can help a business acquire new customers through contact management,

selling, and fulfillment.

Enhance: web-enabled CRM combined with customer service tools offers customers service

from a team of sales and service specialists, which offers customers the convenience of one-

stop shopping.

Retain: CRM software and databases enable a business to identify and reward its loyal

customers and further develop its targeted marketing and relationship marketing initiatives.

Functionalities of CRM sub modules:-

Customer Relationship Management or CRM software supports a broad set of activities for acquiring, enhancing or retaining customers. The functionality of CRM software varies from vendor to vendor. There're a few modules common to most of packaged CRM software.

Direct Marketing Module

Direct marketing is a set of promotional activities in which direct contact is made with the target customer. Direct marketing software allows companies to identify target customers for particular promotional criteria, generate direct mails, analyze response from target customers. Common techniques include direct mail, telemarketing, and etc. Direct marketing module can automate and streamline many of those marketing efforts.

CRM Sales Module

Revenues from sales are live blood for commercial organizations. Sales module implements functions of pre-sales support, order placement, order scheduling, shipping and invoicing. Sales module is closely integrated with organizations' ecommerce websites. Many sales modules from CRM vendors offer online storefront as part of CRM system.

Call Center Module

A call center is a sophisticated voice operations center that provides a full range of high-volume, inbound or outbound call-handling services, typically including customer support, operator services and directory assistance. It generally refers to reservations centers, help desks, information lines or customer service centers. A call center consists of a complex telecommunication infrastructures, sophisticated computer systems and skilled service representatives organized to effectively manage the incoming and outgoing telephone calls. CRM call center module captures the vast amount of data in call center operation, prioritize call center service, and direct incoming calls to the appropriate service representatives.

Help desk Module

Help desk software can improve customer satisfaction and productivity by automating customer support processes. Basic features of help desk software includes requests submission, email notification, searching Knowledge Base and administration interfaces. Web-based helpdesk software allows users to search support knowledge base so that users can either find the answer online without calling a support representative or ask more specific questions when they do need to talk to a live person for support.

Q3. Describe how you would go about the different phases of the ERP implementation lifecycle, if it were being done in your company.

Ans. The process of ERP implementation is referred as d as "ERP Implementation Life Cycle". The following are the steps involved in completing the lifecycle.

Shortlist on the basis of observation

Selecting an ERP package for the company can nevertheless be compared with the process of "Selecting the right Person for the Right Job". This exercise will involve choosing few applications suitable for the company from the whole many.

Assessing the chosen packages

A team of Experts with specialized knowledge in their respective field will be asked to make the study on the basis of various parameters. Each expert will not only test and certify if the package is apt for the range of application in their field but also confirm the level of coordination that the software will help to achieve in working with other departments. In simple terms they will verify if the synergy of the various departments due to the advent of ERP will lead to an increased output. A choice is to be made from ERP implementation models.

Preparing for the venture

This stage is aimed at defining the implementation of ERP in all measures. It will lay down the stipulations and criterias to be met. A team of officers will take care of this, who will report to the person of the highest hierarchy in the organization.

Gap Analysis

This stage helps the company to identify the gaps that has to be bridged, so that the companys practice becomes akin to ERP environment. This has been reported as an expensive procedure but it is inevitable. The conglomerate will decide to restructure the business or make any other alterations as suggested by GAP analysis inorder to make ERP user friendly. Click here for a detailed study on GAP analysis. A choice is to be made from ERP implementation models.

Business process reengineering

Changes in employee rolls, business process and technical details find place in this phase of restructuring most popularly refered as business process engineering. For more details on BPR click here.

Designing the System

This step requires lot of meticulous planning and deliberate action. This step helps to decide and conclude the areas where restructing have to be carried on. A choice is to be made from ERP implementation models.

In-house Guidance

This is regarded as a very important step in ERP implementation. The employees in the company are trained to face crisis and make minor corrections as well because the company can neither be at liberty nor afford the bounty to avail the services of an ERP vendor at all times.

Checking

This stage observes and tests the authenticity of the use. The system is subjected to the wildest tests possible so that it ensures proper usage and justifies the costs incurred. This is seen as a test for ERP implementation.

The real test

At this stage the replacement takes place viz the new mechanism of operation and administration takes over the older one.

preparing the employees to use ERP

The employees in the organization will be taught to make use of the system in the day to day and regular basis so as to make sure that it becomes a part of the system in the organization.

Post Implementation

The process of implementation will find meaning only when there is regular follow up and proper instruction flow thereafter and through the lifetime of ERP. This will include all efforts and steps taken to update and attain better benefits once the system is implemented. Hence an organization has to perform ERP implementation safely and correctly.

Assignment Set – 2

Q – 1. How does ERP inventory module maintain inventory items? List out the different modules under ERP Inventory management.

1. In large organisations, information is often extended across various departments, resulting in declined performance due to lack of integration. Also considerable cost is involved in maintaining these systems. For example, Boeing depends on many suppliers to supply the components required to build an airplane. The manufacturing process involves fixing the right parts in the right order at right time. This process was managed using 400 separate systems, which were integrated but were not synchronised properly. This resulted in various miscommunications such as parts that were ordered were not delivered on time, forcing Boeing to run into a huge business loss. Later Boeing replaced these primitive systems with integrated Enterprise Resource Planning (ERP) systems.

With the need to centralise multiple sources of information, systems that deploy ERP management has emerged as the preferred solution in business organisations.

Inventory is the largest asset of any organisation. It is a stock of items stored to meet any demands in the future. The reasons for which inventories have to be maintained or kept in stock are:

· Time: Whenever an order is placed by a customer, it takes minimum amount of time for the supplier to supply the committed stock. In order to facilitate the process of production in the time lag between order and supply, inventory should always be available as stock.

· Uncertainty: Buffer (temporary stock) is maintained to facilitate uncertain and unexpected crises in demand, supply and transportation of inventory.

Customers usually expect high quality service from organisations. Hence, inventory must be adequate to meet customers expectations. Therefore, inventory management becomes a necessary part of a successful business. Inventories typically consist of goods, resources, and finished products. This method helps transporting inventory at appropriate time.

Inventory management is not limited to delivery of raw materials; it is also the management of these materials as they go through the various stages. However, Inventory control is not the in all the organisations. Organisations need to react quickly to the consumers demand and make cost effective planning in order to remain viable. Efficient inventory management helps the organisation to meet customers’ demands and at the same time it increases the net income.

It enables a business to have instant and specific access to the inventory at any time to meet consumer demand. ERP inventory management takes control of a business’s inventory such as purchasing, delivery, and advertising. It mainly helps in eliminating most of the business problems such as inventory shortages, customer service and financial management.

2. ERP Inventory Management

ERP is a computer system that maintains information database which can be accessed through out the organisation. i.e. the system is centralised.

Systems that deploy ERP inventory management allows information sharing across various departments of the organisation and also across geographical locations. It allows employees to view information in reliable and consistent fashion. The systems that deploy ERP procedures maintain only one software system and are dependent on networks.

Consider for illustration how the order execution process is managed by SAP. Figure 8.1 shows the execution of a process.

Figure: Order Execution Process

From the figure 8.1 you can make out that, whenever a customer makes an enquiry about the inventory (1). A quote is prepared by SAP along with the finance information and date of delivery (2). The quote takes into report what it already knows about the consumer (3). A check is performed to determine the amount of stock or inventory that is available for maintenance (4), and thus resulting in an instant and automatic update of information in the database. Once the quote is prepared by the supplier, it is presented to the customer. If the customer accepts the quote, SAP issues a sales order (5) by quoting their prices for each item. The order is then processed as per the requirements by sending the necessary information to various departments of the organisation and delivery is automatically scheduled (6). The cost issues of customer billing are also automatically processed (7). Thus the SAP tool manages the entire ERP cycle.

ERP Inventory module is a simple yet dominant inventory tracking module that facilitates the process of tracking and controlling the inventory and also provides the flexibility of customisation. Earlier, paper based systems were used to process information from various departments of an organisation and it consumed time.

ERP inventory management system reduces time lag and makes the entire process efficient, by maintaining the appropriate level of stock in the warehouse. It helps in maintaining the suitable level of stock in the warehouse. The activities of inventory control involve:

· Identifying inventory requirements

· Setting targets

· Providing techniques and options

· Monitoring item usages

· Integrating inventory balances

· Reporting Inventory

Changes in inventory are automatically updated. This enables inventory management employees to see if an item is currently in stock. Since the database is centralised, the ERP inventory system allows flexibility in customisation and configuration with various applications from different departments of an organisation. However, the systems that deploy ERP management are dependent on networks.

2.1 Features of ERP Inventory Management

ERP inventory management has many features .Some of them include:

· Quality control based on QC Parameters

· Analysis which help in maintaining best possible stock level

· Extensive verification of stock

· Online status of item quantity in terms of on-hand, on –hand available, reserved, ordered, to order, rejected, defective and rework-able quantities

· High degree of flexibility for managing complex storage needs and automatic update of warehouse

ERP management uses bar codes to maintain inventory items. A bar code is a small image that has bars (lines) and spaces fixed on the store items and used as an identification mark of a particular product. This makes tracking stock much easier. Once the items are bar-coded, they get scanned and their product information is entered into the ERP inventory management system.

Introducing bar code labels on stock helps companies save money as it keeps the list of stock updated. Employees can easily see when certain quantities are low and need to re-stock. Customers also benefits from this as customers can see what products are currently in stock.

The main purpose and benefit that the organisation can derive from ERP management system is that the ERP system is company-wide and has a single software system, where as organisations that do not employ ERP management will have dissimilar and diverse software applications that may not be compatible with one another.

2.2 Benefits and Limitations of ERP Inventory Management

ERP inventory management system has many benefits. Some of them include:

· Tracking of orders from the point the order is received to its release.

· Facilitating appropriate communication between different areas.

· Reducing the threat of loss of information.

· Providing a ‘top down’ summary of the mechanism of a company.

· Setting up an outline of security to protect against theft from external or within a company.

· Replacing old and primitive paper based systems that improves efficiency.

Limitations of ERP Inventory Management

ERP inventory management helps an organisation in many ways. However, it also has some limitations. They are:

· Limited customisation

· Expensive

· Not friendly with every type of business like small organisations.

· Harder to fix responsibility as it is a company-wide system that connects all areas

· When all departments in a company are not willing to share information, maintenance of sensitive data can disturb the work flow

2.3 Installing ERP Inventory System

ERP Inventory systems are expensive, and are complex to install. Usually a third party contractor is hired to install the software and hardware, and these vendors who provide installation also suggest consultation and customise the system to the business needs.

However, installation is a tedious task and consumes time depending on the size of the organisation and the requirements of the company. Typically, installing ERP Inventory system takes more than a few months, and larger organisations can take up to a year to install ERP Inventory system.

There are many consulting vendors or firms available in the market to install ERP Inventory system; besides installing the system, they also train the employees to use the installed system.

An ideal installed inventory system should always be able to have answers to the most anticipated questions such as:

· What and how much stock is available in the warehouse?

· What is sold and to which organisation?

· What are the financial issues related to price and margin?

· What orders that are placed, but remains undelivered?

Installation of ERP Inventory systems is complex and not a simple job. However, deploying web based Inventory management ERP is simple and consumes less time for installation.

Failure of ERP Inventory installation

Many times, when installation of ERP software fails, ERP software vendors are held responsible. However installation failure can occur due to the following factors:

· Operating strategy did not suit organisation design and operation.

· The implementation and completion took longer than anticipated.

· Pre-implementation actions were not well planned.

· People were not well ready to learn and operate the new ERP system.

· Cost related issues leads to difficulties in implementing and using ERP Inventory systems.

3. Web ERP

Web ERP has become a necessity for businessmen to be aware of their stock and inventory from anywhere, at anytime. Web ERP is an absolute web-based ERP system that requires only a web browser and PDF reader. It has now become an open source application and is offered as a free download.

Web ERP systems are gaining popularity than ever. It allows businessmen to update their systems in large organisations without the need of installing updates at any remote locations, almost immediately. It provides real time information about finance, inventory, employee management, etc by providing advanced levels of service to consumers and suppliers

3.1 Benefits of Web ERP

Web ERP Inventory system has many benefits. Some of them include:

· It processes data on the server side. Therefore, no installation is required on the client machines.

· It provides Multilanguage support; users can view the interface in their preferred language.

· It provides Multi-theme support; users can view the interface in their preferred graphical theme.

· It runs on any web server and suitable for both high speed and low speed internet connections.

· It can be installed on any device that has internet access.

Web ERP is developed using PHP as a web development language. These scripts are developed with stability and ease so that the application becomes readable with a minimum knowledge of scripting in PHP and the structure of ERP.

The logic is made as clear and simple as possible in order to remove any generalisation from the code, and to make it readable for all kinds of employees. It can also be configured easily on any operating system and the processing constraints required are also economical.

Web ERP has many features that make it suitable for maintaining organisations of different sizes. It provides an easy structure of processing by supporting features such as multiple inventory locations and multiple currencies. .Web ERP maintains all records that provide information like, amount of

inventory stock available, amount of inventory ordered, amount of inventory sold, and amount of inventory that is defective.

ERP Inventory management module takes care of transactional workflow in an organisation in sequential order. ERP Inventory module is subdivided into different modules such as:

· Inventory requisition: The function of inventory requisition is to take the inventory constraints from various departments of an organisation. This is achieved when various departments fill the inventory requisition form. On filling the form, the head of the department fills up the quantity/quality of the inventory required, considering the minimum inventory required, maximum inventory required, and the current inventory available.

· Inventory order assessment: Once the form is filled, inputs are taken from the form and processed. The inventory wanted by the various departments is compared with the minimum inventory required. Once the comparison is done, the final requirement for various departments is fixed and a list of suppliers for the inventory is then formulated.

· Inventory placing: Once the supplier is chosen, an order is placed by filling the order form. The order form has the following information:

- Order date

- Quality wanted

- Transportation mode

- Mode of payment

- Supplier ID

- Department ID

- Price per item

On filling up this information, an order is placed to the supplier.

· Supplier Performa: In this sub module, the supplier provides quotation for further transactions, by filling up the proposal form in which the supplier needs to fill-up the following information such as:

- Quantity and quality of goods they can provide

- Time required to supply the order

- Price they charge for each item

- Modes of payment.

With this information provided by the supplier, further transactions can be carried on.

· Order received: In this sub module, a comparison between order placed and order received is recorded i.e. a comparison is done between Date of placing order with Date of receiving order, and

Quality with Quantity of order placed. Once the comparison is done, the amount to be paid to the supplier and the mode of payment is decided.

· Quality checks: It is necessary to check if the deliverables have met the expected outcome. Therefore, quality check becomes an important phase where Research and Development(R &D) department performs a check and the department head acknowledges it by filling up a quality assessment form.

· Inventory bills and challans: In order to ensure safe payment, bills and challans are chosen to represent the amount paid, payment mode along with the ID of supplier and Receipt ID.

· Minimum inventory assessment: Minimum inventory assessment aims at assessing minimum inventory inputs or requirements from various departments of an organisation. The assessment is done by preparing a Performa which is circulated to various departments and they are expected to fill up their minimum inventory requirements. This assessment is done, considering various factors such as costumers order received, inventory in hand and scrap.

· Minimum inventory requirement: Minimum inventory requirement is the amount of inventory less than which employees cannot work i.e. it is that minimum amount of inventory required to perform any task.

· Maximum inventory assessment: In this sub module an assessment is done for maximum amount of requirements. This information is gathered from various departments to guarantee that no wastage happens. The assessment is done by considering factors such as customers order received, inventory in hand, etc.

· Maximum inventory requirement: It is the amount of inventory which is sufficient to perform any task.

4. ERP Inventory Software Module

Managing inventory is essential for an organisation to regulate the planned production and avoid problems such as running short of inventory or stock. The primary objective of managing inventories is to maintain a balance between the need for product required and product available.

ERP Inventory software module maintains reports of warehouse supplies and keeps track of the transactions that happen to/from the warehouse. It maintains the warehouse taking into account various constraints such as:

· Material request management: An request for materials is made from various departments

· Material Issue: Materials are issued as asked for

· Material Receipt: A receipt is issued from the seller

· Inter warehouse/Location transfers: The materials are moved from the warehouse or within the warehouse

· Stock Valuation: Stock is verified mechanically

5. Summary: Inventory or stock is an important asset of a successful business. Therefore, managing inventory becomes a crucial part for carrying out error free transactions.

ERP Inventory management allows various methods and modules to maintain the required amount of stock in a warehouse. One of the major benefits of it is that changes are automatically updated in the inventory.

Thus, by deploying ERP Inventory systems in organisations, companies are able to integrate information from various units, there by increasing the order issues and providing faster sales and hence proving better customer service by making the systems standardised and centralised.

Thus systems that deploy ERP Inventory management provide a cross functional suite that supports various kinds of transactions, increasing quality and efficiency of supply with decreased costs.

Q -2. Explain the three types of CRM. Briefly explain the functionalities of CRM sub modules.

Answer:

Customer relationship management (CRM) is a widely-implemented strategy for managing a

company’s interactions with customers, clients and sales prospects. It involves using technology to

organize, automate, and synchronize business processes—principally sales activities, but also

those for marketing, customer service, and technical support. The overall goals are to find, attract,

and win new clients, nurture and retain those the company already has, entice former clients back

into the fold, and reduce the costs of marketing and client service.  Customer relationship

management describes a company-wide business strategy including customer-interface

departments as well as other departments.

The three phases in which CRM support the relationship between a business and its customers are

to:

Acquire: CRM can help a business acquire new customers through contact management,

selling, and fulfillment.

Enhance: web-enabled CRM combined with customer service tools offers customers service

from a team of sales and service specialists, which offers customers the convenience of one-

stop shopping.

Retain: CRM software and databases enable a business to identify and reward its loyal

customers and further develop its targeted marketing and relationship marketing initiatives.

Tools and workflows can be complex, especially for large businesses. Previously these tools were

generally limited to contact management: monitoring and recording interactions and

communications. Software solutions then expanded to embrace deal tracking, territories,

opportunities, and at the sales pipeline itself. Next came the advent of tools for other client-interface

business functions, as described below. These tools have been, and still are, offered as on-

premises software that companies purchase and run on their own IT infrastructure.

Often, implementations are fragmented—isolated initiatives by individual departments to address

their own needs. Systems that start disunited usually stay that way: siloed thinking and decision

processes frequently lead to separate and incompatible systems, and dysfunctional processes.

Business reputation has become a growing challenge. The outcome of internal fragmentation that is observed and commented upon by customers is now visible to the rest of the world in the era of the social customer, where in the past, only employees or partners were aware of it. Addressing the fragmentation requires a shift in philosophy and mindset within an organization so that everyone considers the impact to the customer of policy, decisions and actions. Human response at all levels of the organization can affect the customer experience for good or ill. Even one unhappy customer can deliver a body blow to a business.

Sales force automation

Sales force automation (SFA) involves using software to streamline all phases of the sales process,

minimizing the time that sales representatives need to spend on each phase. This allows sales

representatives to pursue more clients in a shorter amount of time than would otherwise be

possible. At the heart of SFA is a contact management system for tracking and recording every

stage in the sales process for each prospective client, from initial contact to final disposition. Many

SFA applications also include insights into opportunities, territories, sales forecasts and workflow

automation, quote generation, and product knowledge. Modules for Web 2.0 e-commerce and

pricing are new, emerging interests in SFA.

Marketing

CRM systems for marketing help the enterprise identify and target potential clients and generate

leads for the sales team. A key marketing capability is tracking and measuring multichannel

campaigns, including email, search, social media, telephone and direct mail. Metrics monitored

include clicks, responses, leads, deals, and revenue. This has been superseded by marketing

automation and Prospect Relationship Management (PRM) solutions which track customer

behaviour and nurture them from first contact to sale, often cutting out the active sales process

altogether.

Customer service and support

Recognizing that service is an important factor in attracting and retaining customers, organizations

are increasingly turning to technology to help them improve their clients’ experience while aiming to

increase efficiency and minimize costs.[6] Even so, a 2009 study revealed that only 39% of corporate

executives believe their employees have the right tools and authority to solve client problems.“.[7] The core for these applications has been and still is comprehensive call center solutions, including

such features as intelligent call routing, computer telephone integration (CTI), and escalation

capabilities.

Analytics

Relevant analytics capabilities are often interwoven into applications for sales, marketing, and

service. These features can be complemented and augmented with links to separate, purpose-built

applications for analytics and business intelligence. Sales analytics let companies monitor and

understand client actions and preferences, through sales forecasting and data quality.

Marketing applications generally come with predictive analytics to improve segmentation and

targeting, and features for measuring the effectiveness of online, offline, and search marketing

campaign. Web analytics have evolved significantly from their starting point of merely tracking

mouse clicks on Web sites. By evaluating “buy signals,” marketers can see which prospects are

most likely to transact and also identify those who are bogged down in a sales process and need

assistance. Marketing and finance personnel also use analytics to assess the value of multi-faceted

programs as a whole.

These types of analytics are increasing in popularity as companies demand greater visibility into the

performance of call centers and other service and support channels, [6] in order to correct problems

before they affect satisfaction levels. Support-focused applications typically include dashboards

similar to those for sales, plus capabilities to measure and analyze response times, service quality,

agent performance, and the frequency of various issues.

Integrated/Collaborative

Departments within enterprises — especially large enterprises — tend to function with little

collaboration.[8] More recently, the development and adoption of these tools and services have

fostered greater fluidity and cooperation among sales, service, and marketing. This finds expression

in the concept of collaborative systems which uses technology to build bridges between

departments. For example, feedback from a technical support center can enlighten marketers about

specific services and product features clients are asking for. Reps, in their turn, want to be able to

pursue these opportunities without the burden of re-entering records and contact data into a

separate SFA system. Owing to these factors, many of the top-rated and most popular products

come as integrated suites.

Small business

For small business, basic client service can be accomplished by a contact manager system: an

integrated solution that lets organizations and individuals efficiently track and record interactions,

including emails, documents, jobs, faxes, scheduling, and more. These tools usually focus on

accounts rather than on individual contacts. They also generally include opportunity insight for

tracking sales pipelines plus added functionality for marketing and service. As with larger

enterprises, small businesses are finding value in online solutions, especially for mobile

and telecommuting workers.

Social media

Social media sites like Twitter, LinkedIn and Facebook are amplifying the voice of people in the

marketplace and are having profound and far-reaching effects on the ways in which people buy.

Customers can now research companies online and then ask for recommendations through social

media channels, making their buying decision without contacting the company.

People also use social media to share opinions and experiences on companies, products and

services. As social media is not as widely moderated or censored as mainstream media, individuals

can say anything they want about a company or brand, positive or negative.

Increasingly, companies are looking to gain access to these conversations and take part in the

dialogue. More than a few systems are now integrating to social networking sites. Social media

promoters cite a number of business advantages, such as using online communities as a source of

high-quality leads and a vehicle for crowd sourcing solutions to client-support problems. Companies

can also leverage client stated habits and preferences to -target" their sales and marketing

communications.

Some analysts take the view that business-to-business marketers should proceed cautiously when

weaving social media into their business processes. These observers recommend careful market

research to determine if and where the phenomenon can provide measurable benefits for client

interactions, sales and support. It is stated that people feel their interactions are peer-to-peer

between them and their contacts, and resent company involvement, sometimes responding with

negatives about that company.

Non-profit and membership-based

Systems for non-profit and membership-based organizations help track constituents and their

involvement in the organization. Capabilities typically include tracking the following: fund-raising,

demographics, membership levels, membership directories, volunteering and communications with

individuals.

Many include tools for identifying potential donors based on previous donations and participation. In

light of the growth of social networking tools, there may be some overlap between social/community

driven tools and non-profit/membership tools.

Strategy

For larger-scale enterprises, a complete and detailed plan is required to obtain the funding,

resources, and company-wide support that can make the initiative of choosing and implementing a

system successful. Benefits must be defined, risks assessed, and cost quantified in three general

areas:

Processes: Though these systems have many technological components, business processes

lie at its core. It can be seen as a more client-centric way of doing business, enabled by

technology that consolidates and intelligently distributes pertinent information about clients,

sales, marketing effectiveness, responsiveness, and market trends. Therefore, a company must

analyze its business workflows and processes before choosing a technology platform; some will

likely need re-engineering to better serve the overall goal of winning and satisfying clients.

Moreover, planners need to determine the types of client information that are most relevant, and

how best to employ them.

People: For an initiative to be effective, an organization must convince its staff that the new

technology and workflows will benefit employees as well as clients. Senior executives need to be

strong and visible advocates who can clearly state and support the case for change.

Collaboration, teamwork, and two-way communication should be encouraged across hierarchical

boundaries, especially with respect to process improvement.

Technology: In evaluating technology, key factors include alignment with the company’s

business process strategy and goals, including the ability to deliver the right data to the right

employees and sufficient ease of adoption and use. Platform selection is best undertaken by a

carefully chosen group of executives who understand the business processes to be automated

as well as the software issues. Depending upon the size of the company and the breadth of

data, choosing an application can take anywhere from a few weeks to a year or more.

Implementation

Implementation issues

Increases in revenue, higher rates of client satisfaction, and significant savings in operating costs

are some of the benefits to an enterprise. Proponents emphasize that technology should be

implemented only in the context of careful strategic and operational planning. Implementations

almost invariably fall short when one or more facets of this prescription are ignored:

Poor planning: Initiatives can easily fail when efforts are limited to choosing and deploying

software, without an accompanying rationale, context, and support for the workforce. In other

instances, enterprises simply automate flawed client-facing processes rather than redesign them

according to best practices.

Poor integration: For many companies, integrations are piecemeal initiatives that address a

glaring need: improving a particular client-facing process or two or automating a favored sales or

client support channel. Such “point solutions” offer little or no integration or alignment with a

company’s overall strategy. They offer a less than complete client view and often lead to

unsatisfactory user experiences.

Toward a solution: overcoming siloed thinking. Experts advise organizations to recognize the

immense value of integrating their client-facing operations. In this view, internally-focused,

department-centric views should be discarded in favor of reorienting processes toward

information-sharing across marketing, sales, and service. For example, sales representatives

need to know about current issues and relevant marketing promotions before attempting to

cross-sell to a specific client. Marketing staff should be able to leverage client information from

sales and service to better target campaigns and offers. And support agents require quick and

complete access to a client’s sales and service history.

Adoption issues

Historically, the landscape is littered with instances of low adoption rates. In 2003, a Gartner report

estimated that more than $1 billion had been spent on software that was not being used. More

recent research indicates that the problem, while perhaps less severe, is a long way from being

solved. According to CSO Insights, less than 40 percent of 1,275 participating companies had end-

user adoption rates above 90 percent.

In a 2007 survey from the U.K., four-fifths of senior executives reported that their biggest challenge

is getting their staff to use the systems they had installed. Further, 43 percent of respondents said

they use less than half the functionality of their existing system; 72 percent indicated they would

trade functionality for ease of use; 51 percent cited data synchronization as a major issue; and 67

percent said that finding time to evaluate systems was a major problem. With expenditures

expected to exceed $11 billion in 2010,[16] enterprises need to address and overcome persistent

adoption challenges. Specialists offer these recommendations for boosting adoptions rates and

coaxing users to blend these tools into their daily workflow:

Choose a system that is easy to use: not all solutions are created equal; some vendors offer

applications that are more user-friendly – a factor that should be as important to the decision as

is functionality.

Choose appropriate capabilities: employees need to know that the time they invest in learning

and in using the new system will not be wasted, indeed that it will yield personal advantages;

otherwise, they will ignore or circumvent the system.

Provide training: changing the way people work is no small task; to be successful, some

familiarization training and help-desk support are usually required, even with today’s more

usable systems.

Lead by example: upper management must use the new application themselves, thereby

showing employees that the top leaders fully support the application – or else it will skew the

ultimate course of the initiative toward failure, by risking a greatly reduced rate of adoption by

employees

Q - 3. Describe how you would go about the different phases of the ERP implementation lifecycle, if it were being done in your company.

Answer:

Every company‘s ERP implementation has a life cycle—often extending 10-20 years.

Product Evaluation

As the company goes through a detailed process to select an ERP package, training is often treated as an afterthought. The software vendor will assure you that the details can wait, and that the project budget should include a substantial amount for project team training.

There is no ―magic number for the percentage of the total ERP implementation budget that should be allocated for training.

Many clients are aware of a Gartner Group research paper that stated ―companies allocating less than 13 percent of project costs to training are three times more likely to have their ERP projects fall short of business and project goals compared with companies that spend 17 percent or more on training .―1

Gartner‘s report was issued a decade ago. I feel that 17% is too high, and better guidance is available from Cushing Anderson of IDC. His research shows that ―projects allocating 7% of the budget to training were significantly more successful than projects where only 4% of the budget went to training. My advice is to take a hard look at the training component of your ERP implementation budget. Realize that you‘ll need training for your executives/senior management, project team, and end users. Be prepared to look for alternatives to vendor supplied training. You can often spend less and get more benefit by working with firms that specialize in training for your ERP package.

This phase is also the right time to start thinking about purchasing a software package to enable creation of end-user training and documentation materials. From one capture process, multiple types of materials can be created, such as: interactive simulation lessons, live help, ―cheat‖ sheets (job aids), detailed end-user documentation, and training manuals for classroom training. There are literally hundreds of software platforms that play in the end-user space.

Before we leave this first phase, here are a few thoughts on how to increase the ROI of your ERP project. Most clients underestimate the cost of outside consulting services during the ERP life cycle. Consulting fees can be as much as 60% of the total project cost. The best way to contain and reduce those costs is to ensure that your team has the knowledge they need to independently configure, test, and run the ERP system. That typically means bringing outside expertise in house as employees, and proper training of key team members and end users.

Implementation – Phase I

The first phase of an ERP implementation, where your company goes live for the first time, is the most demanding in terms of the variety of audiences, and the sheer quantity of learning that must occur.

I‘ve grouped employees and their training needs as follows: Executives and Senior Management Project Team Super Users & End Users

Executives and Senior Management

This group is often skipped over in the rush to get the implementation started quickly. That would be a mistake; executives and senior management need to understand what they are in for—both in terms of future benefits and implementation challenges in the months ahead. You will probably have a relationship with your ERP vendor for the next 10-20 years—so top management needs to get involved at the beginning.

A two-day session on the following topics is highly recommended:

An ERP package-specific overview of key functionality, benefits, and likely impacts on your organization

Understanding the role of Executives and Senior Management

Best practice implementation methodology

Governance and Organizational Change Management—how to realize and measure value (i.e., return on investment) from the ERP project

Accelerating buy-in from key stakeholders

I also recommend spending the day after this 2-day session on a simulation game specific to your ERP package. Playing a competitive simulation game with the real software is a great way to kick off a project. Invite the project team and the trainer from the first two days to participate as well. At the end of the day, debrief the entire group on key points learned during the entire three days.

Handled skillfully, these three days result in two critical accomplishments:

Top management understands how the software will drive change within the company.

The project team understands the overall goals of the ERP implementation and how the ERP solution is a part of the overall company strategy.

Executive management is responsible for the success or failure of the ERP project. Both the project as a whole and the training component of the project need to be driven by the overall corporate strategy.

When that happens, top management has started to take ownership of the ERP solution, and the ERP project will have a much better chance of success. Depending on the complexity of the implementation and the size of the company implementing, it may be useful to conduct a second tier overview training session as part of the selection process. Senior, non-executive, management can best judge how the potential solution can support their company's strategic operating objectives.

Project Team Training

Project team training is a must at the beginning of the implementation. Phase I might include General Ledger, Accounts Payable, Inventory, and Procurement. Or you might be doing a ―big-bang roll out where all of Financials, Logistics, and Manufacturing are scheduled to go live at the same time.

Your project team needs configuration-level training on all the core application modules being implemented. The focus should be on utilizing the software to complete end-to-end business processes such as order-to-cash, or procure-to-pay. Technical training needs include report writing, development, and system administration.

Training must be closely related to the overall corporate strategy. The ERP solution should be framed in terms of supporting the operational objectives that, in turn, support the corporate strategy. Early project team training is the best way to begin the process of combining your company expertise with external consultants' ERP expertise to arrive at the best-fit solution. You won‘t ―learn everything‖ that the software does, but if your consultants are experienced enough, they will teach you the basics plus the functionality most relevant to your business issues.

Beyond configuration of specific functionality within a module, project team training should also focus on the integration between different modules within the overall business process.

Tip: Avoid sending your project team to week after week after week of training without the chance to use what they‘ve learned in a prototyping/conference room pilot environment. Two weeks in a row is the absolute maximum to schedule anyone for classes. Schedule training on a ―just in time‖ basis, just before the course content will be project tested.

End-User Training

Back-schedule end-user training development from your go-live date. Early on, do a rough-cut timeline so there are no surprises later. This should consider the number of users to be trained by business process, a list of work procedures that require training, estimated time for each class, sequence of training classes, facilities needed, and the need to train as close to go-live as possible. Involve both professional course developers/instructors and key business users in a train-the-trainer model for end-user training delivery.

Use a combination of live, instructor-led classes; virtual, instructor-led classes; and eLearning content. Arm your end users with Quick Reference Cards and online access to ―how to‖ information. Have end users start to use what they‘ve learned by involving them in testing the software before going live.

After going live, have your internal help desk track excessive numbers of calls and respond with additional training where needed.

The main objective of end user training is for end users to become autonomous in using the ERP system to accomplish their daily work tasks. Too much information at the beginning is counterproductive. Rather, after a six-month period of being live with the solution, users can benefit from a fuller discussion of alternatives within the software. They will be more able to ask questions that pertain to real problems they've encountered.

Tip: Consider sending your internal end-user training team to a series of detailed transaction-based courses (as opposed to configuration courses), so that the internal project team will then be able to develop a high percentage of the end-user training materials in-house. That will reduce the expense of contracting out end-user training development and execution to an outside firm.

Knowledge Transfer

All consulting firms ―talk the talk‖, but do they ―walk the walk‖ when it comes to knowledge transfer? Are they really committed to getting the job done (i.e., getting your team to the point where they can independently solve problems) or do they view you as a source of uninterrupted revenue for years to come?

Steve Phillips, in his excellent blog titled: ERP Consultants: Is the Promise of Knowledge Transfer Just Part of the Sales Pitch?, discusses 17 steps clients can take to ensure that knowledge transfer actually takes place. Knowledge transfer needs to be a part of the project deliverables that clients sign off on during the implementation.

How about this for a radical idea? Tell your project team and end users that you expect them to be so knowledgeable that the consultants don‘t need to be onsite for the go-live. Of course, experienced consultants will always have a lot more experience than 90% of all clients on a project, so you might want them around to help your team handle unforeseen issues when you go live.

Change Management

Executive/Senior Management training should also include an exploration of their role in the roll-out – particularly in supporting the change management process.

This is also the right time to continue to recruit executive sponsors or phase/module leaders - getting key influencers to volunteer to participate is contagious.

The project team also needs change management training. Specifically, understanding the project management process – time lines, status reports, how to report issues, resolution steps (how to identify, classify, report, track, resolve and close issues).

Here is where the project team becomes advocates - they should be encouraged (and trained) to identify how project management processes can be improved further. A communications plan for identifying milestones and successes should be put in place. Site visits to other client sites for key Executives, Senior Management, and project team members are an excellent way to learn what works (and doesn‘t work) in the real world of a major ERP implementation.

Implementation – Phase II and Beyond

A major ERP implementation can be spread out over multiple phases taking several years to fully implement the software. New implementation team members come on board, new end-user departments start using the software, and more advanced knowledge is needed on modules that have been live for a while.

Training new employees is important. ―Knowledge leakage‖ is a phrase coined by Cushing Anderson of IDC, to describe the fact that IT skills can quickly degrade—as much as 50% in just six

years, due to factors such as employee attrition, failure to fully train new hires, and changes in the technical environment.4

4 The Silent Killer: Knowledge Leakage and the Impact on Technical Skills, Cushing Anderson, IDC. Cushing provided these practical suggestions on what to do about knowledge leakage:

―During the prototyping phase - organizations should identify ‗how skillful‘ their teams need to be to get the benefits promised by the system - then train to that goal for project teams and users

Understanding this level of "performance" makes identifying the signs of knowledge leakage easier – every year, every user takes (one or more) short, task specific quizzes on how to perform certain tasks –the ‗team‘ needs to score to some benchmark - and individuals have to meet some minimum threshold. Alternatively, measuring output based metrics (processing time for invoices, error rates for order entry, etc.) might also signal leakage, but be more easily monitored, and might already be collected for other performance management activities

Periodic team updates can bring new team members on board the right way as well as refreshing the knowledge base of the experienced team members.

Tip: Onsite configuration level training is a good fit during this phase. Classes are most effective when your team gets a 360-degree view of the full functionality of the software, combined with being able to drill down for extended details on the most pertinent topics.

Extending Value

Financials used to be considered the ―back-office‖ solution. Now, the entire ERP suite of financials, logistics, manufacturing, and HR is considered the ―back-office. The stuff includes Advanced Planning, customer and vendor facing applications such as self-service, CRM, SRM, and decision support applications such as Business Intelligence/Dashboards/etc.

Take advantage of internally generated information, such as help-desk incident monitoring and refresher/team evolution training, to identify projects with the greatest opportunity for extending the value of the ERP solution.

Additional knowledge in the form of articles and white papers, can be obtained at low cost from your software vendor and from independent publications such as JDEtips Journal and ERPtips Journal.

Before new applications or upgrades go live, you‘ll need to train end users on the new functionality being implemented.

Tip: All of these additional software applications are implementation projects in themselves. Training on new applications continues to add value to the overall ERP solution.

Maintaining Value

This phase, combined with the Extending Value phase, occupies at least 50% of the lifetime of an ERP solution. This is when an actual return on investment occurs, if it will occur at all. Training is centered on fine-tuning the organization‘s overall knowledge base. Turnover in key staff positions is one of the main reasons for continued training requirements.

Responsibility for on-going training should be assigned to a specific group. New hires and employees with new job responsibilities will need to be trained on the ERP software.

Tip: Most configuration-level training needs during this period can be handled by attending public classes conducted by training vendors. End users can continue to be trained by internal key business users (Super Users).

Declining Value

The writing is on the wall, and ―everyone‖ knows that a major re-evaluation of the ERP solution is coming up in the next year or two or three. Very little investment in the current ERP solution occurs, and almost no training is scheduled.

ERP software evolves, and clients should evaluate the new functions and operational improvements of the installed ERP solution as they are added by the software vendor. The company will then have better information about the cost-benefit of evolution vs. starting over.

If you are looking at a major upgrade to your current ERP solution, is the time right to open the door to additional vendors, and begin the dance again?

Tip: As you prepare to go through the ERP Lifecycle again, have you documented the lessons learned during the current lifecycle? What did you do right? What could have been done differently and better (hopefully)?

Bonus Tip: Did you start analyzing what went right and what went wrong a long time ago?

Non-Phase Specific Notes:

ERP training should be part of an overall employee performance management program. ERP clients may thrive by creating a Center of Excellence (COE) and tying together their training, upskilling, and documentation in one integrated offering, which requires investment, but also reduces dependency on outside consulting.

Virtual, instructor-led training (VILT) can be effective in most of the phases described above. I would not recommend it for executive management overviews, but it can be an alternative delivery method for project teams and end users.