The ERP Life Cycle

 
 
By Andy Klee  |  Posted 2005-06-01 Email Print this article Print
 
 
 
 
 
 
 

Is it worth thousands of your staff's hours to evaluate an ERP package to the nth degree, or is there a better way?

Is it worth thousands of your staffs hours to evaluate an ERP package to the nth degree, or is there a better way? As the CEO of a J.D. Edwards and SAP services company, I believe Ive found a better way.
First, bring someone in and have him or her conduct a one-day workshop with the executive VPs at your company to hammer out the key requirements.
Then, issue an RFP to 10 prospective vendors and ask them to respond with screen shots and text describing how to handle each key requirement.

Rank the responses, and tell the top three they have one day to demo their stuff in front of your key execs and IT staff. Talk functionality and technology. And talk corporate cultures. The fit neednt be perfect—90 percent will do. Congratulations, youve embarked on the first stage in the enterprise resource planning life cycle. Here are lessons for the remaining stages:

Training: Ask your training provider to give your implementation team an on-site four- or five-day overview of the entire software solution, encompassing the modules you are implementing. The objective is to give you enough training to get started setting up the model of how your business will run with the new software. Save the more advanced topics for later.

Implementation: Youve gone live with a portion of your total solution—unless you did the big-bang approach where you go live with financials, logistics and manufacturing all at once. After a rough go-live period, things have settled down for six months.

Re-evaluation: This might be a good time to re-evaluate your implementation partner, whether it be the software vendor or an independent consultancy. If you werent happy with the provider during the initial rollout, you arent likely to be happy in the future. At the very least, get one or two other estimates for the next step.

Extending value: It can take several years to extend your ERP system with such modules as supply chain management, CRM and business intelligence.

Maintaining value: You are five to seven years down the road from that rosy dawn of your ERP solution. You should try to get another five to 10 years of life out of the system. Business needs change, so you should make enhancements to add incremental functionality.

Cutting costs: One day you notice youve been paying 22 percent of the current software price, not 22 percent of the discounted price you paid, for annual maintenance. You may find a third-party maintenance company offers a better deal.

Declining value: Time passes, and the dollar savings are adding up, but your business continues to change. Its time to appoint a new ERP czar for your next swing through the ERP life cycle.

Andy Klee is president of Klee Associates Inc., which publishes the JDEtips and SAPtips journals at www.ERPtips.com and offers consulting, training, permanent placement and third-party maintenance services. Free Spectrum is a forum for the IT community and welcomes contributions. Send submissions to free_spectrum@ziffdavis.com.

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