Partner - How to use ERP for your Organisation?

What is ERP ?

Why before How

• What is the desired outcome of Implementing an ERP?
• What sort of Reports and/or Dashboards do you want?
• What are the challenges that you would like to overcome?

• Too much chaos: Business can be chaotic. Coordination between multiple entities and agencies can be daunting, leading to financial loss or loss of motivation in employees.
• Delayed Deliveries: Deliveries get delayed due to various reasons, most common amongst them is coordination between various departments, mainly Production and Sales.
• Stock Issues: Overstocking or under-stocking can hamper an organization’s profitability and service.
• Quality Issues: Quality issues can hamper an organization’s image and even lead to financial loss.

1. Centralized Data System
2. Clear Communication Processes
3. Reliable Analytics

How an ERP can help

Typical Process Flow

Typical Sales Cycle

How to use an actually use ERP

• Define the processes and objectives of the business based on which decide the reports and dashboards required to attain the objectives.
• Define the modules that will record the required data. If the reports are not ready, prepare the reports in a simple spreadsheet/excel format with the needed headers.

• A few supplier names(3-4 to begin with)
• Raw material details like- item code, Item name and unit of measurement
• A warehouse where Inventory will be stocked

• Once the configurations are in place simulate a trial cycle with all stakeholders and take note of gaps if any with the current solution provided by the software.
• Discuss with an ERP consultant how these gaps can be bridged.
• General sequence of Trial Cycle can be as below
  • • Purchase
    • Sales
    • Manufacturing
    • Inventory
    • Accounting
    • Support
    • Human Resource

• • Training ensures there are fewer hindrances in the implementation process. The end-users of the software need to be included in the process as early as possible.
  • If the end-users do not use the system correctly, the whole purpose of an ERP is defeated.
  • The users should be trained department or module wise.
  • Change for any person is hard therefore it should be kept in mind that training should be simple and easy at the beginning. A big bang approach may demoralize the users and jeopardize the adoption.

• • All required masters-Item, Customer, Supplier, and Employee need to be loaded
  • Data migration helps in smooth transitioning and future utilization of the software

• • • Duplicates: Make sure there are no duplicates. For example: Customer called Acme Inc cannot be mentioned twice in the Masters. Also Acme Inc with different spellings may exist in the legacy system. This is a good time to remove all duplicates and import correct data to the system. This will improve the reporting.
    • Data Completeness: Make sure all the data is included while migrating the data. Having simple checks like Total number if Customers and tallying it with the imported data will ensure complete data is migrated.
    • Data Integrity: This is important for data that involves financials and other numerical values that need to tally based on the business logic. Check your Accounting data for integrity by applying simple checks to make sure the data being migrated is correct
    • Dependencies: Make sure the data is migrated in the right order. For example: Item Master needs to be imported before Bill of Material (BOM) can be uploaded

• • Once the users have been trained, the company should parallel run the new ERP system with the legacy system for at least 15 days
  • This will give users a real-life practical experience of the software and a chance to figure out any edge cases that may have been missed out
  • Things to keep in mind for parallel run are as follows
    • Don’t be stuck with the way your software should work. Try to work with the software as it is unless it is a show-stopper. Making changes to software can be time and cost consuming
    • Don’t try to address the most complex scenarios first, thinking complex scenarios will take care of simple ones as well. You will end up confusing yourself and the Implementation team. Try adding complexity gradually and tackle it smartly with your Implementation team’s advice
    • Don’t treat Parallel Run as a side project. This is as critical as your daily operations. An ERP is going to be a mission critical part of your organization once it goes live. It’s success depends highly on its adaption by the user and thus parallel run is equally important. Take out one hour per day for practice.

• • In this phase, a new instance with the latest Masters, Opening Balances, and Configuration is prepared for go-live
  • A final set of testing on Live instance is performed before going live
  • In order to plan a smooth Go-Live, it is important to allocate at least 2 weeks to this phase