Reasons for ERP Software project delays

ERP Implementation

ERP Implementation

Evidence suggests that majority of ERP software projects are delayed or doomed by cost overturns.  Even when ERP projects are completed on time or within budget, users often complain that the software they have paid for does not meet their expectations in terms of quality, or features or both.

In other words, a great deal of software that is developed never gains user acceptance.  No respectable field of engineering has comparable failure.  That would be a catastrophe, and construction and automotive engineers would not make a living!

  • Why does the distinguished software industry have such an abysmal track record? A big part of the answer is ‘scope definition’, a phenomenon that causes users to be highly inconsistent and unpredictable, about what they wish their software to do. Experienced software engineers often say that users are notorious for their inability to clearly articulate their expectations from software. As a result, it is alarmingly common for the development (construction) of software applications to begin with insufficient requirements and ambiguous specifications.
  • ERP project is taken as ‘by-the-way’ project whereas in true sense it should be the only priority during implementation phase.
  • And because software is intangible (impossible to see and touch) while it is under development (unlike other forms of construction such as bridges and cars), it is commonplace for needs to keep evolving as the software gets built. With every round of change and clarification. The scope of the project changes (as earlier assumptions are negated and new ones introduced). And timelines are pushed out to accommodate new expectations. This is analogous to building a house for which the architectural design keeps shifting with the changing priorities of the owners. Human experience suggests that moving-targets do not lend themselves to happy outcomes. And so it is with the timelines and budgets of numerous ERP projects.
  • Untreatable as it may seem on the surface, scope creep (changes) is an eminently treatable problem. For example, world-class ERP organizations now employ the use case method to manage user requirements. Instead of asking users what features they want in their software, the user case method guides them to describe their current and future processes and behaviors in terms of stories and scripts (much like playwrights write plays) that are stuffed with actors, actions and entity. It turns out that humans are fundamentally better at narration than specification, and the requirements that originate from this method are decidedly more robust.
  • Further, the software implementation and development process has itself become less linear and more cyclical. These days, large ERP projects are broken down into a series of short, burst sprints that last between 30-60 days each.  Sometime, module wise implementation helps building up confidence.
  • Only a small set of requirements are addressed in each sprint, and no changes in scope are permitted while a sprint is progress. Finally, users themselves play an active role in software evolution. As each iterative cycle draws to a close, representative users (or focus groups) interact with the ‘live’ (albeit partially complete) system, and provide critical feedback. The feedback is analyzed, course corrections engineered, and scope creep managed in a controlled fashion.
  • Software engineers are devising early warning systems that will allow them to predict well in advance how serious the downstream effects of unmanaged scope creep can be. An innovative measure that is gaining currency is the requirements clarity indicator, a metric that allows a panel of software experts to review a set of project requirements early in the life-cycle and determine how well the stakeholders even understand what they want from their stability indicator. Low scores on requirements clarity or requirement stability ought to be sufficient to assume that a project is headed for serious trouble.
  • In conclusion, scope creep remains a major threat to the success of every software project.

However, its impact can be minimized by leveraging best practices that are part of the emerging repertoire of leading IT organizations. Good software engineering is all about deciphering what users need, and not getting distracted by what they demand. It is also about managing scope creep intelligently. Use cases, iterative sprints, task group feedback, as well as indicators that measure requirements clarity and stability allow modern software engineers to do just that.

Above write-up is based on Jyoti Zaveri’s experience of software development and software projects implementation experience.

Domain Knowledge

Domain Knowledge is the knowledge of a particular industry

domain

Domain knowledge is the knowledge about the environment in which the business organizations operates, and it encompasses the understanding of the industry dynamics, history, sectors and segments, business model, competitive landscape, value chain, customers, supply chain, challenges and the industry specific strategies of the target enterprise.

Domain knowledge is necessary because it provides the ability to make good judgments and quick decisions and empower the users to deal with complex business situations.  For implementing e-commerce project it is necessary to learn about the business that you are trying to automate on the internet.  Gaining understanding of the industry means a smarter analysis, clearer logic underlying business decisions, closer attention to key dimensions of implementation and operation, and more disciplined performance management.

On the lighter side, here is a joke:

Get Domain expertise

Get Domain expertise

There was a family with one kid. One day the mother was out and dad was in charge of the kid, who just turned three.

 
Someone had given the kid a little ‘tea set’ as a birthday gift and it was one of her favourite toys. Daddy was in the living room engrossed in the evening news when kid brought Daddy a little cup of ‘tea’, which was just water. After several cups of tea and lots of praise for from father for such yummy tea, kid’s Mom came home.
 
Dad made her wait in the living room to watch the kid bring him a cup of tea, because it was ‘just the cutest thing!!’
 
 
Mom waited, and sure enough, the kid comes down the hall with a cup of tea for Daddy and she watches him drink it up, then she says to him, ‘Did it ever come to your mind that the only place that baby can reach to get water is the toilet??’
….Mothers know!
 
Moral Of The Story:  Domain knowledge is very important!  Else your project may fail.

Communicating between end-users and software developers is often difficult. They must find a common language to communicate in.  It is necessary to learn the jargon (vocabulary)  to communicate effectively.   The consultant may play an important role to bridge the gap between business executives and software engineers.

Examples of Domain Knowledge that may require for a project in the respective business category.
  • Automotive Domain.
  • Banking Domain.
  • Education Domain.
  • Engineering Domain.
  • FMCG Domain.
  • Retail Domain.
  • Telecom Domain.
  • Travel Domain.

In ERP / e-commerce project, domain knowledge is knowledge about the environment in which the target system operates. Domain knowledge is important, because it usually must be learned from software users in the domain (as domain specialists/experts), rather than from software developers. Expert’s domain knowledge is transformed in computer programs and active data, for example in a set of rules in knowledge bases, by knowledge engineers.

SAP ERP in Indian National Language – Hindi

Don’t say साँप – Pronounce as एसएपी

 

It is no hidden truth that Hindi, the official Indian language and the preferred language of transaction for over 40% of the population. Specifically in the public sector, there was the need for solutions that helped the Hindi-speaking workforce work in their own language.  SAP has pitched its Hindi ERP solution in the Indian market with an eye on the Hindi belt.

English: The word "Hindi" in the Dev...

English: The word “Hindi” in the Devanagari script. (Photo credit: Wikipedia)

The solution will surely set a precedent for various vendors to beef up work on the availability of software in local languages.  It will allow companies to employ Hindi-speaking people, thereby opening a pool of job opportunities. Vendors like Microsoft are already offering their operating system and office suite in the local language for quite some time now. It would be interesting to see if competitors like Oracle, Salesforce, etc also jump into the fray.

SAP seems to have seen a good opportunity in the burgeoning public sector where immense automation drive is on.   SAP also admits that the increased pace of adoption of the SAP ERP in the Government sector spanning across the Central, State, Public Sector Enterprises, Utilities, Municipal Corporations, Railways, Defense, Airports and Shipping, led SAP to localize its software to address local requirements of customers .

SAP ERP in Hindi will help to address areas such as Logistics including India taxation, accounting, employee data, and provident fund, Payroll including pay-slip, loans, claims and Employee Self Services.

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Let us discuss:  Join LinkedIn group and Facebook Group focusing on ERP

–  Managed by Jyotindra Zaveri, ERP Consultant and ERP Trainer.

Will localize solution help unlock the domain knowledge and expertise that exists at user level in India?  What do you say?

ERP Job and mistakes ERP Certified professionals make.

Powerful career tips written by Jon Reed ,The SAP Mentor and the Founder of JonERP.com , and Produced by ERP Consultant Mostafa Al-aqeely. On the most common mistakes that SAP job seekers make.

Video courtesy http://www.youtube.com/user/MrMostafaEid/videos

ERP Vendors

ERP Vendors

ERP vendors:  There are hundreds of software companies offering ERP solutions.  There are two kinds of ERP companies.  (1) ERP software developing organizing and (2) ERP implementing partners.

ERP vendor companies:  SAP, Oracle, Microsoft Dynamics (Navision), Sage ERP, DNS ERP, Telly ERP, and so on.

ERP implementer partners:  Siemens InfoTech, PwC, Infosys (recent acquisition of Axon, for instance), etc.

What is the difference between SAP and ERP?

This is wrong question.  It is like asking, “What is the difference between a car and Honda Accord?”  Honda Accord is one of the models of cars.  Car is a generic name given to vehicle.  Similarly, ERP is generic name given to enterprise management integrated software.

SAP Certification:  No doubt, SAP is considered as # 1 and learning SAP ERP will be a feather in your cap, however, (first you need the cap).  Many students are carried away by the SAP brand name without understanding that, just by sitting in the Mercedes car, you can’t learn driving.  Make sure that ERP certificate is backed by adequate practical training and at least two years of work experience.  A fresher with an SAP certificate is a sad joke!

Please note that SAP is a well-known, leading ERP company in the world.  But, SAP is not the only ERP vendor.  There are many ERP companies.  SAP is a specific name of the one of the companies, which has developed ERP software.  Therefore, it is wrong way to ask, “What is the difference between SAP and ERP?”  One may ask a question, “What is the difference between SAP and MS Dynamics?”?  That makes more sense.

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Hope you will Like this post.   Please do not forget to subscribe to this ERP Blog.  This post is important based on many emails received from frustrated ERP [so-called]  Certified  software engineers.   Leave your comments below and share with your contacts who you think will benefit by this post.

 

Additional resource to learn ERP

Join ERP Groups on Facebook and LinkedIn and Follow on Twiiter

Join ERP Groups on Facebook and LinkedIn and Follow on Twitter

Connect and regularly access to get many valuable benefits that these sites provides.

Learn CRM, Supply chain management and Enterprise Resource Planning software.  This web sites are good reference for various key functions managers, such as accounts, purchase, sales, production, etc.  It is not just additional resource but also a companion sites for corporate commandos.

Join Facebook ERP group

Let us discuss ERP, any ERP.

https://www.facebook.com/groups/discuss.erp Join Facebook Group ERP

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Join ERP LinkedIn group

Join ERP LinkedIn group

http://linkd.in/lFj98r Join LinkedIn Group ERP, E-business Forum

Follow @followERP on Twitter

Follow @followERP on Twitter

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ERP training videos

Subscribe. ERP training videos on YouTube. Over 100 K video views.

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Follow on Scribd - ERP PowerPoint presentations.  Over 100 K reads.

Follow on Scribd – ERP PowerPoint presentations. Over 100 K reads.

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Follow on slideshare.  ERP presentations with videos

Follow on slideshare. ERP presentations with videos

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Created for e-Learning by Jyotindra Zaveri, ERP Consultant & Trainer. 

Connect and regularly access to get many valuable benefits that DNS provides.  Do not forget to subscribe to his blog to get automatic email whenever we publish new post.  If you Like it Share with other.  

  

ERP Lecture in Germany

ERP Lecture in Germany by Zaveri

International Faculty

I am glad to inform you that I was invited to give a lecture on the subject of ERP in Germany.  It was a great experience to discuss with German students.

Here are the glimpse of the ERP lecture:

The presentation that I used for my lecture at the university is also published on this blog.  Here is the link  https://dnserp.wordpress.com/erp-presentation-32-erp-modules

I will appreciate your feedback.  If you Like it Share it.

Year ends on March 31- Due priority should be given by all stakeholders

Year-end procedure.  In India, the accounting year is April to March.  Accounting year 09-10 has ended on 31st March 2010.  Important procedure is given below to plan the ‘year ending’ in ERP.  The following procedure for ERP rollout is very important.  Due priority should be given by the stakeholders.

The procedure will vary depending on your current status as follows:

1.    ERP status is ‘go live’.  Users are online and entering transaction in real-time.  The closing stock was already entered.

2.    ERP is being implemented.  Conference Room Pilot (CRP) run is done.  You have to  decide on the cut-off date.  You may think of considering 31/03/2012 as cut-off date, or any suitable date.  The day after the cut-off date, users go online.  That is ‘Go live’, and embraces New Year 2012-2013 with more accuracy in inventory management and tighter discipline.   There are two kinds of closing balances that are required:

Accounts closing balance:  Debtor.  Creditors.  Closing balance of stock.

It is important to note that both inventory and accounts are tightly linked in ERP.

·         FAQ: “Can we enter creditor / debtor balance and closing stock, later?”  The answer is NO.

1.    Before doing anything take backup.  Copy on once writable CD; take the backup media to another location (different building).

2.    Task:  Enter closing stock for Inventory items.

3.    Count stock.  This exercise should be done very carefully.  This is important for ‘going-live’.

4.    Enter the closing stock, as on the cut-off date, from that date onwards, ERP will prepare the inventory related books, as well as accounts books, automatically.

5.    E.g. closing balance as on March 31, mid night is opening balance for April 01.
6.    Task: Enter ALL items in the item master.
It is strongly recommended that for EACH location stock balance be taken.  E.g. stores, rejection location, scrap location, WIP (work-in-process), third party (subcontractor location), etc.

7.    Task: Take location master printout (excel sheet showing all locations) from the ERP (not from Tally).  The list will also show names of subcontractor locations.

8.    Bought out items, raw material, consumables, spares, etc.  Items that are supplied by vendors (supplier).

9.    Sub-assemblies, semi-finished goods, factory made item, etc.  This may include items that are received from third party, if it is semi-finished goods. (WIP).

10.  Finished Goods, (FG or product that usually appears in the sales invoice).

11.  Task: Prepare the Item list using ERP software instant excel sheet option.  You can prepare category, sub-category wise, separate list.  Give to concerned person to take physical stock (count) and write on the excel sheet itself, put date and sign.  This is strongly recommended to avoid confusion of item code / description.

12.  Use this list (hard copy) to enter closing stock figures in ERP.

13.  From that moment onwards, every transaction must go through ERP.

14.  Depending on your judgment, estimate time required to do the physical count and the exercise to enter the data in ERP.  This will depend on number of persons allocated for the task.

15.  During the stock taking activity, there should be NO material movement.  All goods inward and sales issue has to be suspended.  For instance some companies would like to do this exercise on 1, 2 and 3 April and start the year on 4 April 08.  Some companies stop the manufacturing activity on 30 and 31 Match.

16.  You may find items that are physically present but not in the list – enter in the item master and enter closing balance.

17.  Account Closing Balance are required for the following:
• Debtor (customer),
• Creditor (vendor, service provider, and third party) balance pertaining to 11-12 balance will be carried forward automatically.
• Pass JV (cr. Note or debit note if necessary to get the correct balance).  Make sure the bank-reconciliation exercise is done well in time for ensuring correct ‘Trial Balance’ statement in ERP.

18.  In case you have already gone “Live”:
Count physical stock for each item and write on the excel sheet printout, next to ERP stock statement (book stock) figure.  Ideally, both should be same.  If not write the difference (plus or minus).  You will have to get explanation from stores-in-charge and pass SAN (stock adjustment note) to get the book stock same as physical stock.

19.  You may find item that are shown as stock in hand but there is no such item.  Check that there is no confusion in item name.  Any case one must reconcile the stock.
20.  You will have to do this exercise for each location.  Especially stock lying with the third party (if any).

21.  Print separate list for FG, WIP, Stores items, consumables, packing material, etc. from ERP software.

22.  You will need people so plan in advance, inform your team (staff), this is not one or two persons task.  More people are required depending on number of location, size of the inventory, and so on.

23.  At the time of login, into the ERP, select appropriate year (the first screen where you give log in name and password).

24.  New document number series will start from the New accounting Year – e.g. April 1, 2012.

25.   ERP System will allow you to enter 11-12 transactions even in April 2010, (for this select year 11-12).  Finally, when the audited Balance Sheet is available one can make a “closing JV (Journal Voucher).  This may be sometime in April / May 12.  Whereas the current year (11-12) transaction can be entered from 1st April itself (these will be in new document series).

26.  Cut-off date is ‘as on’ date in the Closing Balance data entry screen.

27.  In item ledger and item stock statement ‘From’ date should NOT be less than Closing Balance, date that is used for entering closing balance.

28.   User must press ‘enter’ key after entering the closing balance stock.

29.  Once closing stock is entered, user should check, and if mistake is found, then enter again; this will over-write previous figure.  Once all closing balance is checked, printed and confirmed then REMOVE access to the closing Balance menu-using user manage.  No one should enter again cl. Bal. because this is one time exercise.
30. Only after disabling, the cl. Bal. menu user should be allowed to enter inventory transactions.
31. Closing balance Rate or value:
• While entering stock closing balance, user also should enter rate.  This is required to calculate the value.
• For item that are purchased from outside – pl. enter the Weighted Average Rate (WAR) rate (weighted average rate), or last purchase Rate, if WAR rate is not available.
• For all factory made items – SFG (Semi-Finished Goods or sub-assemblies) or FG (Finished Goods)– user should enter ‘cost rate’.

For additional information study The Sarbanes–Oxley Act of 2002

The bill was enacted as a reaction to a number of major corporate and accounting scandals including those affecting Enron, Tyco International, Adelphia, Peregrine Systems and WorldCom. These scandals, which cost investors billions of dollars when the share prices of affected companies collapsed, shook public confidence in the nation’s securities markets.

In India PWC and Satyam is recent examples of accounts manipulation.

Replacing ERP Software?

Are you planning to change your ERP vendor?

ERP Implementation tips

ERP Implementation tips

Replacing system management software is like visiting a medical clinic for injection, painful but necessary.  First, try to get upgraded version if any, from your existing ERP vendor.  Probably this means more investment, but worth considering.  Once you rule out this option, and decide to look for new ERP software, consider the following points:

  1. Once again define the new requirements, this time make a function wise list.  For instance, accounts, material, sales, and so on.  It is important to do the ABC analysis, A essential list, and C is wish list.  Remember if everything is A, you will have to pay for the customization, so let go of some point as wish list.  Share the list with the new ERP vendors, and try to match.  Here the trusting the new ERP partner is important that you want the truth.
  2.   Do some business process improvements.  Do not (do not, no this is not a spelling mistake, just to emphasise) automate without improving your existing methods.  Chances are you will automate the mistakes; this means ERP will do mistakes faster.  This exercise is called BPR (business process re-engineering).  All the problems with the existing system are in fact opportunities for improvement.  Ensure that you are aware of the issues, and that the new ERP software system will help resolve them.  Learn more about BPR here  http://www.dnserp.com/b__p__r_.htm.
    Do some BPR before ERP

    Do some BPR before ERP

  3. Stay focused in defining the scope.  Module wise write down master, transactions, and reports.  Again, do ABC analysis of the same.  See sample scope given here http://www.dnserp.com/dns_scope.htm.  FAQ: Can I change the scope?  Ans: Yes, but after discussing with the ERP supplier and before starting to implement.
  4. Select your task force.  Motivate them, yes allocate a budget.  Offer incentive.  Involve key people at the start.  Write important milestones.
  5. Size of the ERP company is not that important, small or big, what is important is how important it is for them to make your ERP a success.
  6. Arrange for a demo with your own inputs and try to match the report – at this stage without customization.  About eighty percent of your requirements should be met.  So prepare your own data to input for the demo run.
  7. Brainstorm with your senior management to identify potential reasons of failure, and take steps to guard the same to reduce risk.
  8. Assign one (or better two) main ERP coordinator/s, dedicated resource/s.  Consult domain expert and other consultants such as tax, ISO, 6-sigma, etc.  Ensure their valuable time is available.  Study http://www.dnserp.com/implement_erp.htm.
  9. While evaluating make sure the implementer/s are also interviewed and their time is committed.
  10. ERP implementer and ERP coordinator team should have project management skill.  Ask ERP vendor to show their track record of other similar size ERP success story, I mean show the document that was used to track ERP project management in the past.

Hope you will find this ERP tips useful and will share with others, by using the social icons given below.  Let us know your comments, add point that we might have missed out, your feed back will be appreciated. 

In SAP ERP conference, Dabbawala explained supply chain management

Supply chain management without software ?
Supply chain management by Dabbawala

Mumbai Dabbalwala has six sigma

Learn about this amazing organization
 which got six sigma.
They deliver even in rainy season in Mumbai, India,
 without any excuse.


Here is a short presentation of 15 slides.
Let us know if any of you have actually
 experienced this 'lunch box' service.

I lost one hour. Seriously, whole of America did.

At 2 a.m. this morning, clocks moved forward an hour with the shift from standard time to Daylight Savings Time (DST).   This is logical change and not adaptive change. This is logical because everyone is changing their timetable.  For instance, getting up one hour early due to ‘Daylight savings Time’ is logical.  No huge adjustment of life priorities is triggered.  Our body clock can change without much difficulty.  But if you decide to get up one hour early to do meditation or go for swimming is difficult, because it is adaptive change.  In both examples same thing ‘get up one hour early’ is involved.

Using new technology such as Blog is adaptive change.  No matter how hard you try some people are not comfortable using facebook or LinkedIn.  You must have seen the clip that shows expert secretary changing from typewriter to a PC, and throwing monitor, because she is used to do the carriage return.  Or changing from manual system to automatic ERP system is a painful transformation.  Changing from legacy way of marketing and using the digital platforms is not an easy because it requires adaptive change.

Daily we make logical changes.  We use our training to solve routine problems, such as dealing with customer’s negative feedback, or altering action plan when sales target is not achieved.  We do customer survey and make a road map to address the issues.   But note that these examples are pertaining to external changes.

On the other hand adaptive changes are transformative, which compels us to change from inside, in the mind.  We want to reign in our temper because it is affecting our relationships with customers and colleagues, but not matter how hard we try we cannot ‘control’ it.  Our frustration spills over, and now we have to fix the damage.

Anupreksha or the cognitive behavioral therapy is a psychotherapeutic approach, which aims to solve problems concerning dysfunctional emotions, behaviors and cognitions through a goal-oriented, systematic meditation procedure.  There is empirical evidence that this is effective for the treatment of a variety of problems, including mood, anxiety, personality, eating, substance abuse, and psychotic disorders.   We can treat ourselves by a meditation technique; there are treatments for specific psychological disorders.

Only by fixing our inner feelings of frustration can we make an adaptive change.  We could decide to use cognitive behavioral therapy or Anupreksha, or some other method for the internal change.  To make such changes you need to recognize when you are facing an adaptive change, that requires subconscious level of thought and effort.

The real leadership, the kind that surfaces conflict, challenges long-held beliefs, and demands new ways of doing things-causes pain.  When people feel threatened, they take aim at the person pushing for change. As a result, leaders often get hurt both personally and professionally.

(Reference: Leadership on the Line, renowned leadership authorities Ronald A. Heifetz and Marty Linsky, Wikipedia, and Preksha meditation system).

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