Tuesday, 5 April 2016

Implementing ERP – Business Process Re-engineering:

An ERP implementation involves a number of steps. In effect these steps lead to a BPR. Business Process Re-engineering can be of two types – The Big ‘R’ or the small ‘r’. The big ‘R’ re-engineering is the complete re-engineering of all the process. The small ‘r’ re-engineering is a package enabled re-engineering. At L&T, we have adopted the small ‘r’ or the package enabled re-engineering. In a package enabled re-engineering, the changes are made in the business process to adapt to the package.

A typical ERP implementation involves the following steps:


  • AS-IS Analysis:

This involves an in-depth analysis and mapping of the existing business processes. In the AS-IS phase, there were many good but disjointed systems. All the systems were independent of each other and there was no integration between the various systems.


  • TO-BE and GAP Identification:

This stage reflects the business process re-engineering phase. Once the existing business processes are mapped, then the second step is to identify how the organisation would require the particular business process to be addressed after implementing ERP. The business process may be continued to be addressed as it is being done so or the organisation might go in for a different method of addressing the business process. Thus each and every process mapped at the AS-IS phase is re-visited with a view of objectively analysing the same and thus increasing the effectiveness of the business process. Each AS-IS process is mapped to a TO-BE process.
After the TO-BE maps are prepared, each TO-BE map is studied with respect to how the ERP package addresses these processes. In this way each and every TO-BE map is studied and the end of the exercise, a list of issues that are not addressed directly by the ERP system, is generated. This list is called as the GAP List. GAPS are those business processes, which are not directly addressed by the ERP system. It is then decided whether to use workarounds, or develop patches, which will address these missing links, or decide not to address the GAP – if the process is not affected by it.


  • Prototyping and Design

In the prototyping and design stage, a design or prototype of the new configuration is created. This involves creating a story situation wherein the whole cycle of the business process is simulated in the system.


  • Construction

In the construction phase, the configurations are done, new developments (forms, reports and BDCs) are made for the new requirements. These configurations are first done in the development environment and then tested thoroughly before transporting the same to the production environment.


  • User Acceptance Test (UAT)

The users are trained in the new system and set of users representing the user community, are selected for conducting the testing and confirm their acceptance after testing the system and satisfying themselves regarding the same.


  • Go-Live

After the users have tested the system and given the user acceptance, a cut-off date is decided for going live in the new system. The go-live could be done by two methods. The organisation can decide to use the new system as well as the old system for some time. This method is called as handholding and is usually adapted for accounting systems. The other method is to decide a date from which all new transactions will be entered and will be available in the new system.