Summary of “ERP: Making It Happen: The Implementers’ Guide to Success with Enterprise Resource Planning” by Thomas F. Wallace, Michael H. Kremzar (2001)

Operations and Supply Chain Management Inventory Management

Introduction

The book “ERP: Making It Happen” is an essential guide for understanding and implementing Enterprise Resource Planning (ERP) systems effectively. Authored by Thomas F. Wallace and Michael H. Kremzar, it combines theory with practical advice, targeting both the strategic and operational aspects of ERP. It falls under the category of Inventory Management but spans a wide array of business functions.

Key Concepts and Structure

1. Understanding ERP Basics

Definition and Scope: ERP is integrated software that manages business processes across various departments in an organization. It aims to streamline operations and foster data accuracy.
Action: Conduct a detailed needs analysis to understand the specific business processes that an ERP system will integrate.

2. The Importance of Leadership

Executive Sponsorship: Effective ERP implementation starts with strong leadership, particularly from top management.
Example: The book narrates the case of a CEO who actively participated in the ERP project, ensuring alignment with the company’s strategic goals.
Action: Secure a committed executive sponsor who will champion the ERP implementation and allocate necessary resources.
Project Management: A skilled project manager should oversee the ERP implementation.
Example: A manufacturing company appointed a project manager with extensive knowledge in both IT and business operations, leading to a seamless implementation.
Action: Appoint an experienced project manager with robust cross-functional skills.

3. Planning and Preparation

Developing a Project Plan: This includes timelines, milestones, and a risk management plan.
Example: Using Gantt charts, a retailer managed to map out their entire project timeline down to individual tasks.
Action: Create a detailed project plan with clearly defined milestones and responsibilities.
Employee Involvement: Early and continuous engagement of employees can preempt resistance.
Example: In one case, a company created ‘ERP champions’ within each department who acted as liaisons between the employees and the ERP team.
Action: Form an internal ERP task force involving representatives from each department.
Data Accuracy and Preparation: Ensuring the data to be migrated is clean and accurate is critical.
Example: A case where a company allocated three months exclusively to data cleaning activities before migration.
Action: Conduct a comprehensive data audit before the migration phase.

4. Selecting the Right ERP System

Criteria for Selection: Evaluate ERP systems based on scalability, cost, vendor support, and functionality.
Example: A mid-sized enterprise, after thorough evaluation, chose a modular ERP system to allow future expansion.
Action: Develop a criteria matrix to evaluate potential ERP systems rigorously.
Vendor Selection: Selecting the right vendor who offers robust support and training is crucial.
Example: A company chose their vendor based on the comprehensive training programs offered, which ensured smoother adoption.
Action: Organize vendor presentations and review their support and training programs.

5. Implementing ERP

Phased vs. Big Bang Approach: Deciding on a phased implementation or a big bang approach can influence project success.
Example: A phased approach was adopted by a healthcare provider, starting with finance modules before rolling out to inventory and HR.
Action: Evaluate organizational readiness and opt for a phased implementation if there’s high resistance or lack of readiness.
Training: Comprehensive training for all users ensures they are proficient with the new system.
Example: A manufacturing company set up a ‘train-the-trainer’ program, where key users were trained and then tasked with training their peers.
Action: Implement a cascading training program where key users train others.
Testing: Rigorous testing phases such as unit tests, system tests, and user acceptance tests should be conducted.
Example: A firm dedicated 20% of their project time solely to testing, reducing post-implementation issues significantly.
Action: Allocate ample time and resources for multiple rounds of testing.

6. Post-Implementation and Continuous Improvement

Performance Monitoring: Establish KPIs to monitor the ERP system’s performance continually.
Example: A logistics company used KPIs like order cycle time and inventory turnover rates to measure the impact of ERP.
Action: Define KPIs tailored to your business processes and monitor them regularly.
User Feedback and Adaptation: Collecting user feedback post-implementation helps in continuous improvement.
Example: Regular feedback sessions held by a financial services firm led to the incremental adaptation of the ERP system to user needs.
Action: Schedule regular feedback sessions with users to identify areas of improvement.
Upgrades and Maintenance: Regular updates and maintenance are crucial for keeping the system efficient.
Example: An educational institution maintained a bi-annual upgrade schedule to ensure their ERP system was up-to-date.
Action: Create a maintenance and upgrade calendar and adhere to it strictly.

Conclusion

“ERP: Making It Happen” is a comprehensive guide that outlines a structured approach to ERP implementation. From meticulous planning and preparation, involving stakeholders, selecting the right system, and through to continuous improvement post-implementation, the book provides actionable insights backed by real-world examples.

Individuals seeking to implement ERP systems can benefit significantly from following the structured guidance and practical actions recommended by Wallace and Kremzar. Each phase of the project is detailed, ensuring that organizations can navigate the complexities of ERP implementation to achieve successful outcomes, increase efficiency, and improve overall business processes.

Operations and Supply Chain Management Inventory Management