Ecuadortimes.net had the opportunity to talk with Mr. Adolfo Blum, an Ecuadorian expert to implement a business management system called ERP (Enterprise Resource Planning).
Blum, Master in Project Management from George Washington University and certified as a Senior Project Manager of IBM Corporate, presented recently at the local market a book written by him in which he shares valuable information on how to run this type of project.
1. When and how did it appear the idea of writing this book?
I started 2 years ago and I compiled it little by little in my spare time. The idea came because there are more stories of failure than success, which can be heard on the execution of such projects and few business leaders who are knowledgeable about everything that involves implanting an ERP and what is required to achieve this. This aroused in me the need to share my experiences and make my recommendations.
2. What is ERP?
An ERP is a business management system that incorporates business processes designed based on “best practices” of the industry or sector within a configurable and robust software tool. Its main purpose is to sort, process and integrate information from all functional areas of an organization, centralized in one place for easy access, streamline transaction processing and support decision making. The ERP systems are comprised of several modules and these in turn bring together various business processes, which cover the various operations of a company, especially those related to production, logistics, distribution, finance and human resource management.
3. An ERP is an expense or an investment?
It is directly related to how to implement and use ERP. If the ERP is not configured correctly and once put into production does not do what was expected to do, then most likely it will be considered as an expense. But if its use increases efficiency and thus improving productivity and profitability, then surely be considered as an investment.
4. Is it very complicated to implement an ERP?
The implementation of an ERP is a teamwork effort where both the implementer and the company that hires its implementation work together, and if either one fails to do it or does it not so well its part of work, then the project will not be successful for sure.
ERP projects are often perceived as expensive, long, complex, hard work, hard adaptability, long-term benefits and a high risk of failure, or at least initial involvement in the business. This in itself already sounds a bit daunting; however, the good news is that an ERP project itself can be planted, if you follow the right steps.
5. How to tell if a company is ready to implement an ERP?
To determine whether the minimum conditions necessary to run an ERP project, you should make a diagnosis of how the company is ready for deployment. It is possible that such an analysis can show that the company is not yet ready for such projects.
6. Which are the requirenments to implement an ERP project?
To implement a project of this nature, most of the investment to be made in the acquisition of ERP software itself (modules) requires hiring a specialized consultant for implantation, usually replace or extend existing IT infrastructure (hardware and software base) and hire several goods and / or services.
7. How long does it take an ERP implementation?
Depends on the number of processes to implement, but it usually takes several months. Only the “definition phase”, ie that takes from the definition of minimum requirements to be met by ERP to ERP product procurement and implementation service with selected companies, can take between 3 and 6 months. Then comes the “phase of implementation “, the one that goes from the initiation of the service contracted, to start production of the system, which can take between 10 and 12 months. This period can be extended further, depending on whether there are changes on the fly.
8. How much does it cost an ERP implementation?
Generally, when you think of ERP implementation, you only think of the cost of software, but ERP implementation involves many other components and the software, so that the sum of all these, is what ultimately cost implementation. Some costs relate to assets and other costs correspond to some physical generate cash expenses and others not. It should identify all potential costs involved in the project, in order to then develop an initial budget and confirm whether or not we can ensure delivery of the necessary resources for implementation.
9. Who is the appropriate person to do this work?
It must privilege the experience of implanting over other evaluation criteria. There is no sense if you buy an excellent ERP, but you choose an inexperienced implanter. If you do that the project will fail.
10. How to achieve a successful implementation?
For an ERP project to succeed, it must be handled as a “formal project” which involves running home well-defined activities, planning, design, development, monitoring, control, measurement and closing.
There are many critical success factors in implementing an ERP among them we can mention a few:
- Look for support of a good sponsor who provides all that is required for the proper conduct of the project.
- Appoint an experienced project manager that is dedicated 100% to the project.
- Develop a good RFP that clearly defines the terms and conditions and meet the minimum requirements in terms of processes, functionality and reporting.
- Select the right ERP product for the type of client’s business.
- Choose an implanter that has demonstrated serious and real experience in ERP implementation selected.
- Have an appropriate control over all project activities.
To download this book, click here: “How to Implement an ERP”