IISWBM

MBA 2024-26
Enterprise Resource Planning
ERP Projects
ERP Projects
Definition : An ERP (Enterprise Resource Planning) Project is the structured initiative to plan,
acquire, implement, and maintain an ERP system in an organization.
It’s not just about installing software, it’s a business transformation project that integrates core
functions like finance, HR, supply chain, sales, procurement, and customer management into a
single unified system.

ERP Project Types:

1. Implementation Projects
• Greenfield Implementation: First-time ERP adoption in an organization. Processes are
mapped to ERP functionalities from scratch.
• Brownfield Implementation: Replacing an outdated ERP or upgrading to a new version
(e.g., SAP ECC to S/4HANA).
2. Module Specific Rollouts
Organizations may roll out specific modules based on need:
• Finance & Accounting (FI/CO, GL, AR, AP)
• Human Capital Management (HCM/HRMS)
• Supply Chain Management (SCM)
• Sales & Distribution (SD/CRM)
• Procurement (MM/Ariba)
• Production/Manufacturing (PP, MES integration)
ERP Project Types(Continued..(2/3)):
3. Industry-Specific ERP Projects
• Manufacturing ERP Projects – Shop floor integration, BOMs, material planning.
• Retail ERP Projects – POS, inventory, customer loyalty, supply chain.
• Healthcare ERP Projects – Patient data, billing, regulatory compliance.
• Education ERP Projects – Student lifecycle management, finance, HR.
• Public Sector ERP Projects – Budgeting, payroll, citizen services.
4. Geographical/Business Unit Rollouts
• Global ERP Rollout: Implementing ERP across multiple countries, aligning processes
while considering local legal/compliance needs.
• Divisional/Business Unit Rollout: ERP implementation within specific divisions (e.g.,
Logistics, HR, Finance).
5. ERP Integration Projects
ERP integrated with:
• CRM (Customer Relationship Management)
• E-commerce Platforms
• Business Intelligence / Analytics tools
• 3rd Party Logistics systems
• IoT/AI solutions
ERP Project Types(Continued.. (3/3)):
6. Migration & Upgrade Projects
• System Migration: Migrating from legacy system (e.g., Oracle to SAP, JD Edwards to
Microsoft Dynamics).
• Database/Infrastructure Migration: Moving to cloud platforms (SAP on AWS, Oracle
Cloud ERP, MS Dynamics 365).
• Version Upgrades: Technical and functional upgrade (e.g., SAP ECC → S/4HANA).

7. Support & Enhancement Projects

• Post-Go-Live Support: Hypercare, stabilization, user training.
• Continuous Improvement: Adding enhancements, automations, custom developments.
• Compliance/Regulatory Changes: GST/VAT, payroll rules, SOX compliance updates.

8. Digital Transformation Projects(ERP-Centric)

• ERP linked with AI, RPA, IoT, Machine Learning.
• Mobile ERP and self-service portals.
• Predictive analytics embedded into ERP.
General ERP Processes for acquiring and implementing an ERP System
1. Needs identification & Business Case
• Assess current systems, pain points, and inefficiencies.
• Define objectives: cost reduction, process automation, compliance, scalability, etc.
• Prepare ROI and TCO (Total Cost of Ownership) analysis.
• Get management approval and budget sanction.

2. Vendor selection & ERP acquisition

• Requirement Gathering (RFI/RFP process): Functional, technical, compliance, and
industry-specific needs.
• Shortlist vendors (SAP, Oracle, Microsoft Dynamics, Workday, Infor, etc.).
• Conduct vendor demos, POCs, and evaluations.
• Perform fit-gap analysis (vendor vs. business process).
• Negotiate contracts (license, subscription, support, cloud/on-premise hosting).

3. Project Planning & Governance

• Define project scope, timeline, milestones, budget, and risks.
• Form a project governance structure: steering committee, project manager, ERP
consultants, business SMEs (Subject Matter Experts).
• Decide on implementation methodology (Waterfall, Agile, ASAP, Activate, etc.).
General ERP Processes for acquiring and implementing an ERP
System(Continued..(2/4))
4. Business Process Re-Engineering(BPR)
• Map existing processes ("As-Is").
• Design optimized processes ("To-Be").
• Align ERP functionalities with redesigned processes.
• Decide on standardization vs customization.

5. System Design & Configuration

• Configure ERP modules (Finance, HR, SCM, Sales, Manufacturing, etc.).
• Set up master data (customers, vendors, employees, products).
• Apply business rules, workflows, approval hierarchies.
• Minimize customizations (stick to standard best practices unless critical).

6. Data Migration
• Extract data from legacy systems.
• Data cleansing (remove duplicates, correct errors).
• Data transformation (formatting to fit ERP structures).
• Test and validate migrated data.
General ERP Processes for acquiring and implementing an ERP
System(Continued..(3/4))
7. Integration
• Connect ERP with other systems (CRM, E-commerce, BI, Payroll, IoT, 3rd-party
logistics).
• Define APIs, middleware, or EDI for seamless data flow.

8. Testing
• Unit Testing – by consultants/developers.
• Integration Testing – end-to-end process flow.
• User Acceptance Testing (UAT) – by business users.
• Performance and security testing.

9. Training & Change Management

• End-user training (role-based).
• Super-user/Power-user development.
• Communication plans to reduce resistance.
• Change champions in departments.
General ERP Processes for acquiring and implementing an ERP
System(continued..(4/4))
10. Go-Live Preparation
• Cutover planning (final migration, downtime, backups).
• Dry run rehearsals.
• Sign-off from stakeholders.

11. Go-Live & Hypercare

• Switch from legacy to ERP.
• Closely monitor transactions, errors, and user issues.
• Provide immediate support (hypercare phase for 1–3 months).

12. Post-Implementation Support & Continuous Improvement

• Move into AMS (Application Management Services).
• Patch upgrades, performance tuning.
• Add new modules/features (phased rollout).
• Continuous improvement & analytics adoption.
ERP Benefits:
1. Process Integration & Efficiency
• Unifies core functions like finance, HR, logistics, procurement, sales, and production.
• Removes data silos, enabling seamless flow of information.
• Reduces duplication of efforts and manual errors.

2. Better Decision Making

• Provides real-time data and analytics across the organization.
• Helps management in forecasting, planning, and tracking KPIs.
• Enables data-driven decision-making rather than relying on assumptions.

3. Improved Productivity
• Automates repetitive tasks (reporting, payroll, invoice generation, etc.).
• Reduces paperwork and manual reconciliation.
• Employees can focus on value-adding activities instead of administrative work.

4. Enhanced Collaboration
• Centralized database allows departments to access the same updated information.
• Promotes cross-functional teamwork.
• Improves communication between business units, vendors, and customers.
ERP Benefits(Continued..(2/2)):
5. Cost Savings
• Optimizes resource utilization (inventory, workforce, assets).
• Reduces operational inefficiencies and process delays.
• Minimizes IT overhead by consolidating multiple systems into one.
6. Compliance & Risk Management
• Helps organizations adhere to regulatory requirements.
• Improves audit trails, data security, and reporting accuracy.
• Reduces risks of financial errors and compliance penalties.
7. Scalability & Flexibility
• ERP systems grow with business needs (adding new modules, geographies, or
processes).
• Supports multi-currency, multi-language, and global operations.
• Adapts to new technologies like AI, IoT, and automation.
8. Customer Satisfaction
• Faster order processing and improved supply chain visibility.
• Better demand forecasting leads to timely product availability.
• Enhanced after-sales support through integrated CRM.
Risk and Challenges of an ERP Project:
1. High Implementation Cost
• ERP systems require significant investment (software, hardware, licenses, consulting,
training).
• Risk of budget overruns if scope is not controlled.
2. Time Consuming Implementation
• Large ERP projects can take months or even years to complete.
• Delays in deployment due to complex integrations or change requests.
3. Resistance to Change
• Employees may be reluctant to adapt to new systems and processes.
• Risk of low adoption if proper change management and communication are not in
place.
4. Data Migration Issues
• Migrating legacy data into ERP is complex and error-prone.
• Risk of data loss, duplication, or inconsistency.
5. Scope Creep
• Business users may keep adding requirements during the project.
• Leads to cost overruns, delays, and loss of project focus.
Risk and Challenges of an ERP Project(Continued..(2/2)):
6. Customization Risks
• Too much customization can increase complexity and reduce system stability.
• Makes upgrades and maintenance more difficult.
7. Integration Challenges
• Integrating ERP with existing applications (CRM, SCM, legacy tools) can be difficult.
• Poor integration may lead to inefficiencies and incomplete process automation.
8. Inadequate Training
• Without proper user training, employees may misuse the system.
• Risk of low productivity and errors in daily operations.
9. Vendor Dependence
• Heavy reliance on ERP vendor or implementation partner.
• Risk if vendor support is weak, slow, or expensive.
10. Security and Compliance Risks
• Centralized data increases cyber-attack risks.
• Improper configuration may lead to compliance violations.
Costs of an ERP Project:
1.Software Costs
• License Fees (for on-premise ERP like SAP, Oracle).
• Subscription Fees (for cloud ERP like SAP S/4HANA Cloud, Oracle NetSuite).
• Additional modules or user-based licensing.
2. Hardware & Infrastructure
• Servers, storage, and networking (for on-premise).
• Backup, disaster recovery, and high-availability systems.
• Cloud hosting charges (if SaaS or private cloud).
3. Implementation & Consulting
• Fees for ERP implementation partners/consultants.
• Business process analysis and re-engineering.
• Project management and quality assurance.
4. Customization & Development
• Tailoring ERP to specific business needs.
• Creating custom reports, dashboards, and workflows.
• Higher long-term cost if customizations are excessive.
Hidden Costs of an ERP Project:
1. Customization Costs
• Standard ERP rarely fits 100% of business processes.
• Heavy customization means additional development, testing, and future upgrade costs.
2. Data Migration & Cleansing
• Extracting, cleaning, validating, and migrating legacy data is complex.
• Often underestimated in time, effort, and cost.
3. Training & Change Management
• Extensive user training sessions are required across departments.
• Cost of workshops, materials, and time lost from regular duties.
• Ongoing support and retraining for new employees.
4. Integration with Other Systems
• ERP may need to connect with legacy applications, third-party tools, or custom-built
solutions.
• APIs, middleware, and testing add significant cost.
5. Testing & Quality Assurance
• End-to-end testing (unit, integration, UAT, performance) is often more expensive than
planned.
• Involves business users’ time in addition to IT resources.
Hidden Costs of an ERP Project(Continued..(2/2)):
6. Process Redesign
• ERP implementation often forces businesses to redesign workflows.
• Consulting hours, workshops, and internal re-alignment cost money.
7. Temporary Drop in Productivity
• During transition, employees may take longer to complete tasks.
• Downtime, learning curve, and parallel system running add hidden costs.
8. Post-Go-Live Support
• Additional helpdesk, ERP consultants, or vendor support contracts.
• Stabilization phase often needs higher resources than budgeted.
9. Maintenance & Upgrades
• Ongoing costs for patches, upgrades, and new features.
• Customizations make upgrades even more expensive.
10. Employee Turnover Risk
• Some employees may leave due to difficulty adapting to new systems.
• Re-hiring and retraining replacements adds indirect cost.
Project Charter:
A Project Charter is a formal document that:
• Authorizes the ERP project to begin.
• Defines the scope, objectives, stakeholders, and governance of the project.
• Acts as a contract between the project sponsor, management, and the project team.
• Provides a reference baseline for monitoring progress, risks, and responsibilities.

In ERP projects, it’s especially important because ERP implementation affects the entire
organization, cutting across multiple departments (Finance, HR, Supply Chain, Sales, IT, etc.).

Importance of Project Charter in ERP Projects

• Ensures executive sponsorship & approval.

• Creates clarity of goals and boundaries.
• Helps prevent scope creep.
• Defines roles & accountability.
• Serves as a foundation for planning & governance.
Sample Table of Contents (ERP Project Charter):
1. Executive Summary
• Brief overview of why ERP is needed and expected business value.
2. Project Objectives
• Strategic goals( integration, automation, cost reduction, better reporting)
• Key success criteria.
3. Project Scope
• In-Scope: Modules (Finance, SCM, HR, CRM, etc.), business units, processes.
• Out-of-Scope: Custom legacy systems, certain geographies, etc.
4. Business Case & Benefits
• Expected outcomes (e.g., process efficiency, reduced costs, compliance).
• ROI estimates.
5. Stakeholders & Governance
• Executive Sponsor
• Steering Committee
• Project Manager
• ERP Vendor / Consultants
• Functional & Technical Teams
Sample Table of Contents (ERP Project Charter) (Continued..(2/2)):
6. Project Team Structure & Roles
• Organizational chart with roles & responsibilities.
7. High-Level Project Plan / Timeline
• Phases (Preparation → Implementation → Go-live → Support).
• Key milestones.
8. Budget & Resources
• Estimated cost (software, hardware, consulting, training).
• Resource allocation.
9. Risks, Assumptions & Constraints
• Risks: data migration, change resistance, overruns.
• Assumptions: timely approvals, vendor support.
• Constraints: budget cap, fixed go-live date.
10. Change Management & Communication Plan
• Approach for training, user adoption, and communication.
11. Approval & Authorization
• Sign-offs by executive sponsor, project manager, and key stakeholders.
ERP Security Issues:
1. Unauthorized Access & Role Mismanagement
• Inadequate role based access controls(RBAC) may allow users to access sensitive data
beyond their responsibility.
2. Data Privacy & Compliance Risks
• ERP systems often store personal, financial, and HR data.
• Risks of violating data protection laws (GDPR, HIPAA, etc.) if data isn’t properly secured.
3. Cybersecurity Threats
• ERP is a prime target for hackers because it centralizes critical business information.
• Common threats: Phishing, ransomware, SQL injection, DDoS attacks.
• Cloud-based ERP adds risks of multi-tenant data breaches.
4. Integration & Third-Party Risks
• ERP systems connect with CRM, e-commerce, banking, and logistics apps.
• Poorly secured APIs and third-party connectors may create attack vectors.
5. Disaster Recovery & Backup Gaps
• Without proper backup and recovery planning, system failures or attacks can result in
permanent data loss.
THANK YOU