Monday, March 24, 2003		Guest Speak

ERP mantras — speed, flexibility and integration
Alok Tandon

THE globe has become one huge marketplace. Globalisation has caught up with the world in true sense. This has put immense pressure on the organisations striving to excel in the global bazaar. This has also forced today’s companies to constantly reassess their corporate strategy, business processes and organisational technology, especially with the aim to increase productivity and flexibility.

In such a scenario, the speed of the response to the internal and external forces of an organisation’s operating environment has become critical for the success in business. Many think that IT has become an enabler as well as the answer to such a situation. But when we look at the real picture this also makes strict demands on the information infrastructure, which must be flexible enough to follow the organisation’s dynamics. In addition, modern information technology also offers important possibilities to support new and fundamentally different types of organisations.

While ERP has become one of the concepts to catch the fancy of organisations the world over, there are significant aspects that need to be considered while implementing an ERP package. The ERP solution should have all ingredients required to address the above-mentioned situations. This calls the need for a model that best addresses such a situation during an ERP implementation. The ERP implementation model should be based on three key underlying objectives. They are speed, flexibility and integration. Speed is an important criterion for ERP implementation. This would mean a short and compact implementation cycle, minimising the implementation effort through the use of modern tools. Flexibility would inculcate an optimisation phase after the initial implementation where the ERP configuration smoothly follows organisational changes without the need for time consuming costly effort. Both speed and flexibility in the implementation would only be possible with the use of integration tools that automate the configuration activities.

The underlying concept of ERP implementation is based on the definition of line-of-business specific business models which are not rigid but have the ability to be adaptable to specific requirements and future changes.

The ERP implementation should support for pre-sales, by offering, presenting and evaluating line of business specific models that closely relate to the customer organisation’s environment. It should also act as a support for the implementation and optimisation stages, by offering methods and tools for customising the generic business model to the specific needs of the organisation by generating the configuration and user interface. It should also shorten the implementation cycle, based on the generic business model and the discussion can focus on specific issues of the organisation. This helps prevent re-inventing the wheel and can contribute to shortening the implementation cycle.

It should also support a business process re-engineering cycle, with the provision of ‘best-practice’ knowledge base for a line of business. This supports the dialogue between an organisation’s top management and business consultants.

Following such a model for ERP implementation may seem quite exhaustive but it should not mean that a customer must go through this time consuming and costly process from scratch. To enable smooth functioning of the implementation procedures the vendor should be able to provide a ready Line-of-Business (LOB) specific enterprise models that are designed and geared towards specific LOB strategic issues. Within the framework of the implementation model that are discussed here the implementation is realised via the subsequent evaluation of the pre-defined LOB models referred to as reference models.

The idea behind this kind of a model is that best practice visions and experiences from the industry are captured in the pre-defined line-of-business specific solutions. This will serve as a catalyst in the creative and innovative process of BPR. The rationale is that by the use of dedicated reference models per line-of-business, the effort and time needed for this evaluation process is reduced significantly. Therefore, companies will not hesitate to reassess their ERP implementation, just when the business requires this. This eliminates the necessity of a costly and time-consuming re-implementation. Besides, it also provides the flexibility and speed companies are looking for in order to follow the business dynamics with the IT infrastructure.

Such a model also encompasses within it three key models that help speed up ERP implementations. They are the business function models, business process model and business organisation model. The business function model is a functional decomposition of a company up to the level of the main-functions.

The business process model defines how the process control cycle is realised by defining activities that should be executed in the workflow. With this, one can understand the process definitions as they describe how the business functions are realised.

Coming to the business organisation model, this describes the structure of the organisation in terms of division, business units and departments. A key concept in this is the identification of roles in the company. A role defines which activities/tasks in the process execution are usually assigned to one person or group. Besides this, the hierarchical and functional relationships can be described between the departments using the business organisation model.