Business Process Re-enginering - Implementing ERP

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.