ERP Life Cycle

The life cycle of information systems represents the various stages through which a project of development and utilization of information systems passes. In its traditional form, the systems development life cycle encompasses project definition, system study, design, programming, installation and post-implementation stages. The steps in the life cycle process are complex. From birth to death of your ERP, there are a multitude of issues to keep in mind.

ERP Implementation Life Cycle is the process of implementation of enterprise resource planning in any organization. It involves many steps and stages right from the start, planning for project implementation, analysis, design, implementation, transition, and operations. ERP implementation lifecycle highlights the different phases of implementing an ERP system. It starts from the projection of the ideal ERP package that is suitable for the company. The steps involved in the life cycle of the ERP implementation are:

Evaluation & Selection: As enterprise systems are considerable investments, they are worth the effort of a comprehensive Request for Proposals (RFP) process. Your RFP should take into consideration both system requirements and the implementation process.

ERP Roll out The initial rollout of an ERP system itself consists of various phases commencing with Request for Proposal (RFP) and vendor selection and ending with go live and hand holding phase. Some important matters concerning this phase, as given below, will have a direct bearing on subsequent phases of the ERP lifecycle: 

• Degree of matching of vanilla ERP product to current business, need an extent of customization, particularly source code customization.

• The commitment of the vendor to future development and their financial health

• Support issues include License fees and escalation thereof.

Optimization: Once you reach the post ERP roll-out stage, you enter a shake-out period where issues and bugs are found and resolved. The change management process continues with more training and with regular employee communications to address any misconceptions about changes to policies and procedures. Consider that it usually takes twice as long for employees to adapt to change as it took for you to plan it. Count on a period of at least six months to a year for employees to feel proficient in using the new system.

It’s a good idea to identify what “success” means for your ERP project during or prior to reaching this stage. Rather than success being defined as completing an on-time, on-budget project, success with your new ERP should be defined in terms of the measurable benefits your company receives, as well as what value it brings to your customers, as a result of using the new system.

Consider performing a post-implementation audit after using the system for six months. Key stakeholders to include in the audit are your users, IT department, and a selection of customers and vendors, in order to assess the full impact of the new system. Your wish list will likely grow as a result of the feedback you obtain in the audit. Once this audit is completed and your wish list is adjusted, begin to map out a timeline for implementing wish list items.

Maintaining Value: This is the longest stage of the ERP life cycle, lasting anywhere from 6-10 years or more. It is during this stage that the value of your system is realized.

Now is when you begin implementing those items on your wish list. But keep in mind that your business isn’t static and your enterprise system plans should not remain static, either. Continue to look for ways to enhance your system and to integrate new tools in order to get the most out of it. Monitor business trends in your marketplace and consider how adjustments to system configuration would add value for your customers. Follow issues and hot topics in the ERP community.

If you’ve partnered with a good ERP consultant, you will retain that relationship for years to come. Your consultant will provide additional training and guidance on the safest and best ways to achieve configuration changes.

Extending Values: The phase that overlapoverlaps with the phase of maintenance. New or changed business processes necessitate minor or moderate changes in the system. Sometimes the cost changes may be prohibitive, particularly for systems where a lot of customization has been done during the implementation phase.

Parallel to business changes, technological changes also occur. New releases and versions appear for underlying technological platforms like Operating systems and Data Base. ERP vendors release patches and versions of their products at regular intervals which needed to be incorporated in the existing system. This usually involves minor or moderate efforts. But, the problem arises when many software objects were customized during implementation. Retrofitting these objects for making them compatible with later versions, may turn out to be a major migration exercise involving exorbitant cost and effort.

Declining Value: At some point, your company will realize that the system is no longer meeting business needs. Perhaps you are on a version of the software that is no longer supported. Your hardware may be on the decline and, due to the age of the system as a whole, you decide it’s time to re-evaluate your needs. You begin to research and explore options. The ERP life cycle repeats.

Reimplementation: Similar to Roll Out phase as mentioned above. However, organizations are better organized now. The initial process will be carried out more professionally. It is likely that they will adopt more of a vanilla version with minimum need for customization so that the next cycle gives a better Return on Investment (ROI).