Critical Success Factors for ERP

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ERP, PDM, CRM, and EDM system critical success factors (CSF) have significant impacts on the success or failure of the project. What are these CSF’s and how can a project asses their compliance against them?

Transcript of Critical Success Factors for ERP

  • Prepared by Glen B. Alleman, 2002 Critical Success Factors for Enterprise Projects ERP, PDM, CRM, and EDM system critical success factors (CSF) have significant impacts on the success or failure of the project. What are these CSFs and how can a project asses their compliance against them?
  • Prepared by Glen B. Alleman, 2002 What Are Critical Success Factors? A small number of topics that are influential in determining the outcome of a business activity, and then monitoring those factors for change. Capers Jones Those limited number of areas where "things must go right J. F. Rockhart Critical success factors are those primary process performance measures that most closely define and track how the process must perform to be considered successful. CSFs are directly related to strategic and business plan objectives and goals. For each critical success factor there must be an associated key indicator that provides the measure, and a standard of performance or allowable variance from planned performance. The most effective key indicators are those designed into the process in such a way as to provide a readily available or continuous reading of performance. Many of the instruments on a car dashboard can be considered examples of key indicators. European Software Institute Dictionary
  • Prepared by Glen B. Alleman, 2002 Applying CSFs to Enterprise Projects Examine the CSFs listed here and determine: If they apply How the project will comply with the CSF How the stakeholders will know if the project is in compliance. Develop an actionable plan for each CSF to deliver on compliance. Make the review of the CSFs part of the project management process.
  • Prepared by Glen B. Alleman, 2002 CSF Overview Top Management Project Champion User Training Managing Expectations Vendor Relations Package Selection Project Management Steering Committee Consultants Customization Data Analysis/Conversion Process Reengineering System Architecture Resource Management Team Competence Change Management Goals and Objectives New Process Education Communication Cooperation Vendor Support References
  • Prepared by Glen B. Alleman, 2002 CSF Overview Critical Success Factors are one way to frame a projects activities. Asking questions about the project in the vocabulary of CSFs focuses both the question and the answer on the outcome rather than the detailed project activities. This helps to avoid the natural tendency to become enamored with technology. It also helps separate the business aspects of the project from the software and hardware aspects.
  • Prepared by Glen B. Alleman, 2002 Top Management Develops an understanding of the capabilities and limitations of the system. Establishes reasonable goals for the system. Exhibit strong commitment to the successful introduction of the system. Communicates the corporate IT strategy to all employees. Never delegates progress monitoring and decisions at critical junctures to technical experts.
  • Prepared by Glen B. Alleman, 2002 Project Champion Owns the role of change champion for the life of the project. [13] Understands both technology and business in the organizational context. Must be an executive level individual with extensive knowledge of the organizational processes. Positioning the champion high in the organization establishes with authority to move large and complicated projects through its various phases. [43]
  • Prepared by Glen B. Alleman, 2002 User Training and Education Everyone who uses the system needs to be trained on how they work and how they relate to the business process early in the implementation cycle. [16, 64] Knowledge of the system must be transferred from the trainer to the user. Training opportunities must be provided on a continuous basis. [8]
  • Prepared by Glen B. Alleman, 2002 Managing Expectations Careful deliberation of success measurement and management expectations must be done by all participants. [39] Overselling by the vendor must be avoided. [41]
  • Prepared by Glen B. Alleman, 2002 Vendor / Customer Relationships The relationship between the vendor and the customer should be strategic not tactical. [65] Supplier partnering is one way to establish this strategic relationship. [62] Packaged software systems also require add ons All attempts should be made to maximize compatibility between vendors
  • Prepared by Glen B. Alleman, 2002 Vendor Development Tools Use the rapid implementation technologies and programs provided by the vendor. [25] Transfer the knowledge of these technologies as soon as possible. Understand the best practices of previous system users and apply them to the project. Use business modeling tools, templates for industry specific practices, and bundle hardware and software or combined packages of software, services, and support.
  • Prepared by Glen B. Alleman, 2002 Selection of Appropriate Package Choose the package based on budget, timeframe, goals, and deliverables that shape the overall project. [33] Choose the package based on organizational data and process needs to assure minimum modification, successful implementation and use. Selecting the wrong package means a commitment to architecture and applications the do not fit the organizations strategic goals or business processes. [48]
  • Prepared by Glen B. Alleman, 2002 Project Management Project planning and control are a function of the projects attributes, including size, experience with the technology, and project structure. New project management skills are usually required since the myriad of organizational, human, political, and technology issues may enterprise projects huge and inherently complex. Proper management scope is required to avoid schedule and cost overruns. High implementation risks require multiple management tools including formal planning and deliverables control.
  • Prepared by Glen B. Alleman, 2002 Steering Committee A superuser is needed to speak for the collective group, this is the steering committee. [60] Senior managers across multiple functions, project management representatives,and end users who will have daily contact with the system. [11] Direct monitoring of the projects progress. Ratify and approve all major decisions Ensure there are adequate controls over the teams decision making processes. [63]
  • Prepared by Glen B. Alleman, 2002 Consultants Consultants provide specialized services. Requirements analysis Product suite recommendations Implementation management The system owner must retain all control and accept full responsibility for the system, not the consultants. [14] Consultants should have not financial ties to the selected vendor product suite. [46]
  • Prepared by Glen B. Alleman, 2002 Customization Customizations are associated with increased system cost, longer implementation time, and loss of benefits from vendor upgrades and enhancements. [19] Customization should only be done when essential or competitive advantage is derived from the changes made to the system. [20] Management has the ultimate choice of changing the processes or the system. The first choice should be to change the processes
  • Prepared by Glen B. Alleman, 2002 Data Analysis and Conversion The proper data must be found through a formal data modeling process. [36] All disparate data structures must be converted to a single formal. Interfaces to other external systems must be normalized.
  • Prepared by Glen B. Alleman, 2002 Business Process Reengineering Business processes must be aligned with system. [29] The system alone cannot improve organizational performance unless an organization restructures its business processes. [8] Business process redesign increases benefits but also increases risk. [37]
  • Prepared by Glen B. Alleman, 2002 System Architecture Key architectural consideration occur early in the implementation process are many times irrevocable. [56] Architectural planning cannot be assigned ot the vendor. [22]
  • Prepared by Glen B. Alleman, 2002 Resource Management Resource requirements need to be determined early in the project lifecycle. [48] Resource estimates often exceed initial estimates. [48] Resource commitments must be secured up front. [47]
  • Prepared by Glen B. Alleman, 2002 Team Competence Technical competence is necessary but business competence is also required. [36] The project manager must have knowledge, skills, experience, the right team members, and the clear authority to execute the assigned tasks. Consultants can provide technical knowledge, but must be manager as a full member of the team. [6, 10, 13]