ERP Implementation Methodology
The various stages that a typical ERP implementation program goes through are:
Identify the needs for the ERP package
The first stage involves the identification of the needs to be satisfied by adopting the ERP package. Once these needs are identified, organizations can evaluate how ERP implementation can help satisfy these needs. The effective management information systems and information flow between various business partners are examples of the needs that an ERP system can satisfy.
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ERP System in Healthcare Business
Most ERP applications are developed to satisfy the requirements of the manufacturing sector. As there are no standards for clinical procedure, ERP applications for clinical integration do not exist. But ERP can help healthcare organizations in improving processes and functions such as patient scheduling, human resources management, workload forecasting and work flow management. Since ERP packages are receiving increasing attention from large healthcare organizations, ERP vendors are developing administrative and logistical solutions that satisfy the requirements of such organizations.
Unlike manufacturing, where there are a few standard processes with largely predictable outcomes, healthcare systems have to deal with cost structures that are difficult to forecast. Further, the service requirements for each patient vary with regard to processes, staffing and facility usage. ERP implementation for effective resource utilization in clinical processes is difficult as these processes vary with each individual physician and patient. But ERP systems can provide comprehensive advantages in integrating non-clinical and supplementary healthcare activities. Non-clinical activities which can benefit from ERP implementation include patient scheduling, supply chain management, accounting, human resources, laboratory and pharmacy services and management information systems. ERP can handle the requirements of such processes because they are similar to activities in manufacturing. ERP systems can assist healthcare organizations in managing their purchase and distribution functions and in gathering the information required for billing and payments. As most of the healthcare processes are labor dependent, the focus of ERP system for healthcare organizations is on managing staff and adminstrative activities.
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Evaluating the "as-is" situation of the business
The next stage involves the identification of various processes involved in the working of the organization. Then, the detailed processes in business transactions should be listed. Process mapping can be helpful in detailing the processes. It provides information about the time taken to complete a process, the number of decision points, the number of reporting points, flow of information, etc.
Decisions about the desired "would-be" situation for the business
Once the structure of the current processes is identified, the next stage involves the identification of desired attributes for each of the processes. Performance standards are set for each process by using benchmarking techniques. Benchmarking ensures that the desired operational and product attributes are comparable with the best business practices in the industry.
Reengineering of business processes to achieve the desired results
In order to achieve these desired standards in business processes, organizations need to reengineer their current processes. The objectives of business process reengineering include reducing process cycle time, reducing the number of decision points, optimizing the information flow between different functions and departments, etc.
Evaluation of available ERP packages
Once the conceptual process of designing the business processes is over, the available ERP packages are evaluated to identify the package that will provide a comprehensive solution to the given organization's requirements.
For selection of a package, the following points should be given consideration:
Global presence: The package should be globally acceptable and it should perform to international standards.
Local presence: Though the ERP package should be internationally acceptable, it should also be able to handle country-specific business practices. Therefore, the package's performance in the local market should be examined.
Investment in R&D: The selection should also consider the amount of R&D efforts the ERP vendor has put into the package. The more the R&D efforts, the better will be the long-term operational viability of the package.
Target Market: When selecting an ERP package, the type of industry - process or discrete - it is designed for, should also be considered. If the package is designed for a particular type of industry, it is likely that it will have several industry-specific features. It reduces the customization efforts required.
Price: The price of adopting a particular package is the key to selecting the package.
Modularity: Many organizations, especially small and medium-sized organizations, may not want to purchase a complete package in one instance. They may prefer to implement the package in modules. In such cases, the modularity of the package i.e. the availability of the package in separate modules should be examined.
Ease and cost of implementation: As the implementation of ERP warrants a change in the organizational structure, the implementation process should be quick and trouble-free, and a smooth transition from the old legacy systems should be possible. A smooth transition ensures that the normal functioning of the business is not affected during the transition period. The cost involved in ERP implementation is not just one-time investment. The maintenance of an ERP system also requires considerable investment. The costs include consulting, process redesign, data conversion, training, integration and testing.
Installation of requisite hardware and networks: Once the package is selected, the hardware considerations are addressed. The hardware requirements include the servers, PC workstations, network equipment, etc. This is followed by the software implementation phase of the ERP package, as discussed below.
Implementation of ERP Packages
ERP implementation is a long process that demands the involvement of the entire organization. The steps involved in the implementation of an ERP package are listed below:
Formation of implementation teams
An implementation team should consist of personnel from IT and other functions along with implementation consultants. Project leaders, project managers and module leaders are selected from among the chosen people (implementation team) and a steering committee is formed.
The key activity of the steering committee is to monitor the implementation process continuously in order to identify deviations, cost overruns, resource requirements, etc. during implementation.
Preparation of implementation plan
Various elements of the implementation process are identified and a comprehensive plan is devised to cover various elements of the process. By using PERT/CPM techniques, various activities of the plan are scheduled. The plan should include
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Training of project teams
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Mapping business processes onto the software
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Function- or module-wise implementation
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Customization based on requirements
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Transferring data from existing systems
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Trial runs
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Parallel run
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Transition
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