Principles of Management
Introduction
ERP is a system for the seamless integration of all the information flowing through the company such as finances, accounting, human resources, supply chain, and customer information . The selection, procurement, and deployment of an ERP system are nothing but involvement of high risks in exchange for significant business and financial rewards . A successful ERP system can be the backbone of business intelligence for an organization because it can give managers an integrated view of the processes involved within it . The effective ERP implementation brings in reduction of cost improvement in quality, productivity & customer service, better resource management, improved decision-making, planning and hence organizational empowerment . Despite the wide spread applications and benefits of ERP systems, the statistics show that about 30% of ERP implementations have been successful. In order to overcome failures through comprehensive literature review 11 critical factors for successful implementation of enterprise systems were identified as ERP teamwork and composition; change management program and culture; top management support; business plan and vision; business process reengineering with minimum customization; project management; monitoring and evaluation of performance; effective communication; software development, testing and troubleshooting; project champion; appropriate business and IT legacy.
II. Project management
ERP is a management mode or techniques. Many companies regard ERP system implementation as a project management . The implementation of ERP projects involves various management functions, which inevitably leads to different levels of management reorganizations . Successful project management is about managing the risk. Project Management is the application of knowledge, skills, tools, and techniques to project activities to meet project requirements. This can be done by using a formal project management structure (PMS). One of the worlds famous PMS is project management body of knowledge (PMBOK), which is developed by Project management institute (PMI). This methodology includes 5 processes/phases of project management such as project initiation, planning, execution, control, and closing. Also it is comprised by 9 knowledge areas such as Project Integration Management, Project Scope Management, Project Time Management, Project Cost Management, Project Quality Management, Project Human Resources Management, Project Communications Management, Project Risk Management, and Project Procurement Management. The results from the study on project management strategies under PMBOK frame work by Fergal et- al, illustrates PMBOK as bit fit for ERP projects and also reveals that the importance of project governance and the need for a multi-level structure spanning both the cooperate and local levels. These structures would ensure the project to be directed properly & focused, and to reduce delays & rework due to the fact that timely problem resolution could be carried out.
Since ERP environment faces constant change and reassessment of organizational processes and technology and hence the project management method used with ERP deployments must provide adaptability and agility to support these evolutionary process and technology . The major problem with software development/deployment is managerial, but not technical. Therefore a method of augmenting structured project methods with agility to produce a new approach to managing projects is proposed by Alleman . This method is based on venture capitalist approach which includes: staged investments, managed risks & people (team involved). The author discovered that traditional IT project management waterfall model which includesplanning, change and stability had several erroneous assumptions. However he suggested that through planning in the presence of uncertainty, avoiding dysfunctional relationships and improper pretentions, we can overcome the flaws in traditional approach. By applying agile values, author proposed the following principles for managing ERP projects in agile manner: assume simplicity, embrace change, enabling the next effort, incremental change, maximize stakeholder value, manage with a purpose, multiple views, rapid feedback, working software is the primary goal and travel light.
III. Role of project manager
Jones et-al explained that the first six out of sixteen technology factors associated with software disasters are specific failures in the domains of project management, and three of the other technology deficiencies can be indirectly assigned to poor management practices. The top 10 ERP management headaches rank issues are project size, staffing, risk management, unreasonable deadlines, funding, organizational politics, scope creep, unexpected gaps, interfaces, and resistance to change . One of the basic principles for assuring the ERP implementation success is the appointment of the project manager, who should be most talented business manager. The characteristics of a successful project manager are flexible, disciplined, quick learner, good decision maker, ERP expert, having business experience, political clout, good formal education, well liked, and motivates staff . In order to make ERP project successful, the project manager must work efficiently in the following areas: deciding on project scope, managing risks, discovering gaps, the right staff, preventing brain drain, project scheduling, interface with other systems, monitoring progress, and managing chaos[20]. In addition, the focused management by project manager of the following critical activities that streamline the ERP project management will enhance the success of any ERP project: Embrace overall goals and objectives, defining requirements, review as is – to be, use proto education, business system test/conference room pilot(CRP), execute timely cut-over/conversion processes, and going live and beyond.