The life cycle of the Information system showcases a number of stages through which the development of project and use of information systems passes. Traditionally, the life cycle of Information system revolves around system study, project definition, programming, installation and several other post-implementation stages.
Steps involved in the Lifecycle of open source ERP processes are not easy. Right from the starting to the collapse of the ERP, there are a number of things that are to be given importance.
The process of ERP Implementation Life Cycle involves the application of enterprise resource planning. It is a step by step procedure and involves planning, analysis, implementation, design, operations, transit, etc. ERP implementation highlights various phases to implement an ERP System. Projecting the suitable ERP package is the initial stride towards the start of ERP Life Cycle.
An Infographic showing various stages of ERP Life Cycle. Source : http://synconics.com
An effective ERP life cycle involves following steps:
Stage 1- Evaluation and Selection- It’s a known fact that the cost involved in enterprise systems are quite high. But they are still considerable due to the effort of a comprehensive Request for Proposals (RFP) and Requirement Gathering processes. It’s very important for the success of your ERP that both system requisites and the implementation process are properly taken care of.
Stage 2-ERP Roll out- This is where actual development or coding takes place. It goes without saying that this stage takes the biggest chunk of the lifecycle in terms of time and effort. An initial rollout of an ERP system involves a number of sub-phases in itself, similar to usual SDLC. Starting with REP or Request for Proposal and vendor selection and extending upto going live and hand holding phase.
Some necessary matter concerning ERP Roll out stage that will have direct bearing of ERP lifecycle includes:
Scope for Scalability: Vendor’s commitment to future developments and financial health
Scope for Customization: Degree of matching of vanilla ERP to present business with a requirement of broad customization, specifically source code customization
Legalities and other technicalities: Assisting in Licence fees and later escalations
Stage 3- Testing and Optimization- Soon after the ERP roll-out stage comes a shake-out period where bugs and other issues are searched and rectified. More training and regular employee communication continue so as to showcase any misconceptions about policy change or procedure variation. It usually takes a long time for employees to adapt according to the changes. At least a period of 6 months or in some cases a year too is required by the employees to get used to with the new system.
Identifying “success” prior to reaching out to Optimization stage is always beneficial. Success should be defined by the measurable benefits that your company receives and what value does new system offers to the customers.
It is advised that the users should perform a proper after-implementation audit for initial six months. In order to properly assess the functioning of the new system, you must involve your IT department,customers, users and a selection of vendors. With the received feedbacks during the audit, you are likely to grow your wish list. Map it accordingly and implement the items.
Stage 4- Post Development Maintenance- This stage involves realizing the value of your system. This stage takes 6-10 years for completion, and sometimes even more. Users will be having the idea of the system. Changes like different workflows, new reports, etc. will continue. By entailing the licence fee to the vendor, service level agreement will cover the maintenance. However, the licence fee rapidly increases after some time and eventually adversely affects the TCO or Total Cost of Ownership.
Stage 5- Enhancements- This is the phase which overlaps with the phase of maintenance. Changed or new businesses result in moderate or minor system changes. Under such scenario, many changes can take place like an implementation of a whole new accounting system like IFRS (International Finance Reporting Standards), a regulatory need like Sarbanes=Oxley, enhancing the system with add-ons like Business Intelligence and Customer Relationship Management, etc. Beside business changes, technological changes also take place. At regular intervals, the new versions as well as releases may appear from Database platforms and Operating systems. ERP vendors regularly release product versions and patches that are required to be integrated with the existing system. This also involves moderate and minor efforts, real problems starts when a number of software objects gets custom-built during the implementation process. Retrofitting such objects to make them adaptable with following versions can turn out into a big migration exercise, involving both effort and cost.
Stage 6- Sunset or Retirement- With a passage of time, your organization will realize that the system is going obsolete and no longer meeting the business ends. Maybe, you are on an outdated version, which is no longer compatible. It can also be the case that your hardware has declined and due to an ageing of the system, it is the time that you should re-evaluate your demands and requirements. In this process, you tend to explore and look for other options, repeating the ERP Life Cycle.
Stage 7 - Re-implementation - Re-implementation is identical to the Roll Out phase, mentioned above. As the companies are organized in a much better way, they insist on carrying out the initial processes more professionally. They are likely to adopt a better vanilla version that requires very less customization, thereby ensuring a better and smoother ROI (Return on Investment).