ERP Book by Jyotindra Zaveri - Excerpts

ERP Book Excerpts – Second Edition July 2012

ENTERPRISE RESOURCE PLANNING

PROF. Jyotindra Zaveri

IT Consultant and Trainer
Pune, India

Second Edition: 2012

Himalaya Publishing House

Page 2 of 400


Copyright © 2007-2015 Zaveri Jyotindra. All rights reserved. No part of this book
may be reproduced, translated, converted into audio-video media, stored in a
retrieval system or transmitted in any form or by any means electronic,
mechanical, photocopying, recording, or otherwise without the prior written
permission of Prof. Zaveri Jyotindra.

Permission may be sought directly from Prof. Zaveri. Email j.zaveri@dnserp.com .

The export rights of this book are vested with Prof. Zaveri Jyotindra.

The DNS ERP Software is registered with the government of India and copyright law
protects the same. Any use of unauthorized source or DNS software is illegal. All rights are
reserved with Prof. Zaveri Jyotindra for the DNS ERP computer program.

Limits of liability and disclaimer of warranty:
Notice: The author and publisher of this book have tried best to ensure that the programs,
procedures, and functions described in the book are correct. However, the author and
publishers make no warranty of any kind, expressed or implied, with regard to these
programs or documentation contained in this ERP book. The author and publisher shall not
be liable in any event of any damages, incidental or consequential, in connection with, or
arising of the furnishing, performance or use of the ERP software package, procedures, and
functions. Product name mentioned are used for identification purposes only and may be
trademarks of their respective companies. All trademarks referred to in the book are
acknowledged as properties of their respective owners.

No responsibility is assumed by the author for any damage to persons or property as matter
of products liability, negligence or otherwise, or from any use or operations of any methods,
instructions, or ideas contained in the material herein. Because of rapid advances in the
Information Technology and business challenges, independent verification of methods
should be made.

The author has used its best endeavors to ensure that any URLs for websites referred to in
this ERP book are correct and active at the time of going to press. However, the author or
publishers has no responsibility for the websites and can make no guarantee that a site will
remain live or that the content is or will remain relevant.

First edition : 2009
Second edition: 2012

Published by Himalaya Publishing House Pvt. Ltd., India.

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This ERP book is available from:
Himalaya Publishing House Pvt. Ltd. Offices as follows

Mumbai Head Office

Anuj Pandey, Niraj Pandey, K N Pandey, D I R E C T O R S
Himalaya Publishing House Pvt. Ltd
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Foreword

Dear Mr. Jyotindra Zaveri,

I read carefully, and with keen interest your book on “Enterprise Resource Planning” so
painstakingly written by you. It throws a new light on the concept of Enterprise Resource
Planning and would be of great help to senior Managers as well as academicians. It covers
all the aspects of Enterprise Resource Planning (ERP) and therefore, would be a great
source of guidance to the readers concerned. This is a first ever kind of book I have come
across written in a scientific manner and presenting the same in a lucid and simple
language.

ERP as a concept and as a business process model is of recent development. You have
written the book specifically for the functional managers targeting the SME sector (Small
and Medium size Enterprises). This book exhaustively covers different modules in the
industries and actual data entry screens, reports, master files of the business processes and
sufficient case studies to understand the ERP in practice. You have wonderful track record
of rich and vast experience and knowledge of India and abroad.
You have amply demonstrated it in the book. The book can be definitely used by business
schools as a reference book for ERP. It is useful to corporate to follow the steps given by
you in order to reap the benefits of ERP in their organization. The chapter regarding the
Humor is an interesting addition to the book not to be found commonly in such reference
books.

I would certainly like everyone concerned to use this book for reference purposes.

Please accept my appreciation and congratulations for writing this book on a valuable
subject.

Regards,

Dr. P. C. Shejwalkar,

Director – IME, President ASM. Ex –Dean
Faculty of Management & Professor Emeritus of Commerce & Management Sciences,
University of Pune.

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Preface

India Inc. is growing. SME are growing faster. In the midst of the Internet revolution, they
are caught between the two methods of doing business. One is bullock cart method (legacy
procedures) and the other is business process driven method.

This book gives the reader the basic as well as advanced concepts of ERP. The business
logic is prepared from the business rules approved by the top management. The entire
organization, business partners, associates, employees, work as per the system defined by
the business rules. The ERP captures these business rules. ERP software system will now
ensure that everybody follows the same. ERP and ISO procedures go together. ERP is
complete integrated business management software. This manual intends to define the
concept and explain the logic on which ERP is designed and customized for a typical
organization, especially the manufacturing business, as this poses the biggest challenge in
deploying ERP on the shop floor.

What is DNS?
The name DNS or the Digital Nervous System is mentioned in the book ‘Business @ speed
of thought’, written by Mr. Bill Gates. The ERP is like the nervous system of the human
body for the business. Reader will find the word DNS used in the book as synonym to ERP.
MIS or the Management Information System in the business organization is the result of
good ERP software. All kinds of organizations are using ERP to get good MIS. For instance,
hospitality industry, hospitals, airlines, institutes, etc. This book also deals with the
manufacturing business, which is yet unexplored. The supply chain management (SCM) is
also one of the key business processes that are integrated in a good ERP system.

There is a need for ERP book that give practical guidelines. Managers do not understand
the idea that manufacturing activity can be viewed as a process and then improved. Once I
had a chance to talk to someone in an MNC food chain joint. He showed me a manual
where it was clearly written “serve the glass of the soft drink with four cubes of ice and put
in the left side of the plate.” There are not many SME organizations that have bothered to
make a proper ‘SOP’ (Standard Operating Procedures) manual. Sometimes the MD argues
with me, ‘what is there to write’? In other words, hardly any document is available.

This book does not discuss the hard-core programming used in the ERP software. Bits and
bytes, tables of the backend RDBMS is not described in this book. This book is not for a
developer who is looking for programming techniques used in ERP.

Jyotindra Zaveri, Pune
j.zaveri@dnserp.com

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Acknowledgements

The author would like to thank the team at DNS e-Business Consultancy for their help in the
creation of this book. Many thanks to the reviewers who have greatly assisted in
developing the book. I thank Dr. P. C. Shejwalkar to read the book and write the foreword.
I thank Mr. Shriniwas Rairikar (MCCIA), Dr. A. P. Ghose to give me guidance, especially
stressing focus for the MBA students. I thank Dr. Milind Oka for taking his time for
reviewing this book and give valuable suggestions.

Care is taken to alter the actual data so that real name or actual information is not
disclosed. However, in some case of screen dumps or showing graphics image of ERP input
/ output, some name may also appear, but the care is taken that the same does not harm
the businesses. Especially while presenting case studies, organization may not like to
publish the name directly, so I have avoided taking the name of the organization wherever
possible.

I would like to thank Ms. Sulochana, Ms. Poonam, (Mumbai) and Mr. Surendra K. (Pune) of
Himalaya Publishing House for publishing this ERP book.

Effort has been made to trace the owners of copyright material, in a few cases this has
proved difficult. I take this opportunity to offer my apologies to any copyright holders
whose rights I may have unwittingly infringed.

Jyotindra Zaveri

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Learning Objectives

“What is in it for me?” Upon completion of this book, reader will be able to:

1. Describe the concept of ERP.

2. Define key terms as they relate to ERP.

3. Understand the Material Requirement Planning and supply chain
management.

4. State the benefits of ERP.

5. State the pitfalls of ERP implementations.

6. Understand the need for change management or Business Process
Reengineering.

7. Learn about the MIS or Management Information System.

8. Understand the Total Cost of Ownership (TCO).

9. Write a business case to justify an ERP implementation

10. Align strategic goals, people, knowledge processes, and internal systems

11. Concept of business processes linking with other processes.

12. Understand a key business processes. Improve and simplify a business
process. Apply the result of business process analysis to an ERP
implementation.

13. Explain the interrelationships among the core business processes of sales
order or Order Receipt Information or Order Acceptance, Bill of Materials
(BOM), and work order to production.

14. Describe the technological infrastructure requirements in implementing ERP.

15. Describe project management and its use in implementing an ERP system.
Describe steps necessary to successfully implement an ERP system

16. Describe the roles and responsibilities of the key organization players or
stakeholders.

17. Describe how ERP can be used to achieve and sustain competitive advantage.

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About the book

Some companies use information to innovate, control costs, or capture new markets.
Others gather and evaluate information, but seem unable to translate data into productivity.
In this ERP book, the author examines how companies use the management information to
gain the competitive edge.

Enterprise Resource Planning (ERP) helps the organization, especially manufacturing
companies to manage the growth. There will be one more ‘w’ in the WWW’ that is wWWW,
the wireless-World-Wide-Web. SME cannot keep on using the bullock cart method of doing
business anymore.

What is new in this ERP book?
Unlike other ERP textbooks, this book gives actual data entry screens, reports, and master
files details for practical learning. This book is a good reference for various key functions
managers, such as accounts, purchase, sales, production, etc. It is not just a book but also
a companion for corporate commandos. This ERP book might not seem extra-ordinary, but
it is. Business processes integrated in ERP should have already been demystified, but it has
not been.

What does this ERP book offer to lecturers, faculties, consultants?
The book is projected to be a comprehensive guide to all aspects of deploying ERP within an
organization. Reader will find that this ERP book has a good range of case studies to
support their teaching.

Who should use this ERP book?
This book is useful for existing ERP users and ERP power-users as well. Senior managers
and directors, CEO, CFO, COO, seeking to deploy ERP to benefit their organization. For
companies who have deployed ERP but not able to understand why real benefit is not seen.
Study of this book will reveal the mistakes made by management, ERP coordinators, ERP
task force, or ERP steering committee. Use this book before, during and after ERP is
deployed, as a reference material. The knack to making informed decisions is necessary for
success. Yet many times, managers make vital decisions without real information. Use this
book to understand how you can use ERP to enhance your decision-making aptitude. This
book will be of immense value to professionals dealing with ERP implementation, I. T.
professionals, mangers handling sales and distribution, logistic, supply chain and finance.

MBA Students:
This ERP book will be very useful to the B-Schools students who want to pursue their MBA.
All these aspiring managers must know ERP well. In the interviews now on companies will
not ask whether you know MS office or not, they will ask, “Do you know ERP”? This will be
useful for managers working in small and medium size enterprises (SME).

ERP Case studies:
The author has worked on live ERP projects for over 200 organizations, in India and abroad.
This is result of some twenty years of practical ERP experience. The author had an
opportunity to offer I. T. solutions to small and large organizations, private and Government
organizations. The ERP book also includes several case studies to illustrate various points in
the book. This important book gives tactics about ERP implementation. The need has

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never been more crucial. Global economic scenario is unpredictable. The competition is
increasing. Business executives are challenged to leverage I. T., to improve the enterprise
performance. This book attempts to answer questions such as, ‘How do you become a
strategic ERP consultant, that enables efficient business management and improve
operational efficiency?’ ERP is also evolving. Author discusses the emerging developments
and compelling ‘Business Process Management’ (BPM) for success.

What can ERP do for the SME?
Act confidently. Improve operational efficiency. Give the enterprise the edge it needs to
succeed. Study this book to see why even small and medium business (SMB) units are
using ERP software to achieve a competitive advantage.

The decision making process is enriched if additional, relevant information is available.
However, collecting information is costly. Hence, cost of additional information need also to
be controlled. ERP will help user in this aspect immensely. Decision making under
uncertainly will be facilitated. ERP is synonym to the ‘DSS’ or Decision support system.

This ERP book explains how ERP as a management tool, in a SME is a powerful and strategic
set of applications that provides business visibility with real-time personalized access to
enterprise data, for the purpose of analyzing, and benchmarking customers, suppliers, and
the overall business' performance.

This book discusses the common questions asked, to run a manufacturing company
efficiently: Do you get information when you want? Do you have islands of information? Is
stores-in-charge able to give you correct quantity of raw material in stock, as of now? Is
purchase order linked to material inwards? Is inventory and accounts integrated?

The companion website:
Faculty and students can use the online resource for this book at www.dnserp.com. This
companion website will be helpful for students as well as lecturers. Make the most of your
studies.

This book attempts to answer all questions about ERP that you wanted to ask, but did not
know whom to ask….

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About the author

Prof. Jyotindra Zaveri (a.k.a. Jyoti) - IT consultant and trainer. Computer Engineer,
(Germany). IT professional since...1975.

Specialist in ERP and Digital Marketing.

He has been always working with innovative technologies in IT to build a digital eco system, to
empower users. He has mastered fifteen digital platforms and specializing in topics such as Social
Media, ERP, CRM, and e-Commerce.
He is specializing in digital platforms with a passion for tapping the power of the social media and
related technologies and applying them for business development.
Having lived through every avatar of Internet Marketing, he can bring a depth of online experience;
rare among today’s ‘copy-paste’ culture.
He is passionate about Business Process Re-engineering (BPR) and challenges the legacy methods.
He enjoys working with motivated and inspiring people providing creative solutions to business
needs.
He offers business solutions rather than solving IT challenges.
He lives on the web: Always found stuck with his Apple iPhone, laptop, airplane seat, or combination
of all these.
Visiting faculty in India and Germany.
Over 36 years of experience in IT, combined with academic credentials in Electronics and Electrical
Engineering from VJTI, Mumbai, India.
See month-by-month and year-by-year track-record since ...1975
http://www.dnserp.com/track_record.htm
He has written seven books.
IT consultant with knowledge of computer hardware, software and Internet technologies; rather a
unique combination.
Travelled extensively around the word: Bahrain, France, Germany, Italy, Japan, Malaysia, Nederland,
Singapore, Switzerland, Thailand, UAE, UK, and USA.
After completing studies, his first job was in IBM (1975). He was specially trained in Leipzig,
Germany.
He was specially invited by Microsoft to meet Mr. Bill Gates in Mumbai (his first visit to India), on 5
March 1997.
He receiving the Premium Channel Partner Award from Intel From Mr. Atul Vijaykar, President, Intel
Asia Electronics Inc., May 1998.

Specialties:

Digital platforms for marketing and training, Web 2.0, SEO, E-business, E-commerce, ERP, Social
media marketing strategies, Cyber branding, MIS, Supply chain management, Change management
(BPR).

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Book review
I appreciate Prof. Jyotindra Zaveri for making immense efforts in authoring the book
"Practical Guide to Enterprise Resource Planning". It reflects several years of experience
and sincere efforts to present the complex subject in simple language loaded with live
cases.

Prof. Jyotindra Zaveri has been helping enterprises, especially from the Small and Medium
Enterprises segment in implementing ERP to gain competitive advantage. Several cases in
the book clearly reflect the dexterity. It is especially useful in the highly dynamic and
demanding market environment of the 21st century that SME have to face.

This book is a real treasure of the very best concepts from academics, relevant and
insightful case studies, and powerful prescriptions for practicing managers. Prof. Jyotindra
Zaveri has tried his best to keep away the hype and jargon. Reader can easily navigate the
world of ERP.

B-School students as well as practicing managers will certainly find this book very
interesting especially with its own companion website.

Dr. Milind M. Oka

[Dr. Oka holds Ph.D. from University of Pune. He is Certified Assessor of Quality Systems.
He has rich experience of over 35 years. He is an Academician, Management Consultant,
Author, and Corporate Trainer.]

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Book review

The book on ERP by Prof. Jyotindra Zaveri presents in a very lucid way and simple language
various aspects of ERP. Especially the highlights seamless integration of business processes
in ERP by using more than 300 diagrams / pictures / tables and giving practical case studies
and examples from purchase, accounts, exports, material management, HR and all
departments, which has increased its usefulness and value.

I can safely say that even a layman like me or anybody working in ERP system will get all
practical hints and guidelines regarding what, why, where, when and why of ERP.

Mr. Shriniwas Rairikar, M. Com., MPM, LLB, DLL & LW,
ISO 9001-2000 Lead Auditor. ISO 9001-2000 Diploma (U.K.).

Senior Director, MCCIA.

Founder Director – Dasbodh Management academy.

Book review

Dear Sir,

At the very outset, I would like to congratulate you for the launch of your book.

I have just one comment - being an institute in e-business, of all the books on ERP that I
have gone through, yours might be in the top 10 books that I have read so far. Many of
them are by international authors also.

Once again, congratulations for the launch of the book. I am sure it will be a great success.

Thanking you,

With warm regards,

Jai Singh
Director IIeBM, Management Institute.

Page 15 of 400


Book review

The recognition of ERP as a business application does deserve a special mention. The most
crucial factor in the whole system of ERP is the implementation aspect. The implementation
phase can decide the fate of ERP and its success.

The success of an ERP implementation again lies on the speed at which it is introduced and
applied. For this, necessary training needs to be imparted to all concerned who can
implement ERP at the fastest speed. This training converted into practice by
implementation of ERP would reveal the real advantages that an organization would receive
in terms of cost control and cost reduction at every stage and improvement in profitability.

The present work is the outcome of Prof. Zaveri’s hard work of over a period of nearly two
decades in this area of ERP. The contents of this book depict his deep knowledge about the
subject. His step-by-step approach with logical explanation at every stage leads a reader to
end up with a thorough understanding of the subject. Even a nonprofessional can
understand the language that he has used in his book.

Prof. Zaveri’s interaction with various industries as well as students has helped him to
assimilate his ideas in writing this book.

I encourage and recommend SMEs, corporate, and others to read this book, understand the
subject thoroughly and to implement ERP at their organizations. This book would also be
extremely useful to students to understand the subject since it is written in a most lucid
way.

I wish all success to Prof. Zaveri in launching this unique book for the first time in the
market.

Dr. A. P. Ghosh
Director
Balaji Institute of Modern Management (BIMM)
Sri Balaji Society, Pune

[Dr. A. P. Ghosh has a Ph. D. in Financial Management from University of Pune. He is
certified corporate director from “World Council for Corporate Governance” London. He has
authored many books on finance and management].

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CONTENTS
PART I ..................................................................................................................................................................... 22
CHAPTER 1. INTRODUCTION ..................................................................................................................... 24
HOW TO USE THIS BOOK? ........................................................................................................................... 24
ERP Definition ................................................................................................................................................ 25
ERP vendors.................................................................................................................................................... 27
What is the difference between SAP and ERP? ................................................................................. 27
ERP customization ........................................................................................................................................ 28
ABOUT SMALL AND MEDIUM SIZE COMPANIES ............................................................................. 29
COMPUTER NETWORK SYSTEM SCHEMATIC ..................................................................................... 32
IT INFRASTRUCTURE RECOMMENDATIONS CHECKLIST ........................................................... 33
ERP IMPLEMENTATION PROJECT MANAGEMENT ........................................................................... 35
Implementation Strategy .......................................................................................................................... 36
Roadmap .......................................................................................................................................................... 41
CHAPTER 2. MASTERS DATA AND PRINTING CONCEPTS .......................................................... 45
MASTER DATA ENTRY FORMS.................................................................................................................... 45
PRINTING (HARDCOPY) ............................................................................................................................... 49
CHAPTER 3. CHANGE MANAGEMENT ..................................................................................................... 51
BPR OVERVIEW ................................................................................................................................................. 54
WHAT USER WANTS? ..................................................................................................................................... 57
CHAPTER 4. TCO OF ERP .............................................................................................................................. 58
CHAPTER 5. ERP IMPLEMENTATION ..................................................................................................... 60
OATH ........................................................................................................................................................................ 60
WHY ERP PROJECT FAILS ............................................................................................................................ 61
ERP IMPLEMENTATION TIPS FOR SUCCESS ..................................................................................... 66
IMPORTANT INSTRUCTIONS ..................................................................................................................... 67
CUSTOMIZATION .............................................................................................................................................. 69
IMPORTANCE OF QC DATA .......................................................................................................................... 73
CRP ........................................................................................................................................................................... 75
TEST RUN: CHECKING AND MARKING .................................................................................................. 77
PROOF OF CONCEPT FILE ............................................................................................................................ 79
DRAFT OF LETTER TO INFORM VENDORS / CLIENTS .................................................................. 83
CHAPTER 6. GETTING STARTED ............................................................................................................... 84
ERP CONCEPT ..................................................................................................................................................... 85
Material outward ........................................................................................................................................... 87

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CHAPTER 7. SCOPE OF ERP MODULES.................................................................................................. 88
CHAPTER 8. ERP DOCUMENT FLOW AND MATERIAL FLOW ................................................... 112
PART II ................................................................................................................................................................. 114
SECURITY MODULE & CLOSING BALANCE ....................................................................................... 116
CLOSING BALANCE ........................................................................................................................................ 116
CLOSING STOCK .............................................................................................................................................. 119
CHAPTER 9. PROCUREMENT MODULE ................................................................................................. 123
PURCHASE MASTER.............................................................................................................................................. 125
Vendor Type Master .................................................................................................................................. 125
Vendor Master ............................................................................................................................................. 126
PURCHASE TRANSACTIONS ................................................................................................................................. 129
GRN (Goods Receipt-cum-inspection) ................................................................................................ 138
Job Order ....................................................................................................................................................... 138
PURCHASE REPORTS ............................................................................................................................................ 139
CHAPTER 10. IMPORT PURCHASE MODULE .................................................................................... 139
CHAPTER 11. MATERIAL MANAGEMENT (MM) MODULE .......................................................... 141
INVENTORY MASTER ............................................................................................................................................ 142
Item Master .................................................................................................................................................. 143
Finished Goods (Products) ...................................................................................................................... 144
Location concept ......................................................................................................................................... 146
Subcategory Master................................................................................................................................... 147
UOM (Unit of Measurement) Master.................................................................................................... 148
INVENTORY TRANSACTIONS ................................................................................................................................ 149
Goods Receipt Note (GRN) / Purchase Bill data entry screen ................................................... 149
Stock Transfer Challan (STC) ................................................................................................................ 150
Purchase return ........................................................................................................................................... 150
Stock Adjustment Note ............................................................................................................................ 151
INVENTORY REPORTS........................................................................................................................................... 151
GRN OR PV Register .................................................................................................................................. 151
Item Ledger .................................................................................................................................................. 153
Stock Statement ......................................................................................................................................... 153
MIN Register: ............................................................................................................................................... 154
Stock Adjustment Note Register: ......................................................................................................... 154
CHAPTER 12. BOM MODULE ..................................................................................................................... 155
CHAPTER 13. SUBCONTRACTOR OUT MODULE ............................................................................. 175
CHAPTER 14. PRODUCTION MODULE ................................................................................................. 188
MAKE TO ORDER- MAKE TO STOCK .................................................................................................................... 191
E-MANUFACTURING.............................................................................................................................................. 193
ERP PRODUCTION MODULE LOGIC .................................................................................................................... 193
ASSEMBLY PRODUCTION ..................................................................................................................................... 194
PRODUCTION MASTER ......................................................................................................................................... 194
MACHINE MASTER................................................................................................................................................ 195
LOCATION ............................................................................................................................................................. 195
PRODUCTION TRANSACTIONS ............................................................................................................................. 195
WORK ORDER ...................................................................................................................................................... 195
PRODUCTION ENTRY ............................................................................................................................................ 196
SUBCONTRACTOR OUT ....................................................................................................................................... 196

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FAQ FOR PRODUCTION MODULE ......................................................................................................................... 198
PRODUCTION REPORTS........................................................................................................................................ 200
Work Order Register.................................................................................................................................. 200
PROCESS PRODUCTION .............................................................................................................................. 201
PRODUCTION MASTER ......................................................................................................................................... 202
MACHINE MASTER EXPORTED TO EXCEL SHEET IS SHOWN BELOW: ................................................................ 202
OPERATOR MASTER ............................................................................................................................................. 203
PROCESS PRODUCTION TRANSACTIONS ............................................................................................................ 203
WORK ORDER ...................................................................................................................................................... 203
Production Planning ................................................................................................................................... 204
Process Production Entry ......................................................................................................................... 205
STAGE WISE INSPECTION .................................................................................................................................... 206
PRODUCTION REPORTS........................................................................................................................................ 207
Work Order Register.................................................................................................................................. 208
Production Register.................................................................................................................................... 209
MRP .................................................................................................................................................................. 209
Production Indent ....................................................................................................................................... 211
CHAPTER 15. ORDER FULFILLMENT MODULE ................................................................................ 215
Customer Type Master ............................................................................................................................. 216
Coordinator master .................................................................................................................................... 218
Sales Engineer master.............................................................................................................................. 218
Dealer Master ............................................................................................................................................... 222
Delivery Mode Master ............................................................................................................................... 222
Lead ................................................................................................................................................................. 224
Delivery Schedule....................................................................................................................................... 229
Sales Menu .................................................................................................................................................... 230
Sales Invoice ................................................................................................................................................ 231
Commercial invoice.................................................................................................................................... 232
Sales Quotation ........................................................................................................................................... 233
Sales Invoice ................................................................................................................................................ 237
Return Goods note..................................................................................................................................... 240
Purchase Return (Excisable) Invoice. ................................................................................................. 241
ORDER FULFILLMENT (SALES) REPORTS ........................................................................................................... 242
Invoice Register .......................................................................................................................................... 247
Enquiry register ........................................................................................................................................... 248
Sales Invoice Register .............................................................................................................................. 248
Quotation Register ..................................................................................................................................... 250
OA (ORI) Register ...................................................................................................................................... 251
Reverse Invoice Register ......................................................................................................................... 251
ORI OR OA Status Register .................................................................................................................... 251
Ledger ............................................................................................................................................................. 251
Sales Analysis .............................................................................................................................................. 254
Dashboard ..................................................................................................................................................... 254
EXPORT MODULE ............................................................................................................................................ 256
CHAPTER 16. SUBCONTRACTOR IN ..................................................................................................... 260
MATERIAL INWARD TRANSACTION .................................................................................................... 262
CHAPTER 17. ACCOUNT MODULE .......................................................................................................... 263
CHART OF ACCOUNTS RECOMMENDATIONS ....................................................................................................... 267
ACCOUNT MASTER ............................................................................................................................................... 269

Page 19 of 400


Group (Schedule) Master ........................................................................................................................ 269
Subgroup Master ........................................................................................................................................ 270
GL Master ...................................................................................................................................................... 271
Details master: Narration Master ......................................................................................................... 271
ACCOUNT TRANSACTIONS ................................................................................................................................... 271
MONEY RECEIPTS ................................................................................................................................................. 273
ADJUSTMENT WINDOW ........................................................................................................................................ 274
JOURNAL VOUCHER .............................................................................................................................................. 275
PAYMENT VOUCHER ............................................................................................................................................. 276
CONTRA ENTRY .................................................................................................................................................... 277
ADJUST OPEN SALES INVOICE ........................................................................................................................... 277
ADJUST OPEN PAYMENT VOUCHER ..................................................................................................................... 277
CREDIT NOTE ....................................................................................................................................................... 278
DEBIT NOTE ......................................................................................................................................................... 279
EXPENSE VOUCHER .............................................................................................................................................. 281
ACCOUNT REPORTS ............................................................................................................................................. 282
CREDIT NOTE REGISTER ..................................................................................................................................... 282
DEBIT NOTE REGISTER ....................................................................................................................................... 283
SUB LEDGER TRIAL BALANCE ............................................................................................................................. 283
GENERAL LEDGER ................................................................................................................................................ 284
BANK BOOK .......................................................................................................................................................... 284
CASH BOOK .......................................................................................................................................................... 284
TRIAL BALANCE .................................................................................................................................................... 284
CONTRA ENTRY REPORT ...................................................................................................................................... 285
CREDIT NOTE REGISTER ...................................................................................................................................... 285
DEBIT NOTE REGISTER ........................................................................................................................................ 285
JOURNAL VOUCHER REGISTER ............................................................................................................................ 285
CUSTOMER FULL LEDGER .................................................................................................................................... 286
CHAPTER 18. ACCOUNTS POINTS ......................................................................................................... 287
CHAPTER 19. SALES TAX AND VAT ...................................................................................................... 291
CHAPTER 20. EXCISE INTEGRATION .................................................................................................. 294
DAILY STOCK ACCOUNT OR DSA REGISTER ................................................................................... 297
GAR 7 – CHALLAN .......................................................................................................................................... 298
CHAPTER 21. SARBANES-OXLEY ........................................................................................................... 301
CHAPTER 22. AFTER SALES SERVICE MODULE ............................................................................. 302
MACHINE HISTORY CARD OR HC .......................................................................................................... 302
CHAPTER 23. PAYROLL MODULE ........................................................................................................... 308
CHAPTER 24. AUTOMATIC EMAIL ALERT .......................................................................................... 317
CHAPTER 25. ERP MAJOR TRANSACTIONS LIST .......................................................................... 319
CHAPTER 26. OTHER MASTERS .............................................................................................................. 321
CHAPTER 27. BACKUP .................................................................................................................................. 323
CHAPTER 28. ERP BLOG .............................................................................................................................. 329
PART III ............................................................................................................................................................... 331
CHAPTER 29. CASE STUDIES ................................................................................................................... 332
ERP FOR CONSTRUCTION INDUSTRY ................................................................................................................. 333

Page 20 of 400


ERP FOR A CORRUGATED BOX MANUFACTURING COMPANY .............................................................................. 334
ERP FOR VADA PAV COMPANY ........................................................................................................................... 342
ERP FOR LENS MAKING COMPANY ...................................................................................................................... 346
ERP FOR OEM SUPPLY OR MAKE TO ORDER ...................................................................................................... 353
ERP IN PRECISION MACHINING MANUFACTURING ............................................................................................. 355
ERP FOR CHEMICAL INDUSTRY ........................................................................................................................... 356
ERP FOR A UPS MANUFACTURING ..................................................................................................................... 357
ERP FOR ELECTRONIC CONTROL INSTRUMENTS MANUFACTURING................................................................... 359
ERP FOR AN INDUSTRIAL SYSTEM MANUFACTURING......................................................................................... 360
ERP FOR SPM MANUFACTURING ........................................................................................................................ 362
ERP FOR FURNITURE MANUFACTURING ............................................................................................................. 363
ERP FOR TOYS MANUFACTURING ....................................................................................................................... 365
CHAPTER 30. MC DONALD’S STORY..................................................................................................... 368
CHAPTER 31. AUTOMOBILE ENTERPRISES ..................................................................................... 371
CHAPTER 32. RFID ......................................................................................................................................... 372
CHAPTER 33. QUESTIONS ......................................................................................................................... 373
CHAPTER 34. ERP DATA VALIDATION ............................................................................................... 379
CHAPTER 35. HUMOR ................................................................................................................................... 387
GLOSSARY........................................................................................................................................................... 391
INDEX .................................................................................................................................................................... 397

Page 21 of 400


Part I

Island of information

WHY E.R.P ?
BECAUSE OF ISLANDS OF INFORMATION

My growth
will be OK . No?

Material Management
Finance

Corporate office
Production
Sales Group
Figure 1: Why ERP? Islands of information.

Page 22 of 400


Seamless Integration of business processes in ERP

SECURITY CRM
VAT COST SHEET
ISO / Q C ESTIMATE

LOCAL Sub-Contractor Order
OUT PAYROLL fulfillment
PURCHASE Accounts

HR

Import BOM EXPORT
Purchase SUB-
Production CONTRACTOR
IN

Material PLANT Automatic After Sales
Multi- MAINTENANCE Service
Management location E-Mail
Send /
Receive data
Alerts
Resource Sales &
MRP Distribution
Matrix
EXCISE E-Business

Page 23 of 400


Chapter 1. Introduction

How to use this Book?

This ERP book gives overall scope of generic ERP software package. To understand the ERP
in-depth the author has used a package called DNS. Hence, ‘DNS’ appears in many screen
shots. Actual print-screen of the data entry screen and the actual layout of the outputs are
given for key procedures. The explanation of each ERP module gives the business blueprint
where as the printouts shown gives the ‘Proof of Concept’ (or POC).

This Business Blueprint and POC will also be related to a particular ‘avatar’ (or version) of
ERP and make of the ERP. This may vary depending on the ERP vendor, versions, etc.

This is a very important reference document and therefore it is necessary that the ERP
implementer consultants, ERP coordinator, and ERP users all study the concepts well before
embarking on to the ERP software deployment. This ERP book is a good companion during
the software installation.

This book is organized into three parts:

1. The first part discusses the ERP implementation methodology and overview of
implementation of ERP system for effectiveness of ERP systems.

2. The second part discusses details about ERP modules or business processes such as
accounts, purchase, sales, production, etc. These chapters are further divided into
sections containing information about master, transaction, and report.

3. The third part gives some interesting case studies.

Further learning resource: You will find many interesting PowerPoint presentations and
video lectures of the author here in his free e-Learning website
http://www.dnserp.com/erp_presentaions.htm

Additional ERP groups and blogs to learn latest:
https://www.facebook.com/groups/discuss.erp Join Facebook Group ERP.
http://www.facebook.com/dnserp Like Facebook Page ERP.
http://dnserp.wordpress.com Subscribe ERP Blog.
http://www.twitter.com/followERP Follow on Twitter.
http://linkd.in/lFj98r Join ERP, E-business Forum LinkedIn Group.

Welcome to ERP

This ERP book is meant for both Power User (ERP experienced user) as well as First Time
User. This book will introduce all important concepts and features of this advanced ERP
package. The ERP package versions (avatar) may undergo changes as the development,
customization, and implementation take place. The book will also discuss many advanced
concepts of ERP software.

Page 24 of 400


The DNS is short for Digital Nervous System. The word DNS is synonym with the word ERP.
Throughout this book, reader will find the word DNS used instead of ERP.

ERP is all about making smarter as well as faster decisions. To make well-informed and
timely decisions, you need instant access to accurate information from every function in
your enterprise. You need to focus on urgent tasks, instead of fire fighting. This book
examines how to gain reliable, accessible information using ERP, and how to use that
information to make better decisions, to a stronger competitive position.

What is the relation of MIS and ERP?

MIS (Management Information System) is a system to give information to managers for
making decisions. ERP ensures the data capture in chronological order. ERP ensures that
these managers get MIS. ERP is management software that will ensure correctness of input
data and completeness of input data. Therefore, MIS is the output of ERP. What user will
see on the computer screen is real time information. Behind the scene is business process
management (BPM) done by the Enterprise Resource Planning software.

ERP Definition
There seems to be no universally accepted definition of the ERP software, but Deloitte
Consulting has defined ERP as follows:

An Enterprise Resource Planning system is a packaged business software
system that allows a company to:

• Automate and integrate the majority of its business processes
• Share common data and practices across the entire enterprise
• Produce and access information in a real-time environment

Source: Deloitte Consulting, New York, 1999.

ERP definition by the author:

“Enterprise Resource Planning software is complete integrated business management
software, which captures data in chronological order, and is used to link businesses
processes automatically, and give real time information, to authorized user”.

Enterprise Resource Planning System is a multi-user, multi-location, and multi-company,
software solution.

Page 25 of 400


ERP-centric organization Non-ERP-centric organization

Understands that integrated business Does not fully appreciate the contribution
processes add significant value to the that integrated business process make to
organization. Understands that business the organization and the realization of the
processes are a significant contributor to organizational strategy.
the fulfillment of an organization’s
strategy.

Incorporates ERP into the management Management of business processes is not
practices of the organization. the primary focus.

ERP and Internet were probably the two most important information technologies to emerge
into widespread use in the 1990s.

Page 26 of 400


In 1999, total revenue from the ERP software and services market was US$18.3 billion
and US$ 19.9 billion in the year 2000. ERP implementation costs are often reported to
be five to ten times the cost of software licenses. If so, organizations worldwide spent
something like US$100 billion per annum on ERP software systems. In short,
organizations around the world have made huge investments in ERP software systems in
the past decade.

Source: Second wave ERP published by Cambridge

ERP vendors

There are hundreds of software companies offering ERP solutions. There are two kinds of
ERP companies. (1) ERP software developing organizing and (2) ERP implementing
partners.

Some examples of ERP vendor companies:
SAP, Oracle Apps (this includes PeopleSoft and JD Edwards), Microsoft Dynamics (Navision),
Baan, etc.

Some examples of the ERP implementer partners:
Siemens InfoTech, PwC, Infosys (recent acquisition of Axon, for instance), etc.

What is the difference between SAP and ERP?

This is wrong question. It is like asking, “What is the difference between a car and Honda
Accord?” Honda Accord is one of the models of cars. Car is a generic name given to
vehicle. Similarly, ERP is generic name given to enterprise management integrated
software.
Please note that SAP is a well-known, leading ERP company in the world. But, SAP is not
the only ERP vendor. There are many ERP companies. SAP is one of the ERP companies in
the world. There are hundreds of them. ERP is a generic name of the business
management software. SAP is a specific name of the one of the companies, which has
developed ERP software. Therefore, it is wrong way to ask, “What is the difference between
SAP and ERP?” One may ask a question, “What is the difference between SAP and MS
Dynamics?”? That makes more sense.

SAP Certification:

No doubt, SAP is considered as # 1and learning SAP ERP will be a feather in your cap,
however, (first you need the cap). Many students in India unfortunately are carried away
by the SAP brand name without understanding that, just by sitting in the Mercedes car, you
can’t learn driving. Make sure that ERP certificate is backed by adequate practical training
and at least two years of work experience. A fresher with an SAP certificate is a sad joke!

Page 27 of 400


Group 1 Group 2 (also referred as Group 3
Tier II)

SAP Epicor ABAS
Oracle Sage Activant Solutions Inc.
Oracle eBusiness Suite Infor Bowen and Groves
Oracle JD Edwards IFS Compiere
Oracle Peoplesoft QAD Exact
Microsoft Dynamics Lawson NetSuite
CDC Software Visibility
CGS
Hansa World
Consona
Syspro

ERP customization

Adding new requirements is called customization. This may be non standard feature. This
non-standard
involves changing software codes. It can range from relatively simple changes, such as
developing very special reports, through major changes, such as changing the program
,
source code itself.

ERP software is a semi-finished package The user organization must ‘configure’ to their
finished package!
needs. This is also referred as parameterization, enabling, or disabling certain business
process. This configuration or initial setup procedure will allow user to use the package as it
ation
is.

An implementation that involves configuring but not customizing the ERP is called a ‘Vanilla
implementation’. This is fastest and cheapest way to get into ERP for SME.
.

Although most ERP software are standard software package, in practice it is observed
that 80% to 90% procedures are standard and can be used as it is. About 10% to 20%
procedures need to be customized (changed) during the implementation.
implementation. These
changes (or fine-tuning) will depend on many factors such as final product, current
tuning)
legacy procedures, maturity level of senior executives, kind of customers, etc.

Page 28 of 400


About Small and Medium size companies

Corrugated Box Industrial springs n Toys and games

Safety Valve Special Purpose Machine Firefighting equipment

Eye lens Vada Pav UPS and Inverter

Figure 2: Small and Medium Sized companies products

Page 29 of 400


Page 30 of 400


Small and Medium size companies are using ERP to gain competitive advantage.

Many SME or small and medium size companies in India are growing. They all need
complete integrated business management software to manage that growth. The company
may be engineering, making plastic toys, making lenses, or discreet products, all need ERP
software.

Why ERP?

• Traditional accounting packages are ‘Financial reports-centric’. They are primarily
designed to inform management of a company’s financial condition long after it has
conducted its business.
• On the other hand, ERP adopts a day-to-day perspective. It provides strategic
information and tools in real-time, when you need it the most.
• ERP is answer to the following frequently asked questions

Do you get information when you want?

Do you have islands of information?

Pune emerges as major hub for German companies: Pune has emerged as the city
with the single highest concentration of German companies in India. A significant
number of prospective new comers are likely to be from the area of advanced
materials used in the automotive and machine building sectors. These companies
will largely be SMEs. According to the Indo-German Chamber of Commerce. There
are over 950 German companies in India, of which 100 are located in Pune. This
may become 200 in about two years. Mercedes Benz and Volkswagen are already
present in Pune. Source: Mr. Zubin Kabraji, regional director, Indo-German
Chamber of Commerce, Pune.

Page 31 of 400


COMPUTER NETWORK SYSTEM SCHEMATIC

Local Area Network or LAN
• SERVER HIGH
PERFORMANCE
COMPUTER (e.g. Xeon)
• With MS Windows 2003
Server Operating System
• MS SQL 2005 SERVER
RDBMS
• ANTI-VIRUS SOFTWARE
UPS SERVER EDITION

Switch

User PC -
Accounts

User PC - User PC -
Purchase Stores

User PC - User PC - Printers as per
Production Sales requirement

ERP Network

Server PC must have a CD / DVD Drive for Backup.

Server network with Switch – Gigabit LAN. CAT 5 LAN cables.
Switch or Wi-Fi network, supported by UPS battery backup.

Figure 3: Server computer and user’s PC

Page 32 of 400


IT infrastructure recommendations checklist

Checklist to plan hardware, software, and personnel for ERP deployment:

1. At head office, provide one High performance Processor Server (e.g. Intel Xeon CPU)
e.g.
with Minimum 2 GB RAM, minimum 80 GB HDD. (With CD or DVD writer for taking
periodical backup). With at least two nodes (256 MB or 512 MB RAM) with Operating
system WIN XP or Vista for your software Coordinator and our QC team to test EXE,
prepare master data, give training, etc. Other client sides PC (nodes) with MS
Windows XP (or later versions) with at least 256 MB RAM. ERP developm
development team
and implementation team will also use these computers during the initial phase.
These nodes (client PC) should be networked with the ERP Server computer. MS
Windows 98 is not recommended.
2. Recommended Memory: Minimum 512 MB RAM on client computer and 512 MB or 2
GB on Server. MS Excel on client PC For Microsoft Windows Vista Operating
PC.
System it is recommended to have 4 GB RAM.
3. For outputs (reporting): Inkjet or Laser Jet printer (A 4 size paper), or a Dot matrix
printer with fanfold setting 8.5 X 12 selection. It is recommended that users should
8.5
phase out the dot matrix printer (if not done already).
4. The monitor resolution setting should be 800 X 600.
5. Arrange to deploy licensed software: MS Windows 2003 Sever Operating System and
MS SQL 2005 Server RDBMS software. MS Excel. Check with ERP vendor for exact
erver
software requirements.
6. One PC with Internet connection for remote support from ERP vendor’s helpdesk. It
is better to send email to helpdesk email ID instead of personal email id.
7. UPS (battery backup) for the Server and switch (hub) is required for at least
two/three hours. Provide Generator set for power backup if necessary, for longer
electric power shutdown.
8. You may add more PCs as the data entry work increases and as users s start being
trained over a period. The PC (nodes) may be networked using wired LAN or
wireless LAN technology. Wi-max solutions can also be considered if available in
max
your location. The V Pro CPU (Intel) based, PC may be considered for the client side
computers.
9. Anti-virus software with facility to update the signatures is required (a) Sever
virus
version for the server computer and (b) client version for each user PC.
10. At least one LaserJet (or DeskJet) printer for hard copy printouts. You may add
more printers as per requirements. This is a good time to phase out the Dot Matrix
s
Printer.
11. Appoint ERP Coordinator exclusively, who is available during the Software testing,
implementation and deployment activity. Time commitment towards Software
project is essential.

Page 33 of 400


12. There will be a ‘Chief-of-Project’ (sponsor) to monitor and review the progress during
the software implementation. (Usually a very senior person, like owner, with
necessary authority to take crucial decisions).
13. Appoint network administrator to support the IT infrastructure, such as Server,
networking, etc. He will also take care of anti-virus solutions, Firewall, Login and
secret password, etc. (May be same person as ERP project Coordinator).
14. For remote access, provide Server with static IP address for out-locations to login. A
good broadband connectivity at the server locations will be required. Internet /
Email connectivity. The net connection is necessary for remote login for support.
15. Provide CD / DVD (or tape backup) for taking backup of database and important
software programs.
16. UPS to supply electric power to the ERP Server. Battery backup for at least two /
three hours. The same should also give uninterrupted power to the network-switch
(or router). You may plan for separate UPS for each user PC. Generator power as
per requirement.
17. Date and Time setting.
a. Date and Time setting is done by the network support engineer (or the
computer hardware support person). The ERP server date and time setting is
important and it is used at the time of capturing and saving transactions,
preparing reports, etc.
b. The date format of each computer should be dd-mm-yyyy. This is set using
regional setting option, of control panel.
c. Do: 1. Set all clients PC's Timestamp to ERP Server Time Stamp. Time and
Date should be same for all PCs connected to your ERP Server. 2. Setting of
All "Time zones" of all the PCs should be GMT 5:30 New Delhi, (in India). Set
this from Windows control panel, Time and date Properties-Time Zone. 3.
Care should be taken to ensure that user is not allowed to temper with the
system data and time. Necessary password control is required.
d. Do not: Do not Change time and date of the server and any other client PC,
in the network at any time.

Page 34 of 400


ERP Implementation project management

ERP Implementation step-by-step strategy:

1. Scope as per 3. 4.
- 2. System Database
ERP proposal Legacy
Requirement - - Setup,
and approval docume
Specifications First-cut
from ERP nts /
as per SRS by DEC
project Logic
template team
organization sheets

5. Make Server ready and deploy DNS EXE

7. QC 9. First-cut
Database -
by Task
6. CRP -
8. Training
Setup on Force team
Checklist -
and Demo
ERP
and POC to the Task
Server,
printouts Force
deploy
by DEC
EXE
Team

13.
10. CRP Go Live. All
11. -
Checklist 12. Complete CRP ERP
- Essential -
and POC run by task force, authorized
customizat
printouts complete CRP users’
ion,
by Task checklists, and starts using
Force database
print POC ERP
changes

-
14. Rollout

Figure 4: Typical workflow for the implementation

Page 35 of 400


Implementation Strategy

1. IT Infrastructure Readiness: Please prepare Server computers and other items of
hardware and software as described above.
2. Software Project Preparation: Defining exact scope with help of the Chief of
project. Prepare the legacy documents (file containing existing transactions /
reports). ERP implementer consultant will help you in preparing module wise legacy
file (AS IS business process).
3. Kick-off meeting: ERP implementation team makes Project kick-off presentation in
presence of complete Steering committee (key users).
4. Preparing the SRS: System Requirements Specifications. This is well documented
in the manual (called ERP Business Blueprint). Based on the legacy data and
standard best business practice a business cycle will be shown. The SRS may now
be required to be documented to capture exceptional scenarios.
5. Gap Analysis: Clearly defines business logic. The ref. manual based on the first cut
end-to-end cycle is prepared, given to ERP Coordinators for approval. Once the
same is received the changes / customization takes place. This will ensure user gets
essential customization done. At the same time user may do BPR and accepts the
ERP business logic.
6. Appoint ERP Steering committee or the task force team. This is a team
comprising of one or two persons from each business function (department).
Headed by the chief of ERP project and ERP coordinator. These are the ‘stake
holders’ in the ERP project.
7. Awareness / Training: To all ERP Users and the ERP Coordinator about ERP
concept and menus and sub-menus.
8. Business requirements: Discuss BPR (Business Process Reengineering) and decide
the need to customize to meet your specific business requirements. Roles and
Responsibility Matrix (what menu to whom).
9. TO BE business process: Customization is carried out by our team (changing our
programs) and preparing the ‘Proof of concept file’. This is configuring ERP software
for you. The entire package is run on the server using test database (QC data) with
sample master and transaction.
10. CRP run: Conference Room Pilot. Task Force (and key users) is given training and
asked to enter transactions and does the CRP run. ERP team will do necessary
confidence building and handholding. A sample printouts of each transaction and
report will be printed and kept in file called ‘POC file’ (proof of concept), for sign off.
11. Data Migration: One time data transfer from legacy (old) system to new (ERP)
system may be considered. This will depend on the data format of the legacy data,
accuracy, and completeness of the old records. Some time it is prudent to enter the
data again in the new ERP software. Although, one time migration saves time (and
money) it should be done with due diligence. Many times, it is observed that the
data that was migrated in the new system was actually ‘garbage’ data (not checked).
Later to check and correct the masters took even more time (and money). E.g. in
customer master, we need the contact person’s name, city, etc. as separate fields.
In legacy data if the same is not stored properly, how new ERP system will give
benefit.
12. Master data preparation for test run: E.g. Item master, customer master, vendor
master, BOM master, etc.
13. Ownership transfer from ERP Coordinator to end-users.
14. Go-Live preparation: Cutoff date – Inventory closing balance/account-closing
balance in live database.
15. Roll out – Go-Live: Start using ERP for all business activities.

Page 36 of 400


16. Post implementation support: Support is provided by ERP team if and when
require for about a month so that all users feel confident and system stabilizes

ERP project management

This is very important for the success of ERP implementation. ERP project management life
cycle consists of the following major phases:

1. Initiation.

a. This includes deciding start date and finish date.
b. Define working time and non-working time.
c. Define the workweek, which days of the week are the usual workdays for this
ERP project. Select a date that should be a nonworking day, such as a
holiday (E.g., 15 August) or a day off for your organization.
d. Define time units, such as 8 hours a day or 40 hours per week, or 25 days a
month, etc. in the calendar.

2. Planning.

a. This includes defining major milestones, tasks
b. Make a list of resources
c. Mark dates to fix the training days, referred as ‘ERP training calendar’.
d. ERP review meetings dates. Inform all stakeholders (resources).
e. Define precedence of tasks. E.g., Task 2 can start after task 3 is finished.
f. Make a base plan.

3. ERP implementation.

a. Track and mange.

4. Go-live.

a. Discard legacy and use ERP for business management.

ERP task force team manages the implementation using Project management software, such
as Microsoft Project.

Task:
An activity that has a beginning and an end. ERP project implementation is made up of
several tasks. One must enter duration for each task.

Milestone:
A reference point marking a major event in the ERP implementation. Milestone is used to
monitor the ERP projects progress. In MS project, any task with zero duration is
automatically displayed as a milestone.

Note: Do not start with the unreasonable end date and work back reducing the project
estimate.

It is better to increase the amount of resources, reduce scope, or change the plan. A lot of
time and pressure causes inefficiency with meetings to discuss why things are going wrong.

Page 37 of 400


Resource:
The taskforce members are resources. ERP Implementation consultant and ERP developer
are also resources i.e. ERP coordinators, ERP taskforce member, ERP user, are all ‘resource’.

Ensure time is provided for planning, teambuilding, and ERP training. One may use a dated
diary, calendar, or MS Outlook to block the dates and commit for a given task as per plan.

The roles and responsibility matrix should be prepared. It is very important to assign login
ID and passwords for using ERP software. If it is not done carefully, ERP server access is
compromised.

Predecessor:
A task that must finish before another task can start.

ERP Tip: Please provide proper notebook for noting down the notes during training,
clearly marked as ERP notes. Loose-leaf rough pad is not recommended.

Page 38 of 400


Figure 5: Every member in ERP team has times when they need support.

Helping ERP project team succeed.

I am sure the organization that is planning to use ERP, wants the ERP project manager to
succeed. Creating an environment that supports success is a major step towards helping
the ERP project teams succeed. Everybody needs to work together and support each other;
this includes not only the ERP implementation team but also vendors (suppliers) and
customers.

Always encourage practice in planning. ERP roadmap is used to manage the
implementation and therefore must be kept up-to-date. If the plans that are created at the
beginning of the project are put in a file and forgotten, why bother creating them in the first
place.

ERP Tip:

Page 39 of 400


There should be focus on implementation control, not just reporting. Sometimes it is also
necessary to report if things are going as per plan. This is called positive reporting.
Keeping quiet and not reporting is not good. Most ERP project fails because of lack of
communication or incomplete communication. Sometime people are afraid to tell that they
have not done the task or failed to keep the deadline. In short, email should be sent about
every activity, milestone, and status to all stakeholders. This will ensure that people
(resources) know where their business unit or department fits into the plan.

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Roadmap

“If you fail to plan, may be you plan to fail”.

Stakeholders:
Individuals, ERP implementers, and ERP user organization are all stakeholders. They are
actively involved in the ERP project. Their interest may be affected by the ERP project.

Who will make the roadmap?
The chief of ERP project, ERP coordinator along with ERP implementation team will prepare
the roadmap.

Prerequisites:

1. List down tasks
2. Mark milestones
3. Fix the project start date
4. Write duration for each task
5. Identify resource for each task
6. Define predecessor

The following is a sample plan showing various milestones and tasks. Please note the
sequence of the task. The numbers of days are only for the example. This will depend on
various factors such as resources allocated to task, data readiness, and availability of
resource during the project implementation, IT infrastructure and so on.

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Duration
ID Task / Milestones days Predecessors
0 Total project duration 95 days
1 Planning 9 days
2 Scope list printout and softcopy 1 day
3 Install IT infrastructure 2 days 2
4 ERP Preparation 2 days 2
Prepare Legacy file and send to
2 days 4
5 ERP Vendor
6 Kick-off meeting 1 day 4
System Requirement
3 days 6
7 Specifications SRS
8 Legacy received by ERP team 1 day 5
9 Begin Implementation 89 days 6
Prepare blank database to start
2 days 4
10 ERP
11 First cut by ERP team 10 days 8
12 Business Blueprint - first draft 3 days 8
13 POC spiral based on first cut 2 days 8
Documents given to user- two
2 days 12,13
14 spirals
15 Training 2 days 13
16 Training completed 15
17 CRP by ERP team 28 days 11
18 Start customization 11
19 Internal CRP - S1 10 days 11
20 Internal CRP - S2 10 days 19
21 POC file S3 8 days 20
22 ERP EXE Ready for first cut 51 days 21
23 First cut by Task force / users 7 days 21
24 Essential customization 9 days 11
25 CRP by task force / users 44 days 23
Accounts Module – General
5 days 23
26 Ledger Accounts
27 VAT / Sales Tax Module 3 days 23
28 Excise Module 3 days 23
Material Management (MM)
8 days 23
29 Module
30 Purchase 4 days 29
31 Import Purchase 3 days 29
32 CRM Module 4 days 29
33 Subcontractor OUT Module 3 days 31
34 BOM Module 5 days 31
35 PPC – process production 3 days 31
36 Production Module 5 days 31
37 Sales 3 days 31
38 Export Sales 3 days 31
39 Sales & Distribution - trading 3 days 38
40 Plant Maintenance Module 3 days 38
41 M. R. P. 3 days 38
42 Costing Module 3 days 38
43 CRP by all locations 8 days 38

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Duration
ID Task / Milestones days Predecessors
44 CRP completed 43
45 All testing over 44
New exe with customization
45
46 deployed
47 ERP EXE freeze 1 day 46
48 User Acceptance ceremony 1 day 46
49 Go Live 10 day 48
50 Post Go Live support 10 day
51 Closure 1 day 50
52 Post go-live review 1 day

** Note: Date and resource names are assumed to illustrate the example. Actual
milestone / task may vary depending on number of modules etc.

Road map example is shown above.

The Gantt chart will be prepared automatically by the project management software as
shown below:

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Sample Gantt chart

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ERP Book by Jyotindra Zaveri - Excerpts

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