Project–Based Management for ERP System Implementation in CITA Ltd.
Table of Contents
Executive Summary. 3
1. Introduction. 4
2. Background and Environment of project 6
3. Critical Analysis of PMP. 7
3.1 Nature of Venture. 7
3.2 Nature and Purpose of chosen PMP. 9
3.3 Audience of PMP. 11
3.4 Structure and Contents of PMP. 12
4. CONCLUSIONS. 19
5. RECOMMENDATIONS. 21
Bibliography. 22
APPENDIX 1. 25
Appendix 2. 25
Executive Summary
The project-based management plan for ERP implementation in CITA Ltd. is very vital to channelize the proper working and Management Production Orders (MPO) which are currently suffering from great amount of lacunas and errors. The manual updating of MPO in the organisation is causing many errors in the work orders and production lead times. Thus by developing and implementing an efficient and effective ERP System would definitely be very helpful. The critical analysis done for the ERP implementation project defines the whole structure which covers every step from scope management, project charter, risk management, schedule management etc. to monitor and control the planned project.
The project objectives, project approach and the scope of the project should go hand-in-hand with the implementation so that if any gap is found remedial action can be taken by the project manager on time to bring the project back on track.
However in order to guarantee the successful implementation of the Project Management Plan designed for ERP implementation there are five steps which need to be followed along with the structure designed for a perfect Project Management Plan. Weeding unwanted information, finding a customised ERP solution for the company are few recommendations which will improve the success ration of ERP implementation project.
1. Introduction
Hong Kong based uniform manufacturing company CITA Ltd. has its manufacturing unit in China. The Manufacturing Production Orders (MPO’s) are issues manually using excel format sheets and due to frequent human errors lot of wrong information has been detected in the MPO’s of the company (Fung-lin, 2012).
Moreover any amendments in the MPO’s are communicated verbally, so they do not have any written records. Based upon the written documents the information is fed into the MPO and sometimes there are several crossed-out remarks and mark-ups.
Thus to handle this current haphazard situation where the MPO are full of wrong information we need ERP implementation Project Management Plan. The plan will contain:
- Scope of the Project
- Project Objectives
- Project Approach
The standards and procedures which need to be followed during the project are defined in the following topics:
- Scope Management
- Work Management
- Key Decisions Management
- Financial Management
- Issue Management
- Requirement Management
- Problem Management
- Communication Management
- Risk management
- Organisation and Staff management
- Quality management
- Infrastructure management
- Organisational Change Management
- Configuration Management
- Procurement management (Fischer, 2009)
2. Background and Environment of project
CITA Ltd. is facing a major problem with its Manufacturing Production Orders due to human errors in feeding the right data. This is the biggest problem which is causing several other problems in the company like improper work order execution, production disruptions, client dissatisfaction, loss of money etc. So in order to manage all these problems CITA Ltd. has decided to implement ERP System.
ERP System is basically a set of application software which brings together and balances the financial, manufacturing, distribution and other several business functions existing in any organisation. ERP follows horizontal extension in the organisation’s business functions while it spreads vertically into the supply chain of the company.
Benefits of ERP Implementation in CITA Ltd.
- It acts as key enabler of “ Best Practices”
- Works as framework for organisational Transformation
- Acts as facilitator for governance of Information System of organisation
- Works as effective catalyst to enhance the process and operational effectiveness of business.
- Good tool for extended form of integration
- Assists in human capital advancement
The main objective of ERP implementation in CITA Ltd. is to extend the benefits of ERP system which just not repair the current defective state of the company MPO, but should also address the future needs of the organisation across varied dimensions as shown below in the figure 1:
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3. Critical Analysis of PMP
3.1 Nature of Venture
A project is being defined as a one-time effort which produces desired or specific results (Trelles-Duckett, n.d.). Here also in case of Implementation of ERP in CITA Ltd. by getting the enterprise resources planned the company is going to accomplish the result of making the Manufacturing Production Ordering process being made error free and channelized through proper project planning which is just one-time effort. Once the ERP project is implemented in the organization all the departments of the uniform manufacturing will be channelized.
Phases in a Project:
- Feasibility
- Definition
- Project planning
- Project Implementation
- Project evaluation
- Maintenance and Support
Although there is no specific theory of project but we will take crystallization done by Turner (Turner, 1993) as the point of initiation of the reconstruction of theory of project. Turner (Turner, 1993)states that the raison d’être of any project management is just because of scope management. The main purposes of scope management as defined by him are:
- So that adequate and sufficient amount of work can be done
- The work which is being done through project is able to deliver the required business purpose.
- Unnecessary or redundant work is not performed at all in project.
- Mainly the scope of any project is defined using Work Breakdown Structure (WBS).
The activities and tasks which are being defined in a project are the core units of analysis in any project management for e.g. time management, cost management and scope management; moreover the control and management of these units is centralized. This is certainly supported by the project description given by Morris (Morris, 1994) who gave a classical but an approach which is still fresh the project management approach given by Morris states:
“…..first what needs to be done; second who is going to do what; third, when actions are to be performed; fourth, how much is required to be spent in total, how much has been spent so far and how much has still to be spent…..Central to this sequence is Work Breakdown Structure (WBS)….” (Morris, 2000)
Thus in general the crystallization of project management can be compared with the theories of operation management and it can be said that it completely relies on the Transformation Theory of production which dominates the whole production sector. It states production process can be called input-output process where the set of resources is called inputs on which the transformation process works and then releases these resources in much refined form which we call outputs (Starr, 1966).
The management of CITA Ltd. gets highly affected by ERP implementation project because
- It will increase the market share and the sales of the uniform produced by CITA Ltd.
- This will be helpful in creating a flexible, scalable and adaptive web based ERP system for the company.
- The management can reach maximum level of uniform productivity as the MPO will be now on time.
- It will provide the management and the employee better access to all the product related information
- Enhance the customer satisfaction as they will get their orders delivered on time, thus in turn increase the number of new customers and the old customers will also return back.
3.2 Nature and Purpose of chosen PMP
Project Management includes a carefully planned and an effort which has been organized in order to achieve the successful project in return and the plan charted to implement the project is called the Project Management Plan. In the Project Management Plan we basically give definition to the project and confirm the objectives and the goals of the particular project. Mainly following things are included in the Project Management Plan:
- Project goals and objectives being defined and confirmed
- Identification of the tasks
- Process by which goals will be achieved
- Quantification of the resources required
- Budget Allocation
- Timelines for completion
Thus we can define Project Management Plan as a coherent and consistent document which helps in guiding project execution as well as project control. The Project Management Plan is basically required for:
- Guiding the project through not just execution but also control.
- Documentation of project planning decisions related to alternative options available.
- Defining the management reviews for e.g. timing, extent and content.
- Establishing the baselines for project in order to measure progress and the control.
- Documentation of the planning assumptions
- Communication with stakeholders (Brimberry, n.d.)
Some of the key elements of Project Management Plan are (Brimberry, n.d.):
This project management Plan is rightly needed for this ERP implementation project because we need accurate database and to streamline the whole procedure for placing manufacturing orders in the production factory in China. Since all the necessary and relevant information regarding the products and the manufacturing orders will be stored in the ERP System implemented, the margin of error will be very less.
This will lead to placing right orders for right products at right time. Thus the uniforms will be delivered on right time to the customers. This will increase the profits of the company and will reduce the wastage and the satisfied customers will definitely return back. Therefore the company will save cost and control the production lead-time.
3.3 Audience of PMP
The main audience of any project management plan is all the project stakeholders, which include the project sponsors, senior leadership and the whole project team (Project Management Plan-Georgia Technical Authority, n.d.). The target audiences of the project management plan are mostly the software project managers and various other individuals who are part of ERP implementation project planning, controlling and monitoring.
Mainly the target audiences are involved in any project with the purpose of defining, analyzing or understanding the needs or requirements which are being desired form the ERP project. Mainly there are two kinds of audience:
Primary Audience: The individuals who are directly involved in the software or enterprise resource planning (SPI11:Project management objectives: Software Engineering Competence Centre, n.d.). They are the project managers, project sponsors, stakeholders and ERP managers.
Secondary Audience: These are the product managers, marketers who are responsible for specifying the product attributes of the ERP or the features required in the ERP (SPI11:Project management objectives: Software Engineering Competence Centre, n.d.)
The main target audience identified in this ERP implementation project is the project manager, owner of the company CITA Ltd. and the customers of the company. The main aim of the audience of PMP is to successfully manage the whole ERP project to achieve long term benefits from this one-time effort. Moreover the cost and time benefits are also attached with the target audience.
3.4 Structure and Contents of PMP
The Structure of Project management plan is described below in a format of typical project plan.
1. Introduction
1.1 Purpose of PMP
Including the senior leadership, project manager and project team they all along with all the project stakeholders of Implementation of ERP in CITA Ltd. is the reason or purpose of this project and to overcome the MPO defects in system.
1.2 Project Characterization
This is included to find the strategic goals with which this project is aligned and it also includes the programs to find out which all programs the project impacts. Any IT System which will get influenced by this project is also included (Chryssolouris and Mourtzis, 2006).
Project Characterization is done by assigning weights and giving values to the contingency factors which are main characteristics of the developmental situation (Chryssolouris and Mourtzis, 2006).
2. Project Charter Executive Summary
The approved project charter which is the brief information regarding the whole project is written just to give a brief overview of the project. This project charter is the formal authorization document for the project, which acts as a link between the ongoing work of the project and the project.
The project sponsor is the person who is responsible for authorizing the project charter. The main elements of the project charter are:
- Project Statement ( Business Needs)
- Project Scope Statement and Project Definition
- Strategic Plan
organizational factors and Constraints
3. Project Scope
A mature project scope statement gives rise to project plan and is mainly found on detailed solution architecture. Iterative scope management processes give rise to which are mainly or usually done by project team by using WBS give rise to scope statement.
Source: (Brimberry, n.d.)
The origin of solutions architecture could be found form the appendix 1 attached along with this report.
4. Integrated Work Management Plan (Brimberry, n.d.)
The main purpose of Integrated Work management Plan or Control Account Plan includes in total all the defined, scheduled, risk adjusted and work which has been planned. The management of total project scope is being defined with the help of total integrated work management plan. The management plans included in integrated work management plan are:
- Scope Management plan
- Schedule ( Time) Management Plan
- Quality Management plan
- Communication Management plan
- Cost (Budget) Management plan
- Risk Management plan
- Human Resource ,management plan
- Procurement or Contract management plan
4.1 Scope Management Plan
Identification and finding solution for the project deliverables and the method for accomplishing the related work are found in scope management plan. It includes the technical product specifications along with other related tasks and all the project management activities too. The main purpose of scope management plan is to:
- Scope Planning
- Scope Definition
- Create the WBS
- Scope Verification
- Scope Change Control
4.2 Time (Schedule) Management Plan
It helps in resolving all the schedule related issues and all the project objectives which are required by schedule. The main management processes which are covered:
- Activity definition
- Activity sequencing
- Activity Resource estimation
- Activity duration Estimation
- Schedule Development and
- Schedule Control
4.3Cost management plan (Brimberry, n.d.)
It includes all the cost which is being borne by the project for all the resources used in the project activities. It includes major artifacts like cost estimates, updated WBS, cost estimates or cost baseline and Cost management Plan. The management processes which are included in it are:
- Cost Budgeting
- Cost estimates
- Cost Control
4.4Quality Management plan (Brimberry, n.d.)
The Quality management plan takes care of the assurance that all the product characteristics which have been defined should meet the expectation level of the stakeholders and it also helps in fin ding that how the project management processes are capable of realizing the expectations of stakeholders. The major management processes which form a part of this plan are:
- Quality Assurance
- Quality Planning
- Quality control
4.5Project Human Resource Management Plan (Brimberry, n.d.)
It helps in finding the right number or appropriate amount of external stakeholders and internal staffing needed and how they can be best used to accomplish the project objectives successfully. The following management processes are involved in it:
- Human Resource Planning
- Team Development
- Acquiring project team
- Managing Project team
4.6 Communication Management Plan (Brimberry, n.d.)
This plan is designed so that the project ensures on-time and correct collection, storage, generation, dissemination and outlook of the project related information. The special attention is being given to earned value management (EVM) and on the basis of need analysis of stakeholders some major artifacts are:
- Control Data and Reporting Requirements
- Communications Management Plan
- Performance Reporting Specifications
The major purpose which the communication plan fulfills through the several management processes are:
- Communication Planning
- Performance Reporting
- Information Distribution
- Managing Stakeholders
4.7Risk Management plan (Brimberry, n.d.)
This plan is made to systematically identify the risks and then through proper analysis respond to these risks all through the project. It determines the risk in the project and covers the planning decisions, methodology and assumptions of risks in project management plan.
The major artifacts which are part of risk management plan are: Risk Inventory with Thresholds, Response Plan and Prioritized Probability-impact Ranking. The major management processes which are involved are:
- Risk Management planning
- Qualitative Risk Analysis
- Quantitative Risk analysis
- Risk Identification
- Risk Response Planning
- Risk Monitoring and Control
4.8Contract Management Plan (Brimberry, n.d.)
It helps in finding that how the goods and services are being sourced from outside the organization which is performing.
The management Processes which are included in the Procurement Management Plan:
- Plan purchases and acquisition
- Request Seller Program
- Selection of Seller
- Plan Contracting
- Contract Administration
- Contract Closure.
5. Project Resource Estimates
5.1 Schedule estimates: It is the outcome of Time management Processes and gives a summary of estimated assumptions and methodologies.
5.2 Cost estimates: It provides summary of risk-adjusted cost estimate and the estimated methodologies and assumptions.
6. Supporting Documentation (Brimberry, n.d.)
This section quotes, referencing documentation and summarizes the documents which give more understanding, authority, meaning and context to project plan. Some of the supporting documents are listed in Appendix 2.
4. CONCLUSIONS
The Project management plan would be the best tool to manage the production flaws and the difficulties in Manufacturing production Orders in CITA LTD. With the help of proper ERP implementation in the company it would be able to manage all the data and store all the production related information in a centralized manner. Therefore the ERP project would be of great advantage for the company.
The Theory of management where the project management processes are divided into initiating, planning, execution, controlling and closing processes according to PMBOK guide also match with the PMP which we have critically analyzed (The Future of Project Management: The Porjecvt Management Institute, 1999). The closed loop formed by these processes can be seen from the diagram shown below:
Changes Plans
Performance Data
Correction
Figure 1: Closed loop of Managerial Processes in Project management as per PMBOK Guide
The aspects of project which are important and significant for management of this project are (Turner, 1999):
- Scope Management
- Risk Management
- Cost management
- Time Management
- Testing phase
The reason being all these parts of project management are very vital for monitoring and to make the project successful although all the steps are necessary and important to manage, but these are few steps which are vital for the success of any ERP related project.
5. RECOMMENDATIONS
Successful ERP implementation projects should follow 5 steps to be categorized as successful and profitable Project plan and the steps are listed below (O’Donell, n.d.):
- Strategic planning: Assign project team, Examination of current business processes along with information flow, Develop project plan after setting project objectives.
- Procedure review: Reviewing the software capabilities, identification of the manual processes in the project, developing standard operating procedures.
- Data Collection and Clean-up: Conversion of data, collection of new data, review of data, clean-up data.
- Training and Testing: pre-testing of database, verify the testing, Training the trainer, performing the final testing
- Go Live and Evaluation: Developing a final Go-Live checklist, Evaluating the solution
The recommendations from this PMP analysis are (O’Donell, n.d.):
- Finding customized ERP software solutions for the company will lead to smoother implementation of ERP in the company.
- Assign a Project team after examining the business processes and information flow.
- Try to do intensive review of the software capabilities of the project team.
- Identification of the gaps is important so that the project team can be trained according to all the aspects of ERP software so that the team can be educated on all the capabilities.
- Development of Standard operating procedures is very critical for the success of any ERP project.
- Weeding out of unnecessary or redundant data should be done in order to improve the data accuracy. It will be helpful in re-establishing contact with inactive customers also.
- Running the real life scenarios could be done to test the accuracy of data in the new ERP program.
- Verification of testing where the actual test should mirror the standard operating procedures. Testing the software all across the departments should also be done.
Bibliography
Brimberry, W. The Project Plan: Plan your work and then work your plan, [Online], Available: www.usgs.gov/./5PlanYourWorkThenWorkYourPlan%20_Brimber. [23 May 2012].
Chryssolouris, g. and Mourtzis, D. (2006) Manufacturing, Modelling, Management And Control 2004, Elsevier.
Fischer, M. (2009) Project Management PLan: STudent Information SYstems Replacement Project, Colorado: Oracle.
Fung-lin, M. (2012) Project-Based Management, Queensland: Univerity of SOuthern Queensland.
Morris, P. (1994) The Management of Projects, London: Thomas Telford.
Morris, P.W.G. (2000) ‘Researching the Unanswered Questions of Project Management. Project Management Research at the Turn of the Millennium’, Proceedings of PMI Research Conference 2000, Paris, France, 87-101.
O’Donell, S.W. 5 Steps To Successful ERP Implementation: Datacor Inc., [Online], Available: http://www.datacorinc.com/articles/news/erp.pdf [23 May 2012].
Project Management Plan-Georgia Technical Authority, [Online] [23 May 2012].
Schwalbe, K. (2010) Information Technology Project Management, Boston ,MA: Cengage Learning.
SPI11:Project management objectives: Software Engineering Competence Centre, [Online], Available: www.secc.org.eg/Other%20SECC%20PDFs/outline_SPIG_2nd.pdf [23 May 2012].
Starr, M. (1966) Evolving concepts in production management, Readings in production and operations management edition, New York: John Wiley.
The Future of Project Management: The Porjecvt Management Institute (1999), Ne: Newtown Square.
Trelles-Duckett, A. All About Project Management, [Online], Available: http://managementhelp.org/projectmanagement/index.htm [23 May 2012].
Turner, J.R. (1993) The handbook of project-based management, London: McGrawhill.
Turner, J.R. (1999) ‘Project management: A profession based on knowledge or faith?’, International Journal of Project Management, vol. 17, no. 6, pp. 329-330.
APPENDIX 1
Source: (Schwalbe, 2010)
According to the PMP structure of Project Plan the Project Charter has been attached below:
PROJECT CHARTER FOR CITA LTD.
| CITA LTD. ERP Project | Project Charter |
| Project Name: project –Based ERP Implementation in CITA LTD. | |
| Date: 1st June 2012 | |
| Point of Contact: PROJECT MANAGER | |
Approvals
The signatures of related or concerned persons are taken and by signing this document they will agree to the start project as outlined.
| Position/Title | Name | Date | Phone Number |
| Project Manager | |||
| Project Sponsor | |||
Purpose of the Project
The purpose of the Project-Based ERP System Implementation in CITA LTD.’s project charter is to communicate the authorization of the project and to project participants and external entities the management approach adopted for this project.
Project Objectives
| Organization Strategic Goals | Project Objectives |
| Reduce wastage of time | ERP implementation in smooth manner |
| Minimise the errors in MPO’s | Proper training of ERP System |
| Make the staff learn about New System | Decrease the resistance to learn new system and to make them efficient ERP handlers. |
| Increase productivity | Streamlining the manufacturing orders operations |
| Eliminate excessive data entry manually | EDI to expedite purchasing procedures |
Project Scope Statement
The scope of the project is to find and associate with an ERP Service provider to design and implement a perfect ERP system for the company CITA LTD.
Project Constraints
- The budget set is very small because CITA is small enterprise.
- Reluctance of change amongst the staff might lead to partial utilisation of ERP system implemented.
- Inadequate IT knowledge of the staff will cause frustration and many difficulties might arise to carry the project successfully.
Project Assumptions
- Cost constraint might now allow the best ERP service Provider to be selected.
- The project will occur in two phases as in first phase the server will be acquired.
- The Programming or coding will be done for the project.
- Programming will be followed by testing and training of the staff.
Roles and Responsibilities
Project manager: Create and prepare the business case and lead the project.
Project Sponsor: Evaluation and review the business case. He will approve and then release the project charter.
Project Team: Responsible for coping with changes and give constructive and productive opinions about project.
Service Provider: Work closely with team and give best services in terms of design, training and guidance for ERP project.
Preliminary Schedule and Cost Estimates
Preliminary Schedule:
| S.No. | TASKS | TIMESCALE |
| 1. | Selection of Service Provider | 6 weeks |
| 2. | Design of System | 3 weeks |
| 3. | Trail and Notification of System | 3 weeks |
| 4. | Training for using system | 2 weeks |
| 5. | Implementation | End of project |
Cost Estimates:
HK$30,000 has been approved by the project sponsor from starting till the end of the project.
Appendix 2
Supporting Documentations:
- Mission or Strategic Plan template is being attached (STRATEGIC PLAN TEMPLATE, n.d.)
- Legal Mandates and Legislation (LEGAL MANDATES, n.d.)
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