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Life Cycle of ERP

Life Cycle of ERP
Author

Muhammed AliAug. 18, 2019

Enterprise Resource Planning Life Cycle

The life cycle of ERP characterizes that how long a system remains usable. Because of changes in business and innovative paradigm, it becomes more and more difficult and expensive to maintain and extend the system. So the life cycle of ERP systems is getting shorter. The cycle of re-implementation and beginning of a new cycle starts in this circumstance. A successful ERP implementation raises the efficiency of the enterprise and results in expanded customer loyalty. In addition, an organization is likely to benefit more if it is able to fully integrate ERP into day to day business operations of the organization. An effective ERP system will have option to  accommodate quickly changing business conditions.

life cycle of erp

  • ERP Roll Out
  • Optimization
  • Maintenance
  • Extending Values
  • Decaying Performance
  • Re-implementation

ERP Roll Out

The selected system goes through a long assessment before selection.The starting roll out of an ERP system itself consists of different stages commencing with Request for Proposal(RFP) and vendor choice and finishing with go live and hand holding phase. This cycle includes the degree of the vanilla ERP product matches current business needs and the extent of customization needed, commitment of the vendor for future development and their financial health and clarification of license fees and related expenses.

Optimization

After the system is live and turned out, there will be a difficult situation. There will be a lack of comprehension and confusion among staff. Because of this plenty of questions will arise. Early stage troubles and some software bugs will constantly appear. With retraining, some tweaking of the system and help from a responsive help desk, this stage should be over within six months to one year and the system should begin balancing out.

Maintenance

Ongoing maintenance will be fundamental and vital to the business. A few changes will be continuing with,for example, new reports, different workflows, some localization on charges, etc. Maintenance will be covered by service level agreement, entailing payment of license fee to the vendor. For a complicated framework, there may be a third party vendor, helping maintenance at site. The license fee, due to provision of escalation, get escalated at regular intervals and after certain years, adversely effects Total Cost of Ownership (TCO).

Extending Values

Running in parallel with maintenance involves adjusting to business and technological changes as necessary. New release and versions appear for underlying technological platforms like operating system and data base. ERP vendors discharge patches and versions of their items at regular intervals which needed to be incorporated in the current system. This usually involves minor or moderate efforts. But, problem arises where many software objects customized during implementation. Retrofitting these articles for making them compatible with later versions, may turn out to be a major migration exercise involving exorbitant expense and effort.

Decaying Performance

At some point, it is going to be apparent that the expense and time expected to maintain the system are too much. So the organization will understand that the system is no longer meeting business needs. Perhaps a form of the software used by the company that is no longer supported. The hardware may be on the decline and, due to the age of the framework as a whole, it is clear that the system no longer fulfills business needs and has to be replaced.

Re-implementation

This is similar to the underlying rollout. The advantage here is that the business can learn from the first implementation. The experience of using an ERP system ensures that the initial vanilla assessments will be more suited to business needs. This results in the system being more suitable to the business requiring less customization and, in turn, less maintenance. This spares time and cost. Execution of the new systems should also be faster from a training and technical point of view.

erp life cycle

It become well instructed when evaluating the viability of a vendor offering to take into account the maintenance factor. Being able to easily maintain the system prolongs the life of the ERP providing more Return On Investment(ROI). To maintain a good life cycle of an ERP system, need good practice to ensure the team that assesses the ERP comprises of end users, compliance, and maintenance teams. Try and attempt all modules at the start of the process. It is simpler to implement modules at the start than after rollout has occurred. If you can get your ERP system choice right, you will have a system that improves workflow and increases ROI essentially.

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