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Capstone Project Report: Optimizing Pre-Project Preparations for ERP Implementations

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Capstone Project Report: Optimizing Pre-Project Preparations for ERP Implementations

Background

Integrated business management systems, known as Enterprise Resource Planning (ERP)

systems, are essential in contemporary business management, gaining efficiency through

consolidation of the various business sectors, including finance, human resource, supply chain,

and customer relations management. The centralizing functions of ERP systems are as follows:

Improved decision-making, productivity, and overall departmental integration occur when

bundled in one package. This integration plays a crucial role in the effective management of

organizations by eliminating the need for several systems, thus saving the time that would have

been spent on getting the same results from other systems.

Despite the benefits attributed to ERP implementations, it has been established to be one

of the most complex undertakings. The opaqueness of these projects lies in the fact that the more

complex projects require creating a new system out of different systems. This integration usually

brings relegation to the current practices, which affects the normal functioning of a business

organization. Furthermore, the assessment of ERP projects shows that the implementation of

ERP is accompanied by massive calls for time, capital investment, and effort. Thus, due to the

high risk and novelty, such initiatives tend to face many scheduling and cost issues and outright

failures at times.

Given the dynamic business environment, this is because the domestication of ERP

systems is more than just a one-off or straightforward process. Again, the static and dynamic

factors that characterize ERP projects, particularly technological advances, regulatory

adjustments, and market dynamics, can affect the project's extent or how it is implemented. It is,

therefore, clear that getting it right with ERP systems comes with numerous technical and
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organizational pitfalls that organizations face while seeking to implement the systems. These are

some of the challenges that show how essential it is to be strategic and to be most accurate while

planning and during the first phases of the project.

The study elucidates the often neglected pre-project phase of ERP implementation, which

is the subject of this project. The pre-implementation process prepares the rest of the

implementation process in various ways. This involves activities such as identifying the needs of

various users, involving the users, developing systems and applications, and initial testing. Some

of the key issues addressed in this phase include design, risk management, coordination, and

organization, which can help diminish the number of mishaps during the subsequent phases of

the project.

The focus of this study is to analyze and provide guidelines and planning activities that

can take place during the pre-project phase to facilitate strategic intervention. General objective:

The following is the general objective of enhancing the overall efficiency of ERP projects. This

project aims to identify best practices and develop a rigid framework to achieve the above

general objective. This research aims to give the organizations best practices, necessary

recommendations, and guidelines to help them be prepared when they are likely to implement an

ERP system in the future, making it easier for them to achieve their desired change.

Problem Statement

ERP implementations are generally ambitious from an organizational perspective because

they require integrating several systems and, most importantly, aligning departmental objectives.

This complexity arises from the fact that to support main business functions that include finance,
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human resources, supply chain management, and customer relationship management, there must

be a single system that allows integration of these aspects. These functions may each have their

existing systems and procedures for accomplishing tasks, and thus, any integration process

involves not only technical changes but also disruptions to one's organizational structure.

Because the ERP initiatives are complex and involve multiple interacting components,

the pressures on schedule and cost can shift greatly, disrupting the process and possibly leading

to failure. These disruptions can come from various factors: the hardware and Software of the

ERP system may fail, employees within the business may resist the changes that come with the

system, and the capabilities of the ERP system may not perfectly match the needs of the

business. However, since ERP projects involve large-scale investments, even minor cost

overruns or delays can bring additional negative consequences that affect other company

activities, making ERP projects significantly more complicated.

Another factor that needs to be elaborated on yet is often disregarded is the pre-project

phase in implementing ERP. This part is critical and requires that every aspect of the ERP system

be fine-tuned to ensure it will work optimally when implemented. The pre-project phase is

pivotal since it requires the assessment of system requirements, identification of stakeholders

involved in the project, specific design of the system, and initial testing. Nevertheless, this phase

remains underemphasized and underfunded, creating significant risks that can plague the entire

project preparatory phase.

The pre-project phase is regarded as the one in which the main decisions concerning

further work are made and form the basis for the next steps related to implementation. This is

when potential risks have to be assessed, addressed, and controlled; goals and objectives of

implementing the ERP system have to be stated, and there has to be a match between the ERP
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solution to be implemented and the business processes it will support. Do not take these aspects

lightly. Otherwise, mid-project surprises may occur; for example, the business requirements may

have needed to be better reflected, or some integration points may have needed to be noticed.

Such shocks can be detrimental to large projects and often lead to time lag, where project teams

cannot fix problems that could have been solved earlier.

Stakeholder management is another important step of the pre-project phase, which

involves individuals or organizations that can impact the project. Implementations within the

context of ERP projects involve a cross-section of members in the organization, such as senior

management, IT supporters, and common users. Applying the change management approach of

engaging key stakeholders implies that the latter should be informed and involved in the change

process right from the beginning to minimize resistance to change. However, this means proper

communication plans and training models should be implemented to address the coming change

long before it happens.

This project aims to understand and identify the best strategies for dealing with the pre-

project phase during ERP systems implementation. Considering the importance of this phase and

the lack of research dedicated to this area, the project's objective is to define key activities to

improve the quality of pre-project preparation and offer guidelines that can be helpful for

organizations. This includes specific initiatives in comprehensive requirements analysis,

stakeholder management, risk management, and preliminary tests. In sum, the overall goal is to

decrease the risk of project disruptions midway through the process and to decrease both

schedule and cost overruns in ERP projects, thereby raising the success rate of such initiatives.

While the pre-project phase of ERP initiatives normally receives little attention, it is a

critical and decisive step for the overall project. More specifically, the goals for the current
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project include identifying the best practices to be adopted during the Risk Management Phase to

increase the level of readiness for tackling risks and issues that may affect ERP implementations.

This will serve as a proactive approach since it will facilitate the escape of common

organizational confusion when implementing ERP projects, and hence, ERP projects'

implementation will experience less hustle and hitch in attaining business objectives.

Objectives

Identify Common Causes of Delays and Cost Overruns: Knowing the causes of interruption

in ERP implementations is imperative when developing techniques for preparing for a specific

project.

Analyze Effective Pre-Project Strategies: Examine researched papers to review and evaluate

the practices that show the best practices.

Develop a Framework for Pre-Project Planning: Before a project commences, develop a

robust project management framework, particularly in the areas of costs and scheduling.

Scope

It is imperative to focus on the pre-implementation phase of ERP systems to understand which

would best suit the organization: SAP, Oracle, NetSuite, Microsoft Dynamics 365, or any other,

and how it should be adapted to the organization's unique needs. Therefore, this paper aims to

evaluate the Critical Success Factor Model and other recent methodologies, like other project

management methodologies, that can be used to improve the existing ERP implementation

scenarios and create a map of the future to ease the ERP implementation.
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Methodology

This project uses both qualitative and quantitative research methods and indicator

procedures. Data will be collected from the existing literature, case studies, and a survey of

respondents comprising ERP program managers and other ERP program experts. This approach

will afford a broad perspective on the difficulties in ERP implementations and possible ways to

overcome them.

Significance

This study will be useful for further developing project management as it will present a

clear set of recommendations for the pre-implementation activities of ERP projects. This

roadmap will thus assist organizations in eliminating project delays and cost overruns, which

pose a challenge to most ERP projects, thus enhancing the success rate of ERP projects.

Literature Review

Strategic Planning and Implementation Methodologies

The paper by Archana et al. (2022) offers significant insight into the methodologies

adopted in deploying ERP solutions such as SAP, Oracle, NetSuite, and Microsoft Dynamics

365. Adopting their case, they underscore the relevance of choosing the proper methodology for

the organizational objectives and working environment. Lack of fit between the selected

methodology and the organization is one of the main reasons why projects go over time. Flores

(2019) specified some process improvements that can be made proactively before and during the

implementation of ERP to enhance integration.

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Challenges of SaaS ERP Solutions

In their article 'Adoption and Implementation of ERP Systems,' Walko et al. (2020) note

that more businesses are embracing SaaS ERP solutions because they are affordable and flexible.

However, the implementation of SaaS ERP solutions is challenging due to issues of

customization and integration with other corporate information technologies. It underlines the

value of addressing these issues to facilitate a successful pre-project phase, as explored by the

authors.

Importance of Change Management

According to Flanding and Grabman (2022), change management remains one of the

essential components for implementing ERP systems. Some of the reasons that scholars advocate

for effective change management include the following: All the stakeholders should be brought

on to the same page with regards to the modifications that are being made to the system,

expectations should be well managed, and there should be ongoing communication throughout

the change process. Overcoming resistance is particularly crucial in implementing the ERP

system, and this can only be achieved by implementing effective change management strategies.

Strategic Process Improvements

According to Flores (2019), process improvement activities are crucial in the ERP

implementation phase. Based on a case study of G3 Enterprises Ltd, Flores illustrates that

enacting strategic early-stage interventions minimizes disruptions and enhances the probability

of project success.

ERP System Implementation and Technological Factors

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Through the advancement of technology in the recent past, ERP systems have shifted

from large, on-premises systems to dynamic cloud-based solutions. This shift has benefits and

risks to organizations, as will be discussed here in detail. On the other hand, regarding the key

and distinctive limitations of cloud ERP systems, some of the important ones are as follows:

Integration Challenges: The primary concern of adopting cloud-based ERP solutions is

the ability to integrate with existing resources and structures. Companies may also have other

systems in place that need to interface with the chosen new ERP solution. This involves

evaluating the current IT integration status and adopting solutions that will disrupt the process

the least (Alharthi, Shehab, & Al-Ashaab, 2019).

Data Security and Compliance: Data security is a major concern for any ERP system,

especially for those based in the cloud. It is crucial to guarantee that ERP providers meet high-

security standards and that data is protected against unauthorized access. Furthermore,

requirements that depend on the business field, including GDPR or HIPAA, must be considered

in the planning phase.

Scalability and Customization: Using cloud-based ERP can benefit organizations as

they embark on expansion strategies, as it does not require capital investment in new hardware.

However, excessive customization leads to eliminating or reducing the advantages of scalability.

Managers must find a way to meet market segmentation requirements, which demand product

differentiation while taking advantage of standardized, easily scaleable solutions (Walko et al.,

2020).

The Successful Implementations of ERP Systems

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Studying the success stories of ERP systems helps us in identifying the dos and don'ts of

implementing ERP systems. Several examples cover strategic planning, stakeholders'

management, and ongoing optimization.

Case Study 1: SAP Implementation at a Manufacturing Company: Having

performed a case analysis of an implementation of SAP ERP, it is evident that a global

manufacturing company used a phased approach to achieve the implementation goals. In the pre-

project phase, it was also established that most departments have individual needs that can be

met through the system. The company also needed to develop organizational training schemes to

sort out the impact of reorganization on the employees. By offering focused change management

and gradual adoption, the company has avoided disrupting the process and made the transition as

seamless as possible (JS, Lakshminarasimhan & Ganiger, 2022).

Case Study 2: Real-life Oracle ERP Implementation: In general, implementing Oracle

ERP in a healthcare organization was quite challenging for several reasons, including dealing

with numerous patient management information systems while implementing the Oracle ERP

system. In the pre-project phase, specific strategies for how integration would work were further

refined, and through comprehensive testing, potential problems were also recognized. Another

key strategy dealing with change management in the organization was the constant consultation

and engagement of stakeholders and organizational training sessions. This approach ensured

success by minimizing the disruption to patient care (Baker & Haddara, 2019).

Case Study 3: NetSuite Implementation in Retail Chain: An Overview A retail chain

organization uses the NetSuite ERP to integrate its business operations at various outlets into a

centralized location. The most important part of the planning is the pre-project, which includes

assessing current practices and defining problems that need to be solved. The company hired
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ERP specialists to give recommendations and help during implementation to ensure a smooth

process. With the help of professionally assisted PPS and improving the process of optimizing

logistic procedures, the retail chain observed a high organizational efficiency and increased

inventory control (Ungureanu et al., 2022).

Importance of Stakeholder Engagement

It is informative to understand that for an ERP implementation to succeed, stakeholders

must be involved throughout the process. The project affects other employees, managers, and

external partners, making them stakeholders whose input can contribute significantly to the

project result. Stakeholder management analyses all the stakeholders' interests and facilitates the

identification of their interests to guarantee their cooperation and commitment to the project's

success (Obwegeser et al., 2019).

Communication Strategies: Therefore, the stakeholders need to be engaged as often as

possible through reports on progress, issues faced, and achievements so far. This can be carried

out through meetings, newsletters, and a common centralized forum that enhances discussion and

sharing of ideas.

Training and Support: Ensuring the organization's stakeholders are knowledgeable

prepares them well for the change expected from transitioning to the new ERP system. Training

activities ought to be developed based on the needs of various user groups, especially

incorporating practical sessions to familiarise the users with the actual system.

Feedback Mechanisms: Integrating feedback mechanisms enables the stakeholders to

provide their feedback concerning the issues under implementation throughout the project. This
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feedback can then be utilized to make the required changes and modifications, if necessary, to the

ERP system that will benefit the organization.

Some of the trends likely to be seen in ERP implementations in the future are as follows.

Trends and developments are always prevalent in ERPs based on continuous changes in business

environments and technology. undefined

Artificial Intelligence and Machine Learning: ERP systems are thus expected to

change with the introduction of AI and machine learning in ways that will see routine work done

by machines, improve analytical capabilities, and improve decision-making. These technologies

can be used to develop models and trends so businesses can improve their processes'

effectiveness (Saxena & McDonagh, 2019).

IoT Integration: The IoT will have a highly relevant presence in ERP systems due to its

ability to link different devices and sensors to the ERP platform. This integration will create raw

feedback and real-time analysis, providing efficiency in operation and decision-making (Patel,

2020).

Blockchain Technology: Blockchain, as an enhancement to ERP systems, promises

better security and transparent transaction records since it is a decentralized record. This

technology can enhance supply chain, product tracking, and regulation compliance (Qumer &

Purkayastha, 2021).

Mobile ERP: The rising use of mobile technologies in organizations' operations is a key

factor leading to the adoption of mobile ERP solutions. These enable employees to access ERP

functionalities while in action, enhancing productivity and proactivity (Sebastian, 2020).

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Sustainability and Green ERP: In the wake of organizations trying to adopt

sustainability, ERP systems are being supplemented with values that can accommodate green

ventures. These make it easier to monitor one's effects on the environment, enhance the

utilization of resources, and meet sustainability requirements (Menon, 2019).

Conclusion

The comprehensive review of existing literature and ongoing research into ERP

implementations underscores a critical consensus: the primary conditions for the effectiveness of

these projects lie in the strategic actions planned during the pre-project phase. This phase is

strategic for the logical design of the system and the change process that the organization is to

undergo to benefit from the change, which is imperative and fundamental as it affects almost all

areas of the organization's work.

Importance of the Pre-Project Phase in Strategic Management: The discussions in

the literature show that proper planning of the pre-implementation phase is critical and can go a

long way in mitigating many of the dangers associated with ERP implementation. The first phase

to be implemented is the process of testing, training, and modifying the system since it is crucial

to identify as many problematic issues as possible before implementing it. This is a crucial stage

of the product life cycle because it is the transition from the concept towards implementation,

and the level of organizational preparedness for this shift is a significant determinant of project

success (Alaskari et al., 2021).

Technological Preparation and Integration: Technological readiness and integration

are also crucial, as Walko et al. (2020) pointed out. For instance, the change in the usage of

Software as a Service (SaaS) based ERP systems brings many opportunities and new challenges.
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They are feature-rich and can scale. However, they require a more complex integration,

particularly concerning IT infrastructure and information management. The companies also need

to prepare and fund the support of their IT function concerning the challenges they are expected

to encounter. Additionally, the pre-project stage of testing allows for the detection of any

technical issues that might slow down the system or be detrimental to its performance to deal

with them before going live.

Further Strategies: Evolution and Adaptation: Apart from presenting these two

important stances, this project also aims to enhance these strategies for organizations embarking

on ERP initiatives. This paper intends to employ several empirical works and practical

experiences to formulate a framework for the implementation of ERP. Each dimension of ERP

projects will be addressed with this framework, including strategy, technology, change, and user

adoption.

Opportunities for Future Research and Practical Implementation

Nevertheless, this research can be expanded in the future to identify the impact of new

technologies in facilitating ERP implementations, such as AI and machine learning. Furthermore,

research on ERP implementation on a global scale and the consequences of ERP systems on

organizational performance and change over time would also be fruitful. Some real-life ERP

implementations could also have been discussed in detail, understanding the challenges and

success stories in different organizational settings.

By adopting and implementing the above strategies and also by conducting more

research, organizations can effectively harness the potential of ERP systems and clinch effective

implementations that positively impact organizational performance. As such, this project intends
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to help enhance such efforts by proposing a detailed model and concrete strategies for improving

pre-project stages in ERP adoption processes.

References

Alaskari, O., Pinedo-Cuenca, R., & Ahmad, M. M. (2021). Framework for implementation of

enterprise resource planning (ERP) systems in small and medium enterprises (SMEs): A

case study. Procedia Manufacturing, 55, 424-430.

Alharthi, S., Shehab, E., & Al-Ashaab, A. (2019). A Study on the Challenges of Implementing

Cloud-Based ERP. In Advances in Manufacturing Technology XXXIII (pp. 436-445). IOS

Press.
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Archana, M., Varadarajan, D. V., & Medicherla, S. S. (2022). Study on the ERP implementation

methodologies on SAP, Oracle Netsuite, and Microsoft Dynamics 365: A review. arXiv

preprint arXiv:2205.02584.

Baker, R. C., & Haddara, M. (2019). I am exploring consultants' role in ERP systems

implementations. In 2nd IADIS International Conference Information Systems (pp. 163-

170).

Flanding, J. P., & Grabman, G. M. (2022). We are launching ERP Systems to Deliver Successful

Change. In Purpose-driven Innovation: Lessons from Managing Change in the United

Nations (pp. 141-159). Emerald Publishing Limited.

Flores, C. (2019). Exploring strategic process improvements during an ERP implementation at

G3 Enterprises (Doctoral dissertation).

JS, S., Lakshminarasimhan, S. N., & Ganiger, B. (2022). Studies on Effective Usage of SAP

ERP Tool to Control Materials Planned Delivery Time in Oil and Gas Industries. Journal

of Mines, Metals & Fuels, 70.

Menon, S. (2019). Benefits and process improvements for ERP implementation: Results from an

exploratory case study. International Business Research, 12(8).

Obwegeser, N., Danielsen, P., Hansen, K. S., Helt, M. A., & Nielsen, L. H. (2019). Selection and

training of super-users for ERP implementation projects. Journal of Information

Technology Case and Application Research, 21(2), 74-89.

Patel, J. K. (2020). ERP implementation and successful post-sustainment. International Journal

of Computer Trends and Technology, 68(10), 44–48.

Qumer, S. M., & Purkayastha, D. (2021). ERP Implementation Failure at Revlon. IUP Journal

of Operations Management, 20(3), 52-67.

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Saxena, D., & McDonagh, J. (2019). Evaluating ERP Implementations: The Case for a

Lifecycle-based Interpretive Approach. Electronic Journal of Information Systems

Evaluation, 22(1), pp29-37.

Sebastian, G. L. O. R. I. N. (2020). Evolution of the role of risk and controls team in an ERP

Implementation. IJMPERD, ISSN (P), 2249-6890.

Ungureanu, I., Tapurica, O. C., Calinescu, M. S., & Mihai, I. I. (2022). ERP implementation in a

research-development institute in Romania-perception case study. Journal of Public

Administration, Finance and Law (JOPAFL), 241-49.

Walko, J., Olney, M., & Hunt, D. (2020). The rise of SaaS ERP solutions. Management in

Healthcare, 4(4), 340-349.

Ylätupa, J. (2021). Remote implementation of ERP/MES-system.