A PROJECT REPORT ON ERP MANAGEMENT

SUBMITTED BY CHANDRA SEKHAR SAHU REGD NO-10KANHLIPGDMFT013

NEW HORIZON COLLEGE,BANGLORE

STUDENT DECLARATION
I hereby, declare that this Report entitled, A PROJECT REPORT ON E-COMMERCE , submitted in partial fulfillment for the award of Post Graduate Diploma in Management is a record of independent research work carried out by me.

I also declare that this project is a result of my own effort and has not been submitted earlier for the award of any degree/diploma/associate ship/prize by New Horizon Leadership Institute or any other University.

DATE:18/08/2011 PLACE: BANGALORE

CHANDRA SEKHAR SAHU

EXECUTIVE SUMMARY

This study is done to get a comprehensive picture of the implementation of Enterprise resource planning in business process. The objective of this study is also to focus on the area where the ERP can be useful to implement. It also covers the functionality, use of ERP in strategic planning and the role of ERP in cost reduction. This study also discloses the reality of actual need of being implementing the ERP in business process. During this study one would get a fair idea about the brief of the implementation of ERP, what was the business scenario before the use of ERP and what is the present scenario of after use of ERP. It also gives a concrete idea of the major area of failure of not successful implementation of ERP. The whole process of the ERP and the technical details are not included here But it is enough to give an through idea of what is ERP , the need of ERP, cost of implementation of ERP, pros and cons of ERP, the process of ERP and last but not the least it also covers the different modules of ERP.

INTRODUCTION

In 1990 Gartner Group first employed the acronym ERP as an extension of material requirements planning (MRP), later manufacturing resource planning [5][6] and computerintegrated manufacturing. Without supplanting these terms, ERP came to represent a larger whole, reflecting the evolution of application integration beyond manufacturing.[7] Not all ERP packages were developed from a manufacturing core. Vendors variously began with accounting, maintenance and human resources. By the mid1990s ERP systems addressed all core functions of an enterprise. Beyond corporations, governments and nonprofit organizations also began to employ ERP systems. ERP systems experienced rapid growth in the 1990s because the year 2000 problem and introduction of the Euro disrupted legacy systems. Many companies took this opportunity to replace such systems with ERP. This rapid growth in sales was followed by a slump in 1999 after these issues had been addressed. ERP systems initially focused on automating back office functions that did not directly affect customers and the general public. Front office functions such as customer relationship management (CRM) dealt directly with customers, or ebusiness systems such as ecommerce, egovernment, etelecom, and efinance, or supplier relationship management (SRM) became integrated later, when the Internet simplified communicating with external parties.[citation needed] In 2008, the Tennessee Board of Regents completed implementation on all major modules Finance, HR/Payroll, and Student for all 19 institutions in the state. The implementation includes the integration of the technology centers1 into the Finance module by host community colleges. As of fall 2008, all institutions were operational with only follow-up training remaining and some historical data conversion left to do. The cost overrun for Tennessee-specific modifications was less than one percent of the total contract costs of just over $50 million. This is a testament to the excellent project management at each campus and the oversight provided by the executive leadership beginning with the chancellor, the presidents, and all levels below. Roane State Community College began its implementation of the Banner ERP system in July 2005 with the Luminis portal and finished the Student module in March 2008. The project took three and a half years. While our experience clearly involved implementation of SunGards system, the project management techniques and processes shared in this article are universal and may be adapted to any ERP implementation. The advice is grouped by stage.

Before Implementation
Before beginning the actual implementation, its a good idea to set the stage properly with the people who will be involved or affected by the new system:
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Secure executive support Create anticipation in the community

Secure Executive Support

One of the first elements of any major project, including ERP implementation, is to gain the support of executive management. If they do not see the value in the project, then at best your job will be very difficult and at worst you will fail. As mentioned, executive management, beginning with the chancellor and the presidents, engaged in the planning process. The need for change was clearly articulated to the executive staff at both the Board of Regents and the institutional level. For the institutions the need was clear; our legacy systems were COBOLbased flat-file systems that did not provide the type of real-time business intelligence needed for higher education institutions today. Without executive support, the project is doomed to failure. Users perceive the project as something the IT staff want and not an enterprise project. Without executive support, users and department heads will not buy in and therefore will not feel the need to invest the time necessary to implement a large ERP system successfully.

Create Anticipation
One thing you as a project manager can do is create anticipation. Once the RFP was awarded, I began creating anticipation for the project by placing posters on all campus bulletin boards that stated: ERP is coming Are you ready? This created curiosity among the faculty and staff. I then made presentations to key groups on campus including the Faculty Senate, Administrative Council, and Executive Council to explain what ERP meant, the anticipated timetable, and how all groups would be affected.

Planning
When planning before beginning the ERP implementation process, set up the proper structures to support your efforts:
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Conduct business process improvement Set data standards Plan for team building

Conduct Business Process Improvement

One of the first steps in planning your project is to understand how you do business now. To do that, you need to use the business process improvement (BPI) model. (See also Diane Galloway, Mapping Work Processes.2) Most of the functional users at Roane State had no training in BPI. To address that shortcoming, we brought in an outside consultant to train them in how to use BPI for process improvement. Because one of the first steps in BPI is to catalog how you currently conduct your business, we asked key staff to conduct a process inventory. Each functional team was asked to identify the major processes in their area and then map those processes for future reference. These processes were to be compared to best practice process under the new Banner system. An additional idea behind teaching the teams business process analysis methods was to make them aware of the cross-departmental coordination required by a relational database. The BPI training was one method used to begin the process of sharing data. I would add that the resistance to the concept of cross-departmental shared data was extremely difficult to overcome, and the transition from flat file silos to shared data proved to be tough for our teams. The primary impact of BPI training was in revealing the interdependence of the processes performed by each functional area.

Set Data Standards

Data standards were addressed fairly early in the planning process. A data standards committee was formed at the Tennessee Board of Regents level, and a model document was provided for each institution. At Roane State, we formed our own data standards committee and modified the draft document to meet local requirements. After the document was approved and distributed, we scheduled and presented data standards training for everyone who was to perform data entry at the college. While this did not prevent duplicate entries, I believe it lowered the number we would have had without the training.

Plan for Team Building

Another important aspect of beginning a major project is determining how people will work with one another. To prepare our functional teams to work together and with other teams, I enlisted the support of our Continuing Education department. I planned a series of training sessions on team building and team dynamics for all members of functional teams. This prepared everyone for the interpersonal dynamics and stresses that always occur when teams work on a task over time. Other skills include group problem solving and conflict management. Additionally, the project manager should be skilled in, or have access to, group facilitation.

Most systems are modular to permit automating some functions but not others. Some common modules, such as finance and accounting, are adopted by nearly all users; others such as human resource management are not. For example, a service company probably has no need for a manufacturing module. Other companies already have a system that they believe to be adequate. Generally speaking, the greater the number of modules selected, the greater the integration benefits, but also the greater the costs, risks and changes involved.[citation needed] Connectivity to plant floor information ERP systems connect to realtime data and transaction data in a variety of ways. These systems are typically configured by systems integrators, who bring unique knowledge on process, equipment, and vendor solutions

Direct integrationERP systems connectivity (communications to plant floor equipment) as part of their product offering. This requires the vendors to offer specific support for the plant floor equipment that their customers operate. ERP vendors must be expert in their own products, and connectivity to other vendor products, including competitors.

Database integrationERP systems connect to plant floor data sources through staging tables in a database. Plant floor systems deposit the necessary information into the database. The ERP system reads the information in the table. The benefit of staging is that ERP vendors do not need to master the complexities of equipment integration. Connectivity becomes the responsibility of the systems integrator.

Project Management Skills and Tools

What do you need to begin?
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Project management skills Tools for success A scheduler

Skills Needed
A project manager is responsible for managing resources, time, and the scope of a project to ensure the project stays on schedule and within budget.
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Resources include people, equipment, and other material. Time management includes task duration, dependencies, and meeting milestones. Scope includes the size and requirements of the project.

All of these tasks must be managed simultaneously. I cannot discuss project management in any detail here that would require an entire article by itself. However, you should have a basic understanding of tasks, slack days, critical paths, and dependencies. You also need to understand how dependencies and meeting milestones affect the overall project. If you do not, I recommend taking a basic project management course before the project begins.

Tools for Success

To assist you in managing hundreds of tasks and thousands of subtasks, you need the right tools. The project management tool of choice for the Banner project was Microsoft Project. MS Project is a widely used and should be mastered by anyone in the role of project management. MS Project allows you to enter all tasks, set start dates and end dates, and create dependencies and subtasks. The software can then track actual versus planned dates and calculate whether you can meet the target milestones. Use of MS Project was instrumental in tracking the hundreds of tasks in each functional area at Sloane State over the life of the ERP project. In addition to project plans, our vendor provided each functional team with detailed task lists tied to the project plans and linked with the training that team members attended. The task lists were separate from the project plans and used by the functional consultant and the functional team lead. These lists proved more useful to the teams than the project plans in MS Project.

Appoint a Scheduler
The scheduler is an important role in managing the large number of tasks that will need to be tracked during implementation. In some projects the project manager can perform this function,

but for large projects it is best to have someone else fill the role, especially if you have three or four modules under way at one time. The scheduler works with the project manager to prepare project management schedules for review by collecting status reports on tasks for a reporting period. The scheduler maintains contact with the team leads to collect their status on tasks and then reports that status to the project manager. For our project, the scheduler also sent reports to the Tennessee Board of Regents.

Organizing for Success

The organizational structure set up to support the ERP implementation can make or break the project. Plan your teams carefully:
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Organize cross-functional teams Plan for collaboration

Organizing Teams
One issue to address early in the project is ensuring that everyone knows this is not an IT project. Functional managers must take ownership. To accomplish this, they must be intimately involved in the process. They must be part of the team. Teams must be created for project implementation, as well as for functional, technical, and executive management. Roane States team plan included an executive Steering Committee, a project manager, a Banner implementation team, six functional teams, and one technical team. The functional teams consisted of the Communications Team, the Portal Team, the Student Team, the HR/Payroll Team, the Finance Team, and the Advancement Team. Finally, a Technical Team consisting of programmers, analysts, and networking staff completed the roster. The teams were organized as shown in Figure 1 ERP's scope usually implies significant changes to staff work processes and practices. Generally, three types of services are available to help implement such changesconsulting, customization, and support. Implementation time depends on business size, number of modules, customization, the scope of process changes, and the readiness of the customer to take ownership for the project. Modular ERP systems can be implemented in stages. The typical project for a large enterprise consumes about 14 months and requires around 150 consultants. Small projects can require months; multinational and other large implementations can take years.[citation needed] Customization can substantially increase implementation times.

Figure 1. Team Organization for the Sloane State ERP Implementation The Steering Committee, at a minimum, should consist of the president, the chief financial officer, the CIO, and the chief academic officer. Others may be included depending on the size of the institution. Your organization will vary depending on the system you are implementing. The Implementation Team was made up of the team leaders from each of the functional teams plus additional members from subteams such as Recruiting, Admissions, Financial Aid, and Technical. This organization allowed information to be shared quickly across all teams and facilitated coordination between teams. Functional team leads were key functional users from the areas indicated, generally the department heads for the functional areas addressed by the ERP modules. These individuals were critical to the success of the implementation. I cannot emphasize how important it is to select knowledgeable personnel to fill these positions. Teams included staff members from the functional areas as well as staff members from crossfunctional areas. Many of the functions cross departmental boundaries and need to closely coordinate during implementation. One of the most important things you will do as a project manager is to get the team leaders and members to take ownership of their process. That means you must take a back seat in the process. One technique I used was to praise the teams in public at every opportunity. I also encouraged them to present the status on their teams activities publicly when given the opportunity and featured them in the project newsletter (discussed later). This identified them with the activities of their teams. At some point, it becomes their part of the project. As the project manager, your role is to encourage and to provide the resources needed by the teams. Additionally, you must remove barriers to the teams success.

Another aspect worth mentioning is the Tennessee Board of Regents ERP Steering Committee, a state-wide committee that included institution presidents and chaired by the chancellor. They met monthly to review the progress of implementing the ERP system and to make decisions on changes and future directions for the project. I believe this leadership was instrumental in keeping cost overruns to a minimum and to the project being named by CIO Magazine as one of the top 100 projects for 2008.

Plan for Collaboration

One thing I did at the very beginning was to create a collaboration space for centralized team coordination. The site, created on Microsoft SharePoint, was designed as a team collaboration site with a place for announcements, incidental team assignments, a training calendar, a document library, and links to electronic forms and other resources. Also on this site were the agenda and minutes for all Implementation Team meetings. Doing this made keeping up with all the documents, training schedule, and meetings much easier.

In addition to creating the collaboration site, I organized my e-mail using the tools in Outlook. I created folders for each topic, then rules to check e-mail and file messages based on Banner topics. This allowed me to keep up with the flurry of messages that arrived each day. Additionally, the MS Exchange administrator created distribution lists for everyone involved in the project and for each functional team. These were used in conjunction with Tennessee Board of Regents distribution lists to ensure that all members of the teams were kept abreast of updates, training, meetings, and changes as the project progressed.

In the broader collaboration, the Tennessee Board of Regents used a cohort approach for training and implementation. This arrangement provided for considerable cost savings. Institutions were grouped into two cohorts, and training sites were established by geographic regions at centrally located institutions in each major division of the state, west, middle, and east and used throughout the implementation. Using cohorts and regional training centers benefited all institutions by reducing travel, training costs, and one-on-one consulting hours.

Implementing ERP typically requires changing existing business processes. Poor understanding of needed process changes prior to starting implementation is a main reason for project failure. It is therefore crucial that organizations thoroughly analyze business processes before implementation. This analysis can identify opportunities for process modernization. It also enables an assessment of the alignment of current processes with those provided by the ERP system. Research indicates that the risk of business process mismatch is decreased by:

Meetings and Reporting

Frequent, effective communication with the various project teams and constituent groups keeps the project moving and helps manage everyones expectations. You should:
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Plan for frequent meetings Plan for reporting Provide a war room Create a communications plan Consider branding Use creative information campaigns

Plan for Frequent Meetings

Meetings are the life-blood of project management. As such, they must be organized and to the point. Where you are in the process will determine how often the meetings should occur. The first meeting of any major project is the kickoff meeting, which the vendor should do. Attendance at this meeting includes Steering Committee members and other executive staff as well as the Implementation Team leads. The scope of the project will be outlined along with the level of commitment needed for the project to succeed. The vendor project lead should emphasize the importance of executive support for the project. Without such support the implementation will have a much more difficult time succeeding. Following the kickoff meeting, the Implementation Team should begin regularly scheduled meetings. Our team began meeting monthly initially and continued that schedule until the first module began conversion. After that, we met weekly until the last module went live. Since then, the Implementation Team has scaled back to monthly meetings. We will continue those as needed. The functional teams have their own kickoff meetings. These much more technical meetings will be conducted by the vendor consultants assigned to each team. Attendance by all team members is mandatory. These kickoff meetings will lay the foundation for all activities and training for the teams. The schedule and all tasks that must be completed to go live are discussed. The functional teams are where all of the action takes place converting the data from the old system, learning the new system, and preparing to train the end users on the new system. These teams are the most important aspect of conversion. Make sure you appoint good people to them. In addition to the local meetings, a state-wide weekly teleconference of project managers was held to discuss issues and share information.

Plan for Reporting

If meetings are the life-blood, reporting progress is the heartbeat of the project. As someone halfjokingly said, What you dont know will hurt you. This is certainly true in project

management. As a project manager, you must know the status of every task performed by the teams. For our project, we had several layers of reporting. Each team was required to report weekly the status of all tasks from the previous week. That report was then consolidated and sent to the Board of Regents. As part of the contract, a third-party project management consultant consolidated all reports from across the state and produced a (weekly) dashboard on the overall status of the project. This was shared with the presidents and the project managers. Statuses were reported as green for on track, yellow if behind schedule, or red for being in danger of not meeting go live target dates. No project manager wanted his teams in the red.

Provide a War Room

To provide the teams with a place to meet where they could make notes on a whiteboard or flip chart, we created a Banner War Room. This room was equipped with microcomputers, projector, screen, tables, chairs, whiteboards, flip charts, and office supplies. The room was added as an asset to Outlook and managed by the scheduler. Teams could schedule team meetings, meet with consultants, conduct conversion activities, and hold training sessions in this room. This was an invaluable asset, and I highly recommend creating a workspace for your teams during the project.

Create a Communications Plan

One of the biggest obstacles to overcome will be resistance to change. Therefore, as project manager, you will need to understand change management. For most of the project, only a small percentage of your organization will be engaged. Since most ERP projects take many months, or in our case over three years, you will need a way to introduce the change and keep everyone else informed of what is being done. You also have to deal with the why questions. Why do we have to change? It is working just fine, why change? You need a way to address these legitimate concerns. One thing you can do to facilitate change is to make public presentations. I presented status reports at the faculty in-service meeting at the beginning of every semester. I also presented updates to key organizations such as the Faculty Senate, Executive Council, and Administrative Council. Another thing you can do is to publish a newsletter (see Figure 2). I asked the Public Relations and Marketing Department to form a Communication Team to assist me with change management. The newsletter, published each semester, featured the team that was to go live during that semester. Additionally, it also included a status report on each of the other teams. Newsletter Reporting Progress on ERP Project

Consider Branding

The first project we completed was the portal. The portal product, Luminis, functions as the front end to all Banner modules. The first thing our Implementation Team did was to brand our portal. Our athletic teams are known as the Raiders, so we chose RaiderNet as the portal name (see the logo in Figure 3). A tag line of Campus Without Walls was added to emphasize the academic connections this portal represented. Branding helped with identification as an institutional project and not an IT project. Branding can be a powerful tool in assisting with change management.

Use Creative Information Campaigns

In addition to presentations, newsletters, and branding, changes in processes will require special attention. These changes affect major constituent groups in the institution and must be communicated carefully to prevent confusion. To aid in the transition from the old student system to the new, the Communications Team was asked to create a campaign. They developed the idea of a ticket and the campaign Your Ticket Inside. (See Figure 4.)

Figure 4. RaiderNet Ticket for the Your Ticket Inside Campaign The Student module was scheduled to go live in April 2008. During the fall semester 2007, the Public Relations and Marketing Department produced the small tickets and posters that looked like tickets that invited students to watch for more information on their Ticket inside RaiderNet. Continuing with the ticket inside theme, in January 2008 we began communicating with students on how to register for classes. E-mail, postcards, and a ticket icon on the main web page directed students to instructions on how to register for classes using Banner. To register for summer classes, students had to use our legacy system, but registration for all fall 2008 classes had to be on the Banner system. The campaign was very successful; we experienced the largest number of students ever registering on the first day of registration.

Additional Measures
Outside the formal project implementation process are other issues to address:
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Prepare for problems Plan for emergency funding Plan for staffing backfill Always celebrate success

Prepare for Problems

I do not want to leave the impression that the implementation went without problems. We certainly had our share. One of the first issues was my failure to recognize the need for a scheduler. I thought I could perform that task as part of my project management duties. As it turned out, this was not practical because I still had all the responsibilities related to daily IT operations. After training someone for the tasks involved in the role of scheduler, things became a little more manageable. Implementing an ERP system will cause anxiety, frustration, and tension. Anything that changes the status quo generally does people do not like to change. You need to anticipate that resistance. It will come. We tried to anticipate this by conducting team training for all team members, but there were times when tempers flared and frustration arose at having to do it again. One aid in addressing this frustration was the Implementation Team meetings. Teams going through problems could share with the other teams how they dealt with the situation and move on. One team got behind schedule in the process, and we had to hire a consultant to help them get back on track. You need to anticipate that this will happen and plan for it. Another issue that presented problems was the concept of shared data. Our legacy system was based on flat files owned by each functional area, and we were moving to a relational database with shared data. We had many discussions about who owned the data and who was going to be allowed to change it. The data standards document was critical to solving this problem.

Plan for Emergency Funds

One thing in undertaking a project of this size is that unexpected things happen. Knowing this up front, we planned contingency funds for consulting, additional equipment, software, travel, and training:
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One of the teams needed additional consulting that fell outside the contract terms. We found functional and technical users could benefit from have dual monitors. The programmers needed new SQL development tools.

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Additionally, all schools had to purchase an ad hoc reporting tool. The contingency funds also paid for unplanned travel and training that came up during implementation.

None of this would have been possible had we not planned in advance.

Plan for Staffing Backfill

During implementation, the team leaders are expected to dedicate one hundred percent of their time to the project. While this never happens, they will spend a majority of their time managing the project, attending training, and working on conversion. Team members will also require a majority of their time working on project tasks. This means they will not be able to do their regular jobs. Here is where you will need to provide backfill full- and part-time personnel to assist with those tasks needed to run day-to-day operations. Roane State chose to budget for backfill in each department directly impacted by the implementation. Backfill began three months prior to the start date for each module and continued for six months after the go live date. While we did not always succeed in finding qualified individuals, the additional positions provided valuable support and relief for those on the front line of implementation.

Always Celebrate Success

I cant stress the importance of this action enough always celebrate success. Team recognition with ice cream, lunch, or just a candy bar goes a long way in making team members feel good about the job they are doing. During the project there will be times when the stress of implementation will lead to hurt feelings, flaring tempers, and other stressors. Small celebrations are a way to ease some of those feelings, especially if the team does not feel appreciated.

HOW ERP SYSTEM WORKS

 A typical ERP system would use multiple component of computer software and hardware to achieve integration ERP delivers a single database that contains all data for the software module

Post-Implementation
What happens after the project has successfully implemented your new ERP system? Theres still more to do:
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Continue team meetings Perform an after-action review Revisit your business processes Appoint a reporting review team Reemphasize data standards Plan for retiring the legacy system

Continue Team Meetings

Just because you are live does not mean you are finished. Many further activities will keep you and your team busy for months, even years, to come. My first recommendation is that you keep your Implementation Team together. Our team cut back the weekly meetings to monthly, but we still meet. The Implementation Team has plenty of cross-departmental things to coordinate, such as shared tables and security classes. You will need to begin a plan to clean up any dirty data, which will always creep in during conversion, and historical data will need conversion. Finally, you will have add-on and third-party software installation to work on.

Perform an After-Action Review

Another thing you will need to do is conduct an after-action review. The Implementation Team can do this task, or you can convene a new team. This group should review all the new processes and see if improvements can be made. One thing you can look for are you taking advantage of all the tools the new software brings to the process? Many times, the functional teams are overwhelmed with the implementation process; they do not have time to explore the full potential of the new system. They implement only the bare necessities needed to get the system operational. Now is the time to go back, review those processes, and take advantage of anything the software has to offer.

Revisit Business Processes

You should also revisit the BPI model. You will want the After-Action Review Team to look at your cross-departmental processes and ensure that the functional users are not trying to make the new system look like the old one but to improve the process. This should be done after the functional users have had an opportunity to work with the new system and become thoroughly familiar with its processes.

Appoint a Reporting Review Team

You will probably find, as we did, that most of your old reports are no longer of any use. I recommend you convene a group to review reporting needs. They should identify reporting

needs based on input from the functional and end-users. This list should be prioritized and then a plan developed to locate reports already created by other institutions or, if they are not available, devise a plan to create the necessary reports.

Reemphasize Data Standards

By this time in your project, you will find that data standards will need to be emphasized again. You will find some records have missing or incorrect information. You will find that some fields contain different information that means the same thing. All of this will need to be addressed. In addition to cleaning your data, you should plan to retrain all functional users on data standards.

Plan for Retiring the Legacy System

As your new system comes online, you need to plan for an orderly retirement of your old system. You should consider how long you need to operate the legacy system. Some departments will need access to old data for audit purposes. If it is not feasible to operate the old system indefinitely, you will need to plan for a speedy conversion to the new one.

What is SAP MM? SAP MM (Materials Management)    SAP MM is a module is used for Procurement Handling and Inventory Management. The module has two important master data - material and vendor. Broadly, the various levels that can be defined for a SAP MM implementation are:      Client, Company Code, Plant, Storage Location, Purchase Organization

CONCLUSION
The past three and a half years have been exciting and challenging because of Sloane States implementation of a new ERP system. Most IT personnel will not go through more than one of these implementation processes in their careers unless they are consultants due to the costs. More than likely i will go through a major version upgrade;. Endnotes 1. Tennessee Technology Centers are the states providers of workforce development training. 2. Diane Galloway, Mapping Work Processes, American Society for Quality, Milwaukee, 1994. Reduced overheads and inventory. Timely responsiveness. Market share and image enhancement. Keep up with technology changes. Only way for integrated systems for client with multiple locations.