Chapter 6: ERP Project Management Fundamental project management concepts

ERP Installation Projects Need aggressive implementation –Organization needs to start gaining benefits Need clear definition of objectives –Avoid scope creep – incremental changes in system during installation Steering committee very important –Management –Users –Consultants as needed

Critical Path Method Identify the fastest schedule to complete a project –Makes a lot of assumptions Accurate time estimates Unlimited resources Develop activity list –Durations –Predecessor relationships Network of activities

Network Diagrams activity duration milestone immediate predecessors identified by arrows leading into durations can include in parentheses activity (duration) milestone

networks networks make a good visual they are UNNECESSARY for identifying –early startsearliest an activity can be begun –late finisheslatest an activity can finish –slackspare time –critical pathsactivities with no slack

Project Scheduling MODEL COMPONENTS activities what needs doing predecessors what this activity waits on durations how long –durations are PROBABILISTIC –CPM DETERMINISTIC assumes unlimited resources

Critical Path Method INPUTS: activities, durations, immediate predecessors ALGORITHM forward pass schedule all activities with no unscheduled predecessors ES/EF determine early starts & early finishes (start ASAP, add duration) backwards pass schedule in reverse (schedule all activities with no unscheduled FOLLOWERS) LF/LS determine late finishes, subtract duration to get late starts slack difference between LS-ES (same as LF-EF) critical path all chains of activities with no slack

CPM Example FORWARD PASS activitydurationpredecessor A requirements analysis3 weeks- B programming7 weeksA C get hardware1 weekA D train users3 weeksB, C schedule Astart0finish0+3=3 schedule B33+7=10 & C33+1=4 schedule D1010+3=13

CPM Example backward pass schedule Dfinish13late start=13-3= 10 schedule B1010-7= 3 & C1010-1= 9 schedule A33-3= 0 slackALF=3EF=33-3= 0 BLF=10EF= = 0 CLF=10EF=410-4= 6 DLF=13EF= = 0 critical path:A-B-D

Gantt Chart

CPM can have more than one critical path activitydurationpredecessor A requirements analysis3 weeks- B programming7 weeksA C get hardware7 weeksA D train users3 weeksB, C critical paths A-B-D A-C-D both with duration of 13 weeks

Buffers Assure activities completed on time (Goldratt, 1997) Project Buffers: after final project task Feeding Buffers: where non-critical activities lead into critical activities Resource Buffers: before resources scheduled to work on critical activities Strategic Resource Buffers: assure key resources available

Project Buffer

Resource Constraining CPM assumes unlimited resources NOT TRUE –may have only a finite number of systems analysts, programmers RESOURCE LEVELING - balance the resource load RESOURCE CONSTRAINING - don’t exceed available resources

Resource Leveling unleveledleveled

Criticisms of CPM Rarely to activities proceed as planned –critical path therefore very volatile options to speed some activities available –crashing resource limits not reflected –resource leveling schedule likely to be very lumpy –resource smoothing

Effective ERP Implementation Motwani et al. [2002] Incremental, bureaucratic, strategy-driven Support with –User preparation –Inter-organizational linkages –Careful change management Redefinition of project –Respond to identified needs Improve project management –More meetings, tighter control

Effective ERP Implementation Motwani et al. [2002] Subdivide project into manageable parts Add or remove resources as needed Time layoff & hiring –Especially external consultants Training critical

Summary ERP can be very beneficial Implementing ERP (no matter how) is a project CPM provides a useful tool for project scheduling & management