Chapter 6: ERP Project Management

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Chapter 6ERP Project Management

• Fundamental project management concepts

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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

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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

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Network Diagrams

• activity duration
• milestone
• immediate predecessors
• identified by arrows leading into
• durations can include in parentheses

activity (duration)
milestone
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networks

• networks make a good visual
• they are UNNECESSARY for identifying
• early starts earliest an activity can be begun
• late finishes latest an activity can finish
• slack spare time
• critical paths activities with no slack

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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

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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

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CPM Example

• FORWARD PASS
• activity duration predecessor
• A requirements analysis 3 weeks -
• B programming 7 weeks A
• C get hardware 1 week A
• D train users 3 weeks B, C
• schedule A start 0 finish 03 3
• schedule B 3 37 10
• C 3 31 4
• schedule D 10 103 13

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CPM Example

• backward pass
• schedule D finish 13 late start 13-3 10
• schedule B 10 10-7 3
• C 10 10-1 9
• schedule A 3 3-3 0
• slack A LF 3 EF 3 3-3 0
• B LF 10 EF 10 10-10 0
• C LF 10 EF 4 10-4 6
• D LF 13 EF 13 13-13 0
• critical path A-B-D

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Gantt Chart

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CPM

• can have more than one critical path
• activity duration predecessor
• A requirements analysis 3 weeks -
• B programming 7 weeks A
• C get hardware 7 weeks A
• D train users 3 weeks B, C
• critical paths A-B-D
• A-C-D
• both with duration of 13 weeks

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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

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Project Buffer
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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 - dont exceed available
  resources

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Resource Leveling

• unleveled

• leveled

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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

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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

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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

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Summary

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