MODERN ERP: ERP Planning and Package Selection

Flashcards covering key vocabulary related to ERP planning and package selection, including project governance, cost components, selection processes, and software licensing models.

Organizational readiness assessment

The formal evaluation of a company's preparedness for ERP implementation.

Project governance

A framework that helps keep projects running smoothly, on budget, and on time by establishing roles, responsibilities, and documents.

Steering committee

The highest decision-making authority for an ERP project, responsible for its ultimate success or failure, typically led by an executive sponsor.

Executive sponsor

The leader of the steering committee who sets the tone and vision for the project's success and is most accountable for the project and team success.

Project portfolio management (PPM)

A process used by the steering committee to prioritize projects within the organization and staff them realistically with qualified individuals.

Project manager (PM)

The individual with the lead role in planning, executing, monitoring, controlling, and closing an ERP project.

Project team

A group of individuals who play a critical role in the success of the ERP project by living and breathing the implementation daily, often including subject matter experts and technical people.

Subject matter experts

Employees within the project team who are highly respected in their business units and have extensive domain knowledge in their functional area.

Project charter

A governance document for the deployment and completion of an ERP project that details its mission, objectives, business case, budget, organization, and roles and responsibilities.

Scope statement

A document that precisely details what is and is not included in the ERP project to establish clear project boundaries.

Scope creep

The expansion of an ERP project's original boundaries, a major reason why projects exceed their implementation schedule and budget.

Change control

The process of managing and controlling changes to the project scope after it has been defined.

Business case

An outline providing the justification for ERP, including the costs, expected benefits, and anticipated return on investment (ROI).

Business case rationales

High-level reasons (e.g., technology, strategic, business process) why an organization needs to implement an ERP system.

Key performance indicators (KPIs)

Measurable values that a company uses to determine how effectively it is in attaining its target business objectives, serving as the detail behind business process rationales.

Total cost of ownership (TCO)

All cost components associated with an ERP system, including software/database licenses, hardware, implementation, and maintenance/support.

Perpetual licensing model

A software licensing model where the vendor grants indefinite access to the software upon payment of an upfront licensing fee.

Named user licensing

A perpetual licensing method where a company identifies the total number of individual users who will access the ERP system and pays a license fee for each one (per-seat licensing).

Heavy user licensing

A type of named user licensing where individuals who use more of the system's functionality are charged a higher license fee.

Casual user licensing

A type of named user licensing where individuals who only view reports or run occasional queries are charged a lower license fee.

Concurrent user licensing

A licensing model that allows for an unlimited number of named users and accounts but limits the number of people who can access the system simultaneously.

Subscription-based licensing model

A licensing model, typically used by cloud vendors, that grants customers access to software for a specific period for a recurring fee (e.g., monthly or yearly).

Bolt-ons

Third-party software that offers additional features or logic, becoming part of the overall ERP solution and requiring seamless integration.

Full-time equivalents (FTEs)

A measure of how many employees a project requires, assuming all employees work a full work week, used to estimate the cost of internal resources.

Application management services (AMS)

Post-go-live maintenance and support for an ERP system, including functional and technical support, updates, patches, monitoring, and backup/recovery.

ERP selection committee

The committee charged with selecting the ERP system, typically led by the project manager and executive sponsor, including subject matter experts.

Requirements gathering

The process whereby the selection team determines all the functional criteria a company needs and wants from the ERP system, often through workshops.

Requirements document

The detailed output of the requirements gathering process, outlining all business requirements for a new ERP system.

Market survey

A process to determine which ERP vendors' systems might be contenders for selection, identifying them through various sources like websites, magazines, and existing partners.

Request for information (RFI)

A document sent to potential vendors to prequalify them and shorten the list to a manageable number for further consideration.

Request for proposal (RFP)

A detailed document sent to short-listed vendors, asking them to indicate how their solution meets specific requirements and outlining the selection and award process.

Best in class/family suite

An ERP implementation approach that combines core functions of the enterprise into a single, integrated ERP software suite from one vendor.

Best of breed

An ERP implementation approach involving the implementation of specialized modules from niche vendors and integrating them with modules from the core ERP vendor.

Middleware

Software that facilitates sharing data and business logic across disparate systems, often used to integrate 'best of breed' modules with a core ERP system.

Demo days

Scheduled presentations where ERP vendors demonstrate their software's capabilities to the selection committee, allowing them to verify self-reported information.

Weighted score sheet

A tool used to assist in making an objective ERP package selection decision by assigning importance (weights) to requirements and scoring vendors accordingly.

Fit/gap analysis

A methodology companies use to compare their business process requirements with what an ERP system offers to identify matches ('fits') and mismatches ('gaps').

Fits

Instances where the ERP system matches a company's required functionality and process design needs during a fit/gap analysis.

Gaps

Instances where there is a mismatch between a company's required functionality and process design needs and what the ERP system offers during a fit/gap analysis.

Request for quote (RFQ)

A solicitation for the financial conditions of a proposed ERP solution, including initial licensing costs, annual maintenance, and payment terms.

System integrator

An external partner hired to implement an ERP system, whose knowledge of the package and the company's industry, project management methodology, and culture are critical considerations.

Business case rationales

High-level reasons (e.g., technology, strategic, business process) why an organization needs to implement an ERP system.

Key performance indicators (KPIs)

Measurable values that a company uses to determine how effectively it is in attaining its target business objectives, serving as the detail behind business process rationales.

Business case

An outline providing the justification for ERP, including the costs, expected benefits, and anticipated return on investment (ROI).