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Project Management + ERP Solutions

Your guide in the world of Business, Project Management and ERP

Cost Baseline

Budget session has started and everyone is eager to know about Railway and Union budget. Budget is a pet subject with every industry.

In Project management budget is considered as cost baseline or a reference  to measure cost variance. As a good practice always use WBS to prepare your  budget. Decide the budget at WBS or work categories level and then aggregate it upwards to decide the final project budget. Do not forget to keep some part of the budget to handle exigencies. Monitoring the budget can help you control cost overrun.
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Scope Baseline

Baseline is a yardstick or reference to measure variance. So what is scope baseline? Scope baseline is derived from 3 elements -Project Statement, WBS and WBS Dictionary.

Let’s take example of upcoming T20 World Cup. It is also a project. Scope of this project is decided along with inclusions and exclusions. E.g. rule of DRS i.e. challenging umpire’s decision is decided as part of scope. So it is much more than project description.

Project statement is like an essay of entire project with description, features, assumptions, exclusions etc. Project Statement helps in deciding boundaries of the project and hence an important baseline. So what is WBS and why?

The Baseline Issue

In a T20 match everyone follows one indicator or benchmark which is runs per over. For example, if run rate target set by team playing first inning is 8 per over then team playing 2nd inning should constantly score above 8 runs per over to finally win the match. So entire monitoring happens against runs per over as a benchmark or yardstick.
In a Project also we need such an indicator or yardstick so as to effectively chase it. In project such a yardstick is known as the Baseline.

There are total 3 baselines against scope, time and cost respectively.

 

‘Go Live’ Important Phrase & Phase of ERP Industry

On 1st June 2013 we had planned to Go Live with a new SAP system at Takshi Auto, a fast growing automobile component manufacturing company at Chakan, Pune. The entire team including the management team of Takshi, system users and the consulting team from Godrej Infotech were  anxious and working very hard to make this phase successful.

So what is Go Live and why it is so important for ERP products like SAP?

Go Live marks the beginning of a new ERP system.

Okay so what’s so great about it? Are we not starting a new IT system or a new software/application every now and then? So what’s so great about ERP?

ERP is a single software for any organization & it replaces all other softwares such as inventory management, finance, purchase etc.

Going Live means stopping all existing systems and shifting to new single system called ERP from that moment. So it is kind of like heart replacement surgery but only for a company.

So what is the danger?….if single system stops then the entire organization will come to standstill. As is the case in replacing a person’s heart with a new heart….if it doesn’t work, then a person can collapse or even die.

In case of ERP failure all transactions of the organization such as receiving of raw material, dispatching of finished material, processing of work in process material, processing of payments, recording of quality parameters…..everything can come to standstill as there is no information available….completely blind folded organization.

So are we not testing ERP thoroughly?

Yes through testing of any ERP system is mandatory. Many times testing is carried out in a box i.e. server or a system which is different than real system, also called as Production system or a system in which real transactions are carried out. Hence for a large and complex ERP, such as SAP, a small error can halt the entire system resulting in a complete collapse.

Imagine the case of a batsman who is playing well in net practice; is his performance in real match guaranteed? Not at all…it’s finally that small but important luck factor which is equally important.

But don’t worry…..in my long ERP career I have seen very very few failed Go Live attempts and all those failures had a strong reasoning behind them. So do thorough testing before you Go Live and you will have high chances of success.

Feel free to ask any questions regarding “Go live”. I will be happy to answer them.

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