Thursday 15 June 2023

Six methods of project evaluation

Everyone says that the success rate of ERP project implementation is not high, which is affected by many factors, but this article feels that the key is how to evaluate the success of the project. For the implementation of a complex project, it is not very easy or quite difficult to determine.

For enterprise informatization projects, especially the implementation of ERP projects, how should the project be evaluated? This paper believes that there are mainly the following six aspects:

1. Assessment of implementation progress. 


ERP project is a complex project, the departments, personnel, funds, resources, etc. involved are unprecedented for any enterprise, and whether the progress of the project can be carried out in accordance with the design plan is the key factor affecting the effect of the project. 


Therefore, to evaluate the success of the project, we must first evaluate whether the progress of the project can be carried out according to the expected schedule, if each step or each stage, can be carried out strictly according to the schedule, I believe that the project will be successful, otherwise there is a problem with the project design. In general, you can use the most commonly used project management tools to assess project implementation progress today, and Microsoft's Project is one of the good tools. 


In fact, many project implementation failures are due to the tiger's head, at the beginning everyone is full of confidence, the progress can basically be carried out according to the plan, and later, everyone's work is intersecting, often affected by other work and ignore the progress of the project, resulting in the project cannot continue. 


Therefore, in addition to corresponding institutional guarantees, there must be implementation tools.

2. Project cost assessment. 

Project cost is the second key factor to evaluate the success of a project, cost changes will directly affect the success of the project, if you blindly pursue the function and schedule of the project, and ignore the cost, it will not be a project, but a gamble. 


The current ERP project itself is very expensive, and there is no public price, the current price supervision has no basis, all rely on the mouth of the software vendor, say how much is how much, will negotiate the price to save a little, will not negotiate the price will spend more. 


However, once agreed with software companies and service companies (consulting firms), the question focuses on how to effectively use mutually agreed costs to achieve the desired mission objectives. 

At the beginning of the project, enterprise managers often think that the project has just been carried out, the investment is not much, and they do not pay attention to effective cost control, and after the implementation of the project for a period of time, they find that the project budget can no longer guarantee the completion of the project, or abandon it halfway, or increase investment, and additional investment will encounter the impact of whether the enterprise funds are sufficient. 


Therefore, we recommend that we try to make the project budget as accurately as possible before the start of the project, and set aside special funds to avoid affecting the progress of the project due to funds in the medium term. 


In addition, cost control should be strictly controlled from many aspects such as procurement and staff time, and it is recommended to carry out cost assessment in stages. If the cost can be controlled within the scope at each stage, then the final project must be able to ensure that it is within the budget cost, and the key is to adjust it in time when the project cost exceeds the budgeted cost to ensure that the overall cost is controlled within the scope.


3. Realize functional evaluation. 

ERP is a functional product, and the success of the final project depends on whether the function meets the expected requirements. The functions of ERP are generally divided into several parts: invoicing and inventory management, or intralogistics management as defined by the current company; Financial management, including general ledger, accounts receivable, accounts payable, fixed assets, etc.; 


Planning management, in most enterprises, involves the planning methods of two production modes, namely the MRP planning method of the single-piece small batch production mode and the JIT planning method of the large-scale assembly line production mode; Core resource management such as coarse capacity plans and fine capacity plans; In addition, it also includes (continued to write to the content of one page on the Internet) including human resource management, equipment management, engineering, mold, measurement, fixture management, quality management and other peripheral resource management. 


Generally speaking, software vendors will demonstrate their functions to the managers of the enterprise before signing the contract, and enterprises must watch the demonstration of various functions in detail and deeply when watching the demonstration, rather than browsing the horses, do not be prevaricated by the various excuses of the presenters of the software vendor, and must see with their own eyes what they say can be achieved, do not believe that there is no data can not be demonstrated, not the latest version and other explanation reasons.


If they say that there is any function, they will take it out on the spot, otherwise it is not, and any reason in the face of facts is pale. Before the end of the project, refer to the list of functions agreed by both parties, one by one, if each function is implemented, the project will definitely be successful.

4. Evaluation of project effectiveness. 


Functions are only basic requirements, the key depends on the effect, this may not be easy to understand, in fact, there are many functions in ERP management software that are very different from the effect on the surface. For example, MRP planning, may be most ERP software can now achieve this function, but whether it is accurate, whether it can directly guide production through MRP planning, or even directly arrange procurement according to the results produced by the plan, this is not any kind of software can do. 


This involves whether the calculation method is scientific, whether it meets industry norms, whether the factors considered are complete, whether the preset parameters are scientific, etc., such as whether the preliminary design is reasonable, whether the safety stock design is reasonable, etc. will directly affect the results of the plan, and the real software company's skills are distinguished here.

5. Operability assessment. 

The ultimate goal of ERP software is to be used by the majority of employees in the enterprise, so operability is another important indicator of project success. Most users of the enterprise, especially the front-line employees, the level of the computer will not be too high, how to make the software has an easy to operate interface, so that ordinary employees can also use the software to operate, to ensure that every user can use ERP software conveniently and quickly is an important condition for the success of the project. 


There are many software that are very functional, but it is very difficult to operate and cannot be used by non-professionals, which is definitely not excellent ERP software. Excellent software should be as long as people who are familiar with the business can operate, the so-called WYSIWYG.

6. Evaluation of the continuity of the project. 

ERP project is a long-term investment project that enterprises rely on for development, and is definitely not a consumer project, so whether the project can be continuously applied with the development of the enterprise is another important indicator to evaluate the success or failure of the project. 

Sustainability is reflected in several aspects, such as upgrade capabilities, function expansion capabilities, customization capabilities, and cross-platform capabilities. 

The current software platform is upgraded every few months, of course, the upgrade of the application system does not necessarily require to keep up with the speed of the system software. But also to upgrade in time, with the continuous development of management theory and management methods. 

The upgrade of management software must at least keep up with the update speed of management methods and calculation methods, otherwise it is backward; The ability to expand functions is an important indicator for evaluation, and whether the functions can be updated in time according to the development of the enterprise is very important for the enterprise, and the ability of customization and cross-platform capability is also important.

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