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Is Agile methodology a good solution for ERP implementations

In my capacity as a consultant and having worked in multiple implementations, I have always thought about processes that could have reduced the cost, time and rework and hence would have brought about a high degree of customer satisfaction. Today, companies in the west have identified IT as an enabler of their business processes. However, after the recent economic recession, companies have started to realize the importance of curtailing costs of IT implementations through reduction of project implementation timelines, rework effort and fitness to requirements. Today, companies realize that their SME's cannot exactly articulate the complete set of requirements to the IT vendor at the beginning of the project. Moreover, since the SME's are experts in their areas of expertise only (eg: SME's for inventory, purchasing, shipping, financials etc..), they find it difficult to integrate the requirements and present a holistic picture to the IT vendor. This generally results in high costs of change in terms of both time and effort. This limitation can primarily be attributed to the fact that the end users and the SME's get to see the end to end solution in the implemented system at the very end stages of the project. Calling for a change in functional requirements in any of the modules at this stage have ripple effects in the entire end to end configuration and hence involves more costs.
The need of the hour is to present the end state of the system to the customer as early as possible through rapid iterative process so that the changes identified in the system by the customer can be incorporated at the early stages of the project itself. Each phase of the waterfall model used in the implementations today has dependency on previous phases.. For eg: the design cannot start until the requirements gathering phase has completed or the System Integration Testing cannot start unless the design and development phase has completed or the User acceptance testing cannot start unless the system integration testing has completed. Agile methodology offers a solution to the above issues through having better collaboration amongst small teams by having faster code/solution reviews and shorter release schedules. This enables a process of continuous and constant testing which constantly removes bugs in the system thus ensuring that the solution meets the customer requirement. Agile project planning methodology has a very important characteristic of having a backward step. Traditional waterfall models provide a project plan that is very rigid and avert to changes. Since there can also be situations that call for a delay in decision or delay in a phase, continuous changing and adaptive project plan is the need of the hour.
However, Agile methodologies do have some inherent disadvantages like they need active SME and end user involvement throughout the cycle. This can sometimes be very demanding for the client. Also since there is a constant change in the requirements, it takes a lot of time for the requirements to freeze and hence the scope of the project is not ascertained till a very late stage. Typically in a waterfall model, the development and design work starts only after the business requirements are signed off by the client. In Agile methodology the developers and other team members of the implementation team tend to work so closely with their SME counterparts that sometimes there can be a gap as far as integrations with other modules/systems are concerned. Also since the agile methodology calls for frequent deliveries, the need of testers remain throughout the tenure of the project and not only for unit, system and integration testing like is the case in waterfall model.

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