CH 1 Introduction to enterprise systems for management
System Benefits of an ERP System
1) Integration of data and applications across functional areas 2)Improvements in maintenance and support as IT staff is centralized. 3)Consistency of the user interface across various applications means less employee training, better productivity, and cross-functional job movements. 4)Security of data and applications is enhanced due to better controls and centralization of hardware.
Why is the design and selection of ERP architecture crucial for the implementation project? What are the long-term implications of selecting a wrong architecture?
A business organization must start with the correct architecture to meet their needs for a new ERP system. If they choose a chocolate implementation, but really only need a package-driven vanilla architecture, they may waste large sums of company money and time. Chocolate implementations can be very time consuming and costly. Also, vanilla implementation architectures are toted as being the best option from vendors, as they utilize the "best business practices" across various industries.
E-business has Disruptive technology— while ERP has:
Adaptive technology
How is the role of an ERP system different from traditional TPS, MIS, DSS and others? Can an ERP system support all levels of management?
An ERP system is different in that it brings all departments within an organization together. It seeks to unite all departments, open communication and consolidate all databases into one accessible database. Previous information system models did not have this focus or ability. ERP can support all levels of management, because it allows each level to utilize information in a customized manner. Upper-level management can utilize reports suited to their positions as overseers, while operational management can utilize detailed reports for their specific functions.
Business Process Re-engineering
Business processes will need to be changed, adjusted, or adapted to the new system to use the functionality of an ERP system fully.
When implementing an ERP system, organizations have two choices:
Change business processes to match the software functionality. Modify the ERP software to match the business processes.
System Limitations of an ERP System
Complexity Consolidation of IT hardware, software, and people Data conversion and transformation from an old system to a new one can be a tedious and complex process. Retraining of IT staff and end users of the new system can produce resistance and reduce productivity.
Project Management
For an ERP system to be implemented successfully, project management must provide strong leadership, a clear and understood implementation plan, and close monitoring of the budget.
From the examples provided in the chapter on ERP success and failure stories, what are the critical factors of success and failure?
For success, it is critical that all management is on board with the plan to implement an ERP system. Their attitudes towards the system and willingness to be a part the developmental stages will decide its success. Choosing the correct architecture and moving forward with it is also important. The failure stories have two things in common: they did not have everyone on the same page, nor did they stick to the implementation plan.
An ERP system consists of:
Hardware Software Process Information Process People
Discuss the role of ERP in organizations. Are ERP tools used for business process reengineering (BPR) or does BPR occur due to ERP implementation?
Implementing an ERP often means BPR will take place. Organizations should realize that the purchase of ERP software requires some changes to business practices in order to run smoothly. Vanilla implementations will require the most amount of BPR, while chocolate implementations (although more difficult to get up and running) will likely require less BPR in the long run.
Improved business processes may result in:
Improved customer satisfaction. Reductions in cost. Increased productivity by allocating resources to more value-added activities.
Other names of ERP before the 1900s
Inventory Management & Control Materials Requirements Planning (MRP) Materials Requirements Planning (MRP-II)
Consultants
It is often the case for organizations without much ERP implementation experience to use implementation partners such as consultants.
Discuss the evolution of information systems in an organization. How can the use of ERP systems remove information or functional silos in organizations?
Most organizations start out with basic information systems, and build from a standard platform as they grow in size and needs. As their needs and market positions change, they may find that they need an information system that can better aid their business practices. At some point they may decide to implement an ERP system from a vendor such as SAP, Peoplesoft or Oracle. When a company implements the ERP system, it eliminates the divisions or silos that naturally occur in the organization.
Global, Ethical and Security Management
Outsourcing overseas, ethical issues, and problems with system security have also attracted a lot of attention in ERP implementation.
From all the ERP components listed in the chapter, which component is most critical in the implementation process, and why?
People, including all levels of employees and management, are the ones that will use and be affected by the ERP system. It is critical that all are on board with the decisions that are made, and willing to give feedback during all stages. An ERP system cannot be successful unless the people of an organization are willing to accept the possibility of change and business reform.
Business Limitations of an ERP System
Retraining of all employees with the new system can be costly and time consuming. Change of business roles and department boundaries can create upheaval and resistance to the new system.
Key ERP Vendors
SAP(31%) Oracle (25%) Infor (TIER II 30%) Microsoft
Management is generally categorized into three levels:
Strategic, Mid-Management and Operational
Discuss the criteria for selecting ERP vendors. Which is the most important criteria and why?
The criteria to consider are what industry the ERP vendors specialize in and what sizes of organizations their software supports. Also important to consider is the reputation of the vendor, how successful their implementations have been and their outlook in terms of longevity. Other items to seriously consider are their customer support services, total cost of ownership, IT requirements for the software and the ability to integrate third-party software.
What are the critical steps of an ERP project cycle? Discuss the critical success factors.
The first critical step is to identify a project manager and subsequent teams. Then, to find a vendor that is able to deliver solutions identified by the project manager and upper management is the next step. Other important steps include establishing a project timeframe, deciding if consultants are necessary, and most importantly performing adequate ERP testing. Finally, after going live, it is essential to work closely with the consultants to solve any problems that may arise during implementation. Keeping these steps in mind will aid in a successful project implementation.
Change Management
This helps prepare for changes to how business is done. In implementing new systems, communicating, preparing, and setting expectations is as important as providing training and support.
Five Areas of Stabilization are Important
Training for end-users. Reactive support (i.e., help desk for troubleshooting). Auditing support to make sure data quality is not compromised by new system. Data fix to resolve data migration and errors revealed by audits. New features and functionalities to support the evolving needs of the organization.
(implications for management) ERP systems implementation is
a complex organizational activity. requires strong project management oversight. provide improved and added functionality for an organization. are set to proliferate globally.
Business Benefits of an ERP System
agility of the organization in responding to changes in environment for growth and maintaining market share. Information sharing helps collaboration Linking and exchanging information in real-time ... improves efficiency. Better customer service Efficiency of business processes are enhanced
A system's architecture is a:
blueprint of the actual ERP system and helps the implementation team build the ERP system.
To compete effectively, organizations have to be
customer focused. This requires cross-functional integration among the accounting, marketing and other departments of the organization.
E-business Focuses on linking a business with its external partners and stakeholders while ERP focuses on:
integrating the internal functional silos of the organization into an enterprise application
A flexible architecture is best -
it allows for scalability as needs change and grow.
Early focus of e-Business was on communication , collaboration, marketing and promotion, and E-commerce while ERP focuses:
mainly on data sharing, systems integration, business process change, and improving decision making through the access of data from a single source (Back office functions)
Going live ("Go-live") is:
one of the most critical points in a project's success.
The architecture of an ERP system influences________
the cost, maintenance, and the use of the system.
WHAT IS AN ERP SYSTEM? Enterprise Resource Planning Systems
the first generation of enterprise systems meant to integrate data and support all the major functions of organizations. ERP systems integrate various functional aspects of the organization as well as systems within the organization of its partners and suppliers.
Business process management is:
the understanding, visibility, and control of business processes.
If purchased, ERP architecture is often driven by
the vendor but other IT architectures are driven by organizational strategy and business processes.
A crucial role of ERP in business is
to better position the organization to change its business processes.
ERP Goals
to make the information flow dynamic and immediate, therefore, increasing its usefulness and value. to integrate departments and functions across an organization into a single infrastructure that serves the needs of each department.
The key to a successful implementation is:
to use a proven methodology, take it one step at a time, and begin with the planning and understanding the ERP life cycle.
