Copyright 2006 John Wiley & S ons, Inc. 1 discussions (one week from today: Be prepared to discuss (using terminology and concepts from chapter 12) the organizational structure of IT in your company? a recent IT project in your organization – its management and outcome The IT culture in your organization – the attitudes and relationships between IT and the business units – from help desk through large projects Does your organization have a CIO/CTO? If yes, is the position effective? If no, should you have one?
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Copyright 2006 John Wiley & Sons, Inc.
1
For the IT and people discussions (one week from today:
Be prepared to discuss (using terminology and concepts from chapter 12)
the organizational structure of IT in your company?
a recent IT project in your organization – its management and outcome
The IT culture in your organization – the attitudes and relationships between IT and the business units – from help desk through large projects
Does your organization have a CIO/CTO? If yes, is the position effective? If no, should you have one?
Copyright 2006 John Wiley & Sons, Inc.
2
Case analyses For subsequent cases, I will require at
least one citation to be from an academic journal
This will require detection of at least one of the key themes of the case and the use of this as a keyword
For example, the Land’s End case had as obvious underlying themes - strategic advantage through IT, mass customization
The next case (‘Failed BPR’) could have as possible themes: BPR, IT implementation failure, etc., etc., etc.
Copyright 2006 John Wiley & Sons, Inc.
3
Assignment for Wednesday, September 26th
Read ERP chapter (4) in text Be prepared to discuss any or all of the
micro-cases of success and failure Assume you and your CEO were having
lunch and (s)he let it be know (s)he was considering an ERP installation for the organization. What advise would you give? (Its best if you can make your discussion specific to your actual work organization.)
Be prepared to discuss all “managerial questions”
Copyright 2006 John Wiley & Sons, Inc.
4
ERP – Why?
Given the risks involved in ERP implementation, why have and are so many companies attempting it?
Copyright 2006 John Wiley & Sons, Inc.
5
Manager’s Guide to Making Decisions about ISPaul Gray
Chapter 4: Enterprise Requirements Planning
Slides prepared byLouis Beaubien
Providence College
Copyright 2006 John Wiley & Sons, Inc.
6
Managerial Questions
What is ERP? How will it help my business? What are its costs? What are the risks? What is ERP II and when can I
expect it?
Copyright 2006 John Wiley & Sons, Inc.
7
ERP – A Chronology
Manufacturing Resource Planning (MRP) Systems – focused on production – ca. 1975 – mainframe based
MRP II – focused on planning and production
Integration of MRP and other back office functions into a single package = ERP
Copyright 2006 John Wiley & Sons, Inc.
8
Factors Along the Path to ERP
The development of client-server architecture
The rush to replace out-dated and non-Y2K compliant systems. Many felt it would be cheaper to
replace everything than make existing software Y2K compliant!
The desire to have integrated systems within the firm – why is this desirable?
Copyright 2006 John Wiley & Sons, Inc.
9
Modular Systems ERP is the current incarnation of
“modular applications” Each module automates a traditional
back-office function All modules interact with a common
database and common inter-module transactions are designed in
Many modular systems, some far more flexible than SAP, et al. existed from the early 1980’s. Where did they go?
Copyright 2006 John Wiley & Sons, Inc.
10
How Modular Software Works
Copyright 2006 John Wiley & Sons, Inc.
11
SAP – an ERP in Profile
Products include R/2 and R/3 The largest of ERP companies in the
market 44, 500 installations Serves 10 million desks in 17,500
organizations In 120 countries
Copyright 2006 John Wiley & Sons, Inc.
12
Core Modules of SAP
Finance Sales Manufacturing Human Resources
Copyright 2006 John Wiley & Sons, Inc.
13
Other SAP Modules
Portals Supply chain Customer relationship management Product life cycle Business intelligence
Copyright 2006 John Wiley & Sons, Inc.
14
How SAP Works
Copyright 2006 John Wiley & Sons, Inc.
15
Issues with SAP
System designed in North America or Western Europe
Embodies best practices from ‘home’ country – based on ‘home’ country assumptions
Practices and assumptions may not transfer across borders (or even between companies). Discuss power-distance relationships
System like concrete – hardens over time
Copyright 2006 John Wiley & Sons, Inc.
16
Issues with SAP (2)
The book states that it is easier to modify an ERP system than an entrenched organizational culture.
Many consultants and researchers STRONGLY advise against major changes to ERP systems.
Discuss the tradeoffs and alternatives to vendor-based ERP.
Copyright 2006 John Wiley & Sons, Inc.
17
Costs of ERP
$15 million for a large firm (The above is the book’s VERY understated
figure. UNR estimates are at $45M and counting.)
On average $53,000 per user Requires two-years of implementation and
integration. (This is another under-estimation in my experience.)
Copyright 2006 John Wiley & Sons, Inc.
18
Costs of ERP (cont’d)Average Cost To Install ERP – does NOT include internal costs for training
process changes, attrition, etc.
Expenditure Amount (millions) Percentage
Hardware 1.46 13.8
Software 1.86 17.5
Internal Staff 2.46 23.2
Professional Services
4.82 45.5
Source: CIO Magazine Oct. 15, 1999
Largely consulting and parameter ‘tweaking’. These costs are
potentially ‘bottomless’.
Copyright 2006 John Wiley & Sons, Inc.
19
Benefits of ERP
Shorter order cycle time Increased productivity Lower IT costs Better cash management Reduced personnel A system that works! Over the last 8
years or so, many ERP installations have replaced legacy systems that just can’t be bandaided any longer!
Copyright 2006 John Wiley & Sons, Inc.
20
Benefits of ERP (cont’d)Expected and Actual Benefits
Benefit Expected Actual
Shorter cycle time 19% 31%
Improved productivity
24% 31%
Lower IT costs 24% 11%
Better cash management
24% 13%
Personnel reduction
43% 33%
Copyright 2006 John Wiley & Sons, Inc.
21
Experiences with ERP
From Markus and Tanis (2000) Integration – not guaranteed! Packages
The custom/package tradeoff can be a make or break decision
Best Practices – take it or leave it? Some assembly required
Integration with legacy systems and existing hardware (i.e. telecom, POS)
Copyright 2006 John Wiley & Sons, Inc.
22
Reasons to Adopt ERP
One face to the customer (via integration)
Knowing “what is possible” in terms of organizational inventory
Eliminating redundancy (and data reentry)
Consolidation
Copyright 2006 John Wiley & Sons, Inc.
23
Reasons to Adopt ERP (cont’d)
Handle growth Reduce stress on existing IT Avoid legacy systems Modernizing
Copyright 2006 John Wiley & Sons, Inc.
24
Reasons Not to Adopt
Cost – far greater than the book indicates
Loss of competitive advantage From the replacement of proprietary
process with “best practice” Resistance to change Poor cultural fit
These make asuccessful installationdubious.
Related Documents
