7 September 2013

Week 9: Business Functionalities Mismatches with ERP features

PART A: Respond to the Following Case Study.

If an organisation has business processes that do not match any commercially available ERP, should the organisation adopt an ERP?

Provide factors for and against and suggest other possible considerations that would factor in your reasoning.

1. If an organisation has business processes that do not match any commercially available ERP, should the organisation adopt an ERP? 

Every enterprise will have increasing data volume, market sales, market share, profits, and expanding their business functionalities to meet their business objectives. They need to integrate all their multi business functionalities into a single system. Some of them build their in-house system or purchase “off-the-shelf” systems (legacy system), but some of them failed to maximise their business functionality in their system. The reason is because their system is classified old-fashionable system in the market. In the same way, they eventually have to survive in the market or even some of them have to close down their business, because they could not get any competitive advantages. Recently, ERP (Enterprise Resource Planning) is the current trend in the business, which can support an organisation to overcome those difficulties by integrating all their fundamental business process functionalities. The result is an organisational can significantly increases the business productivities of all the company’s stakeholders, which are manager, employees and customers. The key argument when a particular organisation’s business process does not exactly match with any commercially available ERP is a very critical decision to make. Ultimately, the objectives of integrating process are automated, faster, real-time, secure, and centralise the business processes. The key considerations of adopting an ERP or not rely on selecting an ERP system vendor. They can observe from the business process functionalities and ERP features has alignment and ensure everything works properly. Considering the massive benefits of having an ERP within the organisation is very essential. Other considerations are:

  1. Redesign the business processes in advanced to obtain competitive advantages.
  2. An organisation can customise the ERP features using “vanilla” implementation approach to adapt the business functionalities to meet the business objectives.
  3. Top-level management uses change management component in their clearly delivered communication plan to meet their business expectation.
  4. Top-level management uses OPM3 process, which assist an knowledge about current enterprise and experience in implementation; measure the implementation experience using ERP system in the company; and support the level of implementation capabilities; and minimise the risk management.
2. Factors for and against considered in the ERP implementation.

Adopting ERP regardless if it matches the organisation’s business process at certain areas is beneficial and makes the business more profitable like, making employees happy by being paid on time, smart decisions from executive and managerial level through statistics and reports, and even making the life of stakeholders and customer easier in a centralised process that is provided by ERP. In addition to that, it provides visibility into all important part and aspect of the business process across different departments within the organisation.

Although there are some disadvantages in jumping into a decision to actually adopt ERP regardless if it meets the exact needs of the organisation. The obvious and initial factor that the business will see is the “cost”. ERP customisation, planning, configuration, testing, implementation, etc can be a serious tedious job and demands serious resources from the organisation. Deployment make take several years, cost savings and payback may not be realised pretty soon right after the ERP implementation.

 3, suggest other possible considerations that would factor in your reasoning.

Other possible factor to consider in this reasoning is looking for a flexible vendor or system that can adopt phase by phase or gradual implementation. This means that although an ERP is a long process to be taken, any vendor or system that can implement the whole ERP in a modular basis. The possibility to integrate one module after the other that really caters the initial needs of the business is the most significant factor to be considered.

PART B: Post an entry to your blog that answers the following questions:

1. What was the most difficult assessment item you completed so far in COIT20230 this term?

  • Assignment 2 (Case Study)

2. What was difficult about it and how would you suggest it could be improved?

  • Insufficient clear information in advanced about SAP and legacy system.
  • Too much effort to research time to get some ideas.

Advice for improvement:

  • Provide some articles for beyond research.
  • Give the requirement not as much references as this term.

3. If you could provide three (3) pieces of advice to a student who will be doing this course next term what would they be?

  • Organise their study plan start from the beginning of the term what will they can accomplish the deadline.
  • Do research early and attend all the classes.
  • Try to meet the studies objection weekly basis.

4. How will you be able to use this knowledge/these skills in your future career?

This course is useful for me in the future career by bringing this knowledge. I understand how to analyse the issues in the company by involving all the stakeholders and existing resources. I understand how to create a successful project, by analysing a critical (key) success factors (CSF). There is the way to maximise a business performance by utilising ERP systems, however, we have to consider when we are selecting an ERP vendor with its features, its support systems for the organisation.

7 September 2013

Week 8: The Skills requirements for an ERP project Manager

This week I am going to discuss about one of the key success factors to determine an ERP implementation project is the role of project manager itself. A project can be successful or not depends on a Project Manager. In this area, I limit my discussion into 3 main points, such as

  1. An ERP project manager must have what kinds of skills for running and achieving the objectives of the project management.
  2. The correlation those skills of a competent Project Manager should include functional and/or technical knowledge of the product.
  3. Justification perspectives of those correlation

A person, who wants to be a competent in a project management, must have some skills. These skills are required to obtain managing a successful project, such as:

1. Organisation skills.

In this area, a successful project manager has to be well-organised multi projects or some tasks (multi-tasking skills). He/she has to be able to monitor the project in daily basis. It means he/she has to be able to do more than one duty in the same time and highly organised to perform the project productivities in good quality. Roche (2010) & Chapman (2013 supports that organisation skills need some requirement will determine a project manager successfully finishing a project or not, such as:

  1. Work out exactly based on the project requirement.
  2. Highly able to make decision process effectively, efficiently, and productively in the right time.
  3. Concern on highly organised for stakeholders (project team, staffing, and management, human resources development and training), product (materials, storage, manufacturing, distribution, production, and logistics); and services (customer services and partners).
  4. Well organise in finance, procurement, administration (legal and professionals), acquisition, and deprivation.
  5. Well organised in controlling the budget and minimising the risk in the project.
  6. Able to meet the project schedule and able to meet the project scope (one of the most critical in the project).
  7. Able to monitor the project negotiation, sales volume; marketing activities; project quality; employees’ health and safety; technical; research and development by using suitable project management tools; and new business expansion.
  8. Highly organised the company’s assets (plant, building, premises, vehicles, and equipment).
  9. Able to organise the changes in the project scope.
  10. Able to build and develop teamwork to overcome the arising issues.
  11. Able to solve the issues.
  12. Self-discipline.
  13. Able to learn in a fast pace environment.
  14. Able to implement team member.
  15. Able to respect the project team.

 2. Leadership skills.

If a person is able to perform his/her skills on my first point, he/she as a project manager will be easily to lead stakeholders in the project. Additionally, a successful project manager is able to identify the outcomes of the project.

3. Communication skills.

A successful project manager must able to communicate effectively and consistently to assure all the stakeholders can understand the information well and meet the stakeholders’ expectation through PLC (Project Life Cycle).

References

Chapman, A. 2013, project management: project management, tools, process, plans and project planning tips, viewed 11th September 2013, http://www.businessballs.com/project.htm.

Roche, R. 2010, So you’ve been given a new project – now what? Six essential project management skills, viewed 11th September 2013,  http://cit.edu.au/partnerships/industry_connection/2010_june/six_essential_project_management_skills.

7 September 2013

Week 7: ERP Issues at the delivered report

PART A: Respond to the Following Case Study.

One of key problems with ERPs is their minimal level of delivered reports.

  1. When should this become apparent and what are some options organisations have to address this?
  2. What impacts do these options have?
  3. What reason might there be for so few delivered reports?

[Note:  You may need to do so external research to understand this problem and answer these questions]

When should this become apparent and what are some options organisations have to address this?

Every organisation sets their strategic plan in the business objectives. A growing company will have a growth data volume. They will face some challenges. First, they will concern the growing data volume, including market share, sales volume, profits, ROI (Return of Investment), dividends, and company cash flow. An organisation will use all those measurement for their business performance (Donovan, n.d.). For instance, Turban & Volonino (2010, p. 456) describe, “Some retailers, like Wall-Mart, have been at the forefront of using BI and managing data effectively”. Second, they will be encouraged to achieve the level of readiness of their plan into Go-Live (Going Live) by checking some task lists that they have done. Moreover, they will face 2 options for their readiness checkpoints. First, they will be missing their steps of business. Second, their Going Live will not run as expected before. Lastly, they have to reverse back to their legacy system in the worst condition.

Furthermore, they need to specify their business process until they ready to Go-Live and need to focus on the major issues prior to going live through Go-Live readiness process measurements, which involves enterprise infrastructure, business development, system configuration, data conversion, system testing prior to implement ERP software, management training, communication, centralized instructions, reporting, and stakeholders. Stakeholder collaborations are required together and create a report for review. An organisation needs to document for reviewing every activities in Go-Live readiness and they can use these documents for an effective communication between them and their project management team. In addition, they need to consider that Go-Live readiness not only will consume a lot of time, but also will make their most staff and users stressful. Besides, all team members need to discuss, to review and to verify all the input in the Go-Live project readiness. Prior to going Live (Go-Live), they need to review it for about 1.5 months and at least between 7-14 days before they launch the Go-Live project readiness. Besides, they need to prepare another date for the alternative plan for this project. A PMO (Project Management Officer) needs to document this activity in a detailed report in executive summary, which is important for top-level management. The reasons of valuable detailed report in reviewing the project status are:

  1. Top-level management can monitor the readiness project status.
  2. Authorisation for senior management to inquire some objections based on beyond next stages.
  3. Giving a PMO another opportunities to discuss with senior management the successes and issues with the project (Motiwalla & Thompson, 2009).

A project manager often create a table for reviewing Go-Live readiness and status report, which demonstrate the key status activities to be worked with prioritize. The critical success factors in the Go-Live readiness are PMO and team as main actors; the series of gathering and discussion of the project status; advanced assessment on the readiness implementation. Additionally, Stabilisation phase is the difficult stage of the implementation, because it will often arise some issues and run some activities, like complexity system customisation, ERP stabilisation issues, Business Process Reengineering, reconciliation time consuming in validating the processes between legacy system and new ERP systems. Motiwalla & Thompson (2009) pointed out that multiple aspects of the implementation process must be documented during the Definition and Build phases from 3 different perspectives, such as project management, operational, and IT.

The possible options for addressing those issues are:

  1. Training strategy used for Go-Live.
  2. Go-Live Support System.
  3. Data validation for detail reports development.
  4. Data Correction
  5. Managing and addressing the new features of ERP evolution.
  6. Create documentation of detail reports. Ciecierski (2011) mentioned that there are some major delivery models for ERP, such as On-Premise; Hosted; Public and Private Cloud; and Hybrid.

So, it will impact several factors from this option, such as:

  1. A PMO must focus on the combination between issues, checklists, and activities to be ready; and prioritise on the closer Go-Live date.
  2. Understandable of a knowledge transfer process will perform ERP implementation to be a successful and feasibilities.

What reason might there be for so few delivered reports?

  1. Insufficient training.
  2. Insufficient knowledge because a staff leaves the organisation.
  3. High learning curve for new users (Motiwalla & Thompson, 2009).
  4. Loss of knowledge of system functionalities.
  5. Misuse of the system (Motiwalla & Thompson, 2009).

REFERENCES

Ciercierski, A. 2011,  ‘5 Types of ERP Software Delivery Models To Consider Before You Buy’, viewed 11th September 2013, http://www.erpsoftwareblog.com/2011/01/5-types-of-erp-software-delivery-models-to-consider-before-you-buy/.

Donovan, M. n.d., Performance measurement: Connecting strategy, operations and actions, viewed 10th Sept 2013, http://www.reliableplant.com/Read/140/performance-measurement

Motiwalla, L.F. & Thompson, J. 2009, Enterprise System for Management, Pearson Education Inc., Upper Saddle River, New Jersey.

Turban, E. & Volonino, L. 2010, Information Technology for Management: Improving Performance in the Digital Economy, 7th edn., *John Wiley & Sons Inc., Hoboken.

PART B: Examine Assessment Item 2

Following on from the previous two weeks, provide a rough draft of your introduction and your executive summary.

Introduction

I will describe about the background of the ERP implementation development, a brief about the arising issues in Millicent Home building construction enterprise system, and common difficulties in implementing ERP in the huge global enterprises.

Executive Summary

I will summarise from the whole report based on the Millicent Homes enterprises. It includes a brief about the ERP implementation system and its implementation at MH system; ERP life cycle; the critical success factor; the cause of failure ERP implementation based on assessing the Case Study of Millicent Homes enterprise; and giving some recommendation either continuing ERP implementation system or reverse back to their legacy system.

1 September 2013

Week 6: Investigation of ES adoption

PART A: Response to the following case study.

Stuff-Up.Org (fictitious organisation at the time or writing) has an ailing set of in-house developed legacy systems.  It has been decided that the IT department will be tasked to investigate the possibility of adopting an ES.   If they recommend ES adoption, then it has also been decided that they will be tasked with evaluating products and recommending a product to the CEO.

  1. What might be wrong with this situation?
  2. What problems do you see arising?

1. Investigate from current situation.

Every enterprise has many data in their business process functionalities. In this case, Stuff-Up organisation has currently developed own in-house legacy system. In the same way, they have ailing set of their system. Senior management asked IT department to investigate their current situation. If their own built-in system cannot meet beyond their business objectives and cannot get any competitive edge in the market, they need to consider adopting new ERP systems. They need to abandon their legacy system because if at the stage of budgeting, they define poor scope, they will run over cost (Attalla, Hegazy & Elbeltagi, 2004). Poon & Yu (2010, p. 1020) argue that “Some firms whose time and budget are less constrained may prefer to perform BPR concurrently with ERP adoption”. For anticipating this situation, IT department need some considerations about ERP procurement, such as:

1. Observing and identifying ERP vendor which matches with organisation’s business objectives.

IT Department needs to create a checklist of ERP vendors, who meet the requirement of business objectives during ERP selection, such as:

a.    Understand and identify their size of the whole enterprise and their business complexities.

The size of an organisation will determine which ERP vendor has similarities with them. Every Vendor has own market target. For instance, SAP and PeopleSoft have ERP market target for a complex organisation, yet Great Plains (former of Microsoft Dynamic) targets to a small enterprise. Identifying the total size of the enterprise will assist an organisation to research the features offered by ERP vendors.

Those activities, which are identifying and researching ERP vendor, will assist an organisation in calculating TCO (Total Cost of Ownership). This is important before investing their budget for an ERP vendor.

b.    Identify some IT infrastructure (hardware and software) for support system.

Some ERP features work on specific database in the specific platform and some ERP add-on packages. ERP vendor needs to demonstrate by installing their prototype software into the current enterprise’s system. It can assist both ERP vendor and an organisation to resolve the important issues prior to continue to next ERP implementation phase. An organisation will have long-term relationship with ERP vendor for beyond upgrading or producing a new version of the software concerning to the business requirements.

2.    Determining the needs and requirement either continuing legacy system (current system) or transforming to ERP system.

      2. a. User experience.

b. Financial impacts.        An organisation expects their revenue growths from ERP system procurement.

            c. Implementation issues and support system (Motiwalla & Thompson, 2009).

            d. Understand Enterprise System Architecture need to be documented in the business direction.

            e. Recent technology in the organisation.

                    An organisation needs to understand the impact of migrating new technology regarding the rapid technology development.

             f. Release strategy (Motiwalla & Thompson, 2009).

                    An organisation needs to decide the time release and upgrading for the system and its features; and needs to calculate the cost.

             g. Training staffs for system development and maintenance.

3.    Create Request for Bids (RFB, as known as Request for Proposal, or RFP).

The process of bidding is required for an organisation. It is useful for both ERP vendor and the enterprise because they can obtain the software saving after it has finish installed; and more deeply understanding of ERP features and support system from the ERP vendor.

4. Assess Total Cost of Ownership (TCO).

The most difficult in the consideration is to develop and calculate the TCO, or the total cost in the system implementation, maintenance, and upgrades. Fryling (2010) argues that many organisations fall down to identify the TCO in the long-term and can affect in the implementing ERP system.

2.  Arise from Possible Issue.

The role player in the investigating of the right system requirements is the senior management in the organisation. The possible issue may arise is negotiation stages. This stage involves management negotiates with the ERP Vendor. Management must consider that ERP vendor trains their employees to be able to sell their products. Furthermore, this stage consumes a lot of time, because management needs to allocate for evaluating the system, researching a complete demonstration from the vendor, communicating to other system, discussing with the vendor for better performance in the future, and beyond scheduling the direction for better purchasing ERP system. Some organisation got experience if they do not utilise consultants and/or SMEs (Subject Matter Experts), their ERP project has over budget.

References

Attalla, M. M.ASCE. Hegazy, T. M.ASCE. & Elbeltagi, E. M.ASCE. 2004, ‘In-House Delivery of Multiple-Small Reconstruction Projects’, JOURNAL OF MANAGEMENT IN ENGINEERING, vol. 20, no. 1, pp. 25–31.

Fryling, Meg. 2010, ‘Estimating the Impact of Enterprise Resource Planning Project Management Decisions on Post-Implementation Maintenance Costs: A Case Study Using Simulation Modelling’, Enterprise Information Systems, vol. 4, no. 4, pp. 391–421.

Motiwalla, L.F. & Thompson, J. 2009, Enterprise systems for management, Pearson Education, Inc., Upper Saddle River, New Jersey.

Poon, P.L. & Yu, Y.T. 2010, ‘Investigating ERP systems procurement practice: Hong Kong and Australian experiences’, Information and Software Technology, vol. 52, pp. 1011–1022.

PART B: Examine assessment item 2.

Following on from the previous week, provide a rough skeleton of what you are going to put in your conclusions.

I am going to put my idea that MH should use Best of breed regarding to experience on aroused issue because their some business functionality does not provided by ERP vendor.

14 August 2013

Week 5 : Don’t Customise & Ass2 Skeleton

PART A.

Many experienced ERP implementers will say there are two rules you should follow when implementing these systems:

1. Do not customise your ERP.

2. See Rule 1.

Why do you think this is?

What are the risks of customisation?

What does a need to customise say about the willingness or an organisation to effect BPR?

ERP installation involves some factors, such as hardware, human resources and software. Hardware consists of C/S (Client/Server), and Peripheral. Human resources involve all cross-business functionality workers, such as project manager, ERP implementation team, and development team. Lastly, Software contains Operating System; which is a platform for running any software, including an ERP application; Database Management System (DBMS); and Application software, like Oracle, Microsoft Dynamic, SAP, and many more. There is none of the application software made perfectly in their system, including ERP software. It means an ERP system needs to add some missing functionality during implementation from third parties, which is called add-on (as known as addons). Some of the third parties don’t offer it; however, it shares the data into the ERP system. Some of third parties may not be developed by the ERP vendor itself. As a result, it may create some issues of the addons. An ERP vendors need to build co-operation with the third party vendor to overcome the issues.

A successful organisation will implicate a proven methodology in selecting an ERP implementation. The writer will give a best practice in implementing ERP system. He already gave a brief description about selecting implementation in their plan last week. The best solution for an organisation is using Vanilla implementation, because they do not need to spend much money because they will be given from ERP vendors in its functionality to cover simplicity of their business processes. Kimberling (2009, via Panorama-consulting.com) reported that the effectiveness using Vanilla Implementation in the organisation. (See Fig 1).

ERP Vendors customisation

Fig 1. Customisation average rate using ERP Vendors.

(Kimberling, 2009, http://panorama-consulting.com/erp-software-customization-the-ultimate-sin-of-enterprise-software/)

Many professionals in ERP suggest that they should not customize their ERP system. Before the organisation customizes their ERP software, they need to scrutinize several factors. Motiwalla & Thompson (2009) mention that there are 7 factors in considering it:

  1. An organisation runs relatively modest business model which are not unique, they should consider implementing using “Vanilla”.
  2. An organisation, which does not have any experience, they should examine implementing “Vanilla”.
  3. An organisation, which has many branches run the same system in single system, should have a cost-control factor in implementing “Vanilla”.
  4. Leveraging a “Vanilla” implementation will give them a competitive advantage.

What are the risks of customisation?

The writer stands in the same sides with other experienced ERP implementers, which customizing an ERP will be too risky. There is some reasons.

1.    Upgrade

Developer team need to analyse during system modification. They need more time to customize, validate, and upgrade the old system.  The upgrading system needs long-term periods, because it cannot one-time upgrading the system.

Additionally, if the customization is outrageous from the implementation plan, it can be transformed to re-implementation. It is most expensive.

2.    Human resources.

Either too much coding or no-coding testing during customisation will create incompatibility in the new system. It means it will create some bugs or system issues.

3.    Lack of experienced, consultants & experts in the customisation the systems can create difficulties for organisation. On the other hand, if the organisation has experience in customisation, it will have a successful impact.

4.    Reversion.

Vjeko (2009) argues that “The more you customise, the more regression testing you have to do, and what consultant don’t find, the end users will, but after Go-Live (Going LIVE).

What does a need to customise say about the willingness or an organisation to effect BPR?

  1. Assess the existing system.
  2. Analyse design system in the new system.
  3. Define a clear Business Process Reengineering limitation.
  4. Track a some particular activities in the re-engineering plan.
  5. Use Vanilla Implementation to lessen the customisation.
  6. Implement the new system.

REFERENCES

Harris, R 2000, “Customization versus Standardization: Striking a balance in ERP Software”, Machine design, pp. 564–569.

 

Kimberling, E. 2009,  ERP Software Customization: The Ultimate Sin of Enterprise Software?, viewed 15th Ausgust 2013, http://panorama-consulting.com/erp-software-customization-the-ultimate-sin-of-enterprise-software/.

Motiwalla, L.F. & Thompson, J. 2009, Enterprise Systems for Management, Upper Saddle River, New Jersey.

Vjeko, 2009, Top 7 reasons why to avoid (much) customization, viewed 15 August 2013, http://vjeko.com/blog/top-7-reasons-why-to-avoid-much-customization.

PART B.

Examine assessment item 2. The purpose of this assignment is to provide a report responding to a case study. Provide a rough skeleton (dot point form if you wish) of the content and structure of the main body of your report. You should make clear what the problem is and also outline what the options are.

Assessment item 2 (Term 2 – 2013) examines from the case study about “Difficulties in Enterprise System (ES) implementation: The case of Millicent Home (MH)”. It examines the causes of ERP implementation failure.

The structures of the main report are:

1. Executive Summary

  • Describe a brief summary of some major findings of an ES implementation in MH, including argument about continuing using SAP or disregards the SAP implementation.
  • Describe recommendation and conclusion.

2. Introduction

a.  Background.

o   A brief ES implementation issue in MH.

o   Describe the timeline of the issues, the important of ES implementation, and factors of people who get involved.

b.  Aim / Objectives.

o   The objectives of report achievement.

c. Scope.

o   The coverage of the ideas in the report.

3. Project Analysis

  • Define and explain the either functional reasons or technical reasons why fail in implementing an ERP system.
  • Analyse which result in the crucial factors in failure of ERP implementation.
  • Analyse some issues befall the existing ERP system.
  • Assess any party involved in responding the issues.
  • Mention the effect of successful in change management.

4. Conclusion

5. Recommendation

Give some suggestion to perform better using ERP system and work effectively on it.

6. References

Using a standard Harvard Referencing style

7. Appendices

The additional information related to the Project Analysis that may include:

a. Data.

b. Chart.

c. Diagram.

d. Table.

e. Maps.

f.  Some Questionnaires or its answer.

g. Specification.

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13 August 2013

Week 4 : ERP’s Maintenance Overhead

ERPs usually require frequent application of vendor software patches in order to address minor security/functionality issues and bugs.  Not applying these patches can result in the vendor withdrawing support for the ERP.  This process occurs in Operation stage.  Moreover larger updates, requiring mini ERP implementation projects, can occur as frequently as every three years.

  1. What are the implications for organisations adopting an ERP?
  2. Do you think the text captured the complexity of this?
  3. Why/Why not?

The ERP vendor uses various techniques in approaching ERP development, which is called traditional ERP life cycle (as known as ERPLC or Rapid ERPLC). It is as same as Traditional Software Life Cycle. An organisation needs to consider some steps before changing their system (which called Change management), such as:

  1. Define a scope and initialization.
    • At this stage, the management need to make some clear objectives in their implementation plan to their SMEs (Subject Matter Experts). It means they provide a clear knowledge about the business regulation. Additionally, there are critical activities in this stage, such as giving a clear input about UI (User Interface); and assessing, reviewing and choosing a suitable ERP vendor from some option in their plan.
  2. Analysis design.
    • The main activities in this stage are:
      1. Deciding a ERP vendors, consultant and SMEs.
      2. Portrayal business processes in the gap analysis for a long term.
      3. Customisation on ERP.
      4. Preparing some trainings and transformations.
      5. Installing sandbox of ERP system into local enterprise’s server.
  3. Acquisition and Development Stage.
    • After an organisation ensures the new ERP works properly and meet their system requirements, they need to invest for their system development. Additionally, they need to create some configuration, authorisation, and modification in their regulation.
  4. Implementation. 
    • The main activities in this stage are:
      • 01. Implement stage
    • Every organisation uses one of four fundamental system conversion approaches, such as:
      1. Phased
      2. Pilot
      3. Parallel
      4. Big-bang (direct cutover).
    • The best practice in implementing system conversion is Big-bang, because it makes organisation cost saving and assists in overcoming directly and clearly to the issue. It will create the highest risk when applying Big-bang approach, but it is the most effective from others.
  5. Operation.
    • The management launches the new software; installs the software patches; upgrade from old to new system; and governs ERP vendor agreement. Additionally, a change management will provide training program for their organisation.  

    

One of division in an organisation, who modifies, supervises, and performs ErpLC, is Change Management (CM). see Fig 1. A failure of applying ERP software patches will rise when a CM does not have sufficient understanding on how to change the processes need, customise the ERP implementation, and deliver their business plans to the end-users. For those reason, a critical success factor for implementing an ERPLC, a CM needs some consultants and SMEs from the ERP software vendor. Wong & Tein (2003) argued that “the skills and competence of the project team are also a key factor influencing the success of ERP implementation”. Generally, there is an organisation’s objective of leveraging ERP system. They expect that they can implement ERP system in the long-term as their long-term strategies and perspectives.

ErpLC

Fig 1. CM takes role in the Traditional ErpLC.

What are the implications for organisations adopting an ERP? 

As the writer explained before, every ERP vendor and software consultants provide variety methodology of ERP implementation for an organisation. If the organisation had some mistake in choosing ERP vendor, it will make more costly, more time consuming, waste some recent resources and will not meet the deadlines in the business processes. On the other hand, a successful organisation may consider one of the main choices plan before adopting a new ERP system implementation. The writer will give some guidelines of best practice of choosing the implementation plan :

  1. Comprehensive                →the most expensive, because it involves a high-level business processes to perform full functionality in the system.
  2. Vanilla implementation   → cost saving, because it uses the bottom line of ERP features to meet the simplicity of the organisation’s business processes.
  3. Middle-of-the-road            → in the middle between comprehensive and vanilla implementation.

There are some positive implications in the  implementing an ERP:

  1. Senior management has an intense commitment :
    • Senior management involved in the project to determine, monitor, and give responsible the business processes through adopting ERP system to the ITD (IT Department). Besides, they will deliver their vision (commitment) to all multi-functional level.
  2. A management has potential and experienced in project management :
    • A successful organisation will inform to all cross-functionality about their business plan in their business regulation, including a plan about implementing from their existing business systems into new systems by utilising ERP software. A successful ERP system is very crucial for an organisation. If the manager in an organisation recognised their system is fail, their business processes could have delayed. On the contrary, if they provide their definitions; their objectives; some guidelines clearly during process and resource plan development; and competent leadership training to all team members in their project, their business processes will run very effectively and efficiently
  3. Minimizing Business Process Re-engineering (BPR) and system customisations.
    • A process of Business re-engineering expected by organizations to meet the functionality in the ERP system. Customization an ERP software can make a system become  vulnerable and will be difficult for organisation to overcome it. The writer will give some guidelines in his blog in week 5 more deeply, about why customization in ERP should be avoided
  4. A management maintains a training program and concerns at the CM :
    • Jarrar, Al-Mudimigh, and Zairi (2010, p.6) argue that “Change management has to be structured within an overall Business Process Management methodology to achieve its goals.

Do you think the text captured the complexity of this? Why/Why not?

The writer discuss this week about the package of ERP software which contains vendor software patches to handle some bugs and issues in less security/functionality. Additionally, it often happens, especially in mini ERP implementation project, during Operation stage. That patches does not work properly at the same software. It can frequently occur every three years. According to writer’s objectives, the measurement of the complexity of an ERP implementation project can be assess using several approaches:

  1. Look at the type of ERP infrastructure. If the organisation uses Three-tier infrastructure (which works independently at single layer), especially three-tier client-server model, it produces the complex business processing on different computer. As a result, those infrastructures have some drawbacks, such as economics, and complexity during developing an environment.
  2. Assess from the ERP software vendor. Each ERP vendor has their market targeted. Some ERP software vendor can handle the complexity of an organisation, might be creates some difficulties to others. Scavo (2010) shows that two big ERP vendors, like SAP and Oracle, they can perform and support the most complex system, business objectives, a massive amount of functionality in various enterprises, and deal with the regional regulation. Additionally, he asserted that “those vendors are highly configurable”.
  3. Can be assessed from the price of the ERP software. Every implementation activity will increase the organisation’s expenses.

References

European Centre for Best Practice Management, viewed 15th August 2013, http://zairi.com/wp…/ERP-Implementation-Critical-Success-Factors-–.pdf‎.

Jarrar, Y.F. Dr. Al-Mudimigh, A. & Zairi, M. Prof. 2010, “ERP Implementation Critcal Success Factors – The Role And Impact Of Business Process Management”,

Motiwalla, L.F. & Thompson, J. 2009, Enterprise Systems for Management, Upper Saddle River, New Jersey.

Rabaa’i, A.A. 2009, “Identifying critical success factors of ERP Systems at the higher education sector”. ISIICT 2009 : Third International Symposium on Innovation in Information & Communication Technology, pp. 133–147.

Scavo, F. 2010, Factors that affect ERP implementation cost, viewed 15th August 2013, http://fscavo.blogspot.com.au/2010/08/factors-that-affect-erp-implementation.html.

Wong, B. & Tein, D 2003, “Critical Success Factors for ERP projects”, viewed 14th August 2013, http://cms.3rdgen.info/3rdgen_sites/107/resource/orwongandtein.pdf.

31 July 2013

Week 3 : Enterprise Systems Architecture

­­­­ERPs are often touted as providing ‘best practice’ in functionality and business processes.  However, many organisations have their own business processes and often do not want to change.

  1. If an organisation is unwilling to change its business processes, can it gain any value from an ERP?
  2. How could this be achieved?
  3. What are the risks?

If an organisation is unwilling to change its business processes, can it gain any value from an ERP?

As explained about leveraging an Enterprise Resource Planning systems before, an ERP can perform an enterprise’s systems more integrated, and more organized. A successful company will invest an ERP system infrastructure to integrate from their old system together to their new system (see Fig 1). Leveraging an ERP module can assist to integrate some functionality in the organisation’s system, such as manufacturing, Supply Chain Management, project management, and financial management.

ESA model

Fig 1. The model of Enterprise System Infrastructure.

It provides all system functionality and shareable data integration to the users through ERP modules. However, building an ERP system infrastructure will challenge a small organisation when they are expanding their organisation become large and global due it is costly and speculative. The solution for a small organisation is they need to choose a proper ERP vendor for supporting their major business functional. ERP vendors offer variety functionality, which suitable for different unique variety industries needs. Business Software (2013) mentioned that an organisation can consider from top 20 ERP vendors for their system. (see Table 1).

Table 1 : Top 20 ERP Vendors (Business Software, 2013)

No.

ERP software brand

ERP vendor

1.

  01. Aptean Aptean Intuitive ERP

2.

  02. Friedman Friedman Frontier ERP

3.

  03. EPICOR Epicor ERP

4.

  04. PlexOL Plex Systems Plex Online

5.

  MS-Dynamics-Logo Microsoft Dynamics GP

6.

  05. Netsuite Netsuites ERP

7.

  06. Intacct Intacct Accounting

8.

  07. Syspro Syspro

9.

  08. Sage Software Sage ERP X3

10.

  09. GlobalShop Global Shop Solutions One-System ERP

11.

  10. IFS IFS Applications

12.

  20. Unit 4 Unit4 Agresso

13.

  11. SAP SAP ERP

14.

  12. Kenandy Kenandy Social ERP

15.

  13. Accustica Acumatica Financial Management Suite

16.

  14. IQMS IQMS EnterpriseIQ Manufacturing ERP

17.

  15. Pronto Pronto Xi

18.

  16. oracle-peoplesoft Oracle E-Business Suite

19.

  17. Infor Infor LN

20.

  18. Apptricity Apptricity eProcurement

Moreover, an ERP system can give an enterprise some benefits because it provides basic features to meet the organisation needs. As a result, an organisation can meet their challenges in the competitive market.

There are many benefits for implementing ERP systems, such as:

  1. System and data integration in their information systems. It means it ease to use the information and services access.
  2. Coordination cross-functionality support,
  3. Maintenance uniformities.
  4. Real-time information business processes consistently.
  5. Low cost.
  6. “High performance with a limited number of workstation”. (Motiwalla & Thompson 2009, p. 71)
  7. Productivity improvement.
  8. Supply Chain Management (SCM) integration.
  9. Business process re-engineering. (Sumner, 2005)
  10. ROI (Return of Investment).
  11. Others.

There are some major reasons ERP infrastructure can be applicable to a small organisation, such as:

  1. Flexible (agility performance, less cost and less time consuming),
  2. Scalable,
  3. Reliable (accurate on the information),
  4. Less maintainable,
  5. Can be reusable,
  6. Secure.

An organisation has a critical decision for implementing an ERP system Architecture (ERP infrastructure). Early migration to ERP system implementation can make an organisation accomplishes competitive advantages more rapidly than their competitors. Albeit an enterprise does not enable ERP system, they may still recover negative aspects by themselves.

How could this be achieved?

Best practice the implementation of an ERP system need to consider several factors, such as

  1. Senior management in an organisation need to decide the objectives and the aim of their business.
  2. They need to determine suitable ERP vendors by providing several experts who have knowledgeable with it and its technical issues.
  3. When the old system will transformed into the ERP systems, the organisation needs to organise the business process, train, re-allocate a particular resources, and support their change management. Lozinsky (1998) argued that organising some a new system training for some professionals need 6 months to a year of training. When implementing an ERP system, they need to place highly consultant to overcome any issues from the ERP vendor. It means they expect from the training professionals will be able to mastering the techniques, implement new system project, accomplish its objectives and can meet their employer needs and their ROI expectation through the project.
  4. Organise leadership workshop for their professionals in part of their commitments.
  5. They need to ensure the best time in their new ERP system implementation plan, because it will affect the entire department in the organisation structural.
  6. Ultimately, ensure the new system can help an organisation develop their blueprint properly with their early budget for investment expectation.

What are the risks?

A small organisation, which is able to adapt the global e-commerce and uses a suitable ERP system, can compete and survive in the competitive market. Besides, they can recognise their increasing potential profits through ERP implementation.

Maholtra & Temponi (2010) argue that the most typical risks for small organisation in the ERP system implementation are

    1. Small business location.
    2. Realities of small business, including tangible and intangible cost.
    3. Company’s niche and management.

The writer observed the “best practice” through Course Management Systems (CMS) case study in the CQUniversity system. CQUniversity (as known as CQU or Central Queensland University) is a dynamic and multi regional institution in Australia. It firstly established in Rockhampton, Queensland, Australia, which is the main campus of CQU, which has totally 13 campuses. They grow rapidly since 1990. The data showed that the amount of student population in CQU has been increasing significantly about 40% in 121 countries. It gives a big impact for a complexity in teaching coordination and material teaching delivery.

They have adapted to divergent the organisation structural by leveraging a new enterprise CMS infrastructure (PeopleSoft). It consists of education support system (EduSS), communication tools (such as student online forum), student assessment, material delivery, and organisational activities. Top-level management and decision level management has to understand the need of CMS EduSS development and implementation. According to the data that has been research by Luck, et.al. (2004) showed that CMS ERP gives challenges for CQUniversity about assurance for non-academic those outside one’s discipline; conflation of academic, design and technical issues; and the survival if competing systems. This institution has some difficulties, such as the relationship between ERP system and subcultures; budgetary constraints and political pressures in their strategic transformation to achieve the challenges.

References

Business Software 2013, Top 20 ERP Software Report, Comparison of the Leading ERP software Vendors, Business Software, San Mateo, CA. (http://www.business-software.com/BestERP‎)

Luck, J. Jones, D. McConachie, J. & Danaher, PA. 2004, “Challenging enterprises and subcultures: Interrogating ‘best practice’ in Central Queensland University’s course management systems”, Studies in Learning, Evaluation Innovation and Development, vol. 1, no. 2, pp. 19–31.

Lozinsky, S 1998, enterprise-wide software solution : Integration Strategies and Practices, Addison-Wesley Longman, Inc., Massachusetts.

Malhotra, R. & Temponi, C. 2010, “Critical decision for ERP integration: Small business issues, International Journal of Information Management, vol. 30, p. 28–37.

Sumner, M. 2005, Enterprise Resource Planning, Pearson Education, Inc., Upper Saddle River, New Jersey.

15 July 2013

Week 2 : Shadow Systems

Shadow systems are frequently used as a justification for the implementation of ERPs.  Shadow systems are often, but not always, reflective of practice and data storage needs in particular functional silos.  Yet oddly, the implementation of an ERP doesn’t always eliminate these systems – sometimes, the number of them increases.  Suggest possible causes.

  1. What threat do these systems pose to integration?
  2. Who or what else might be threatened by the existence of these systems?

What is Shadow System?

In the past about 5 decades, every department has their own system, which is called functional silos. The system is not integrated with each other cross-departments. The examples of functional silos :

  1. Human Resource (a.k.a HR Department or HRD) uses HR software,
  2. Finance Department (FD) uses Accounting software and finance software,
  3. Sales Department uses Sales software (e.g POS or Point of Sale).
  4. Administration Department uses administration software.
  5. And many more which depend on the scale of an organisation. 😀

This situation will create system system chaos in the business process in the organisation. Allen Square, Mayor Mitch Landrieu IT Chief (n.d., stated in Rainey, 2013) emphasized that “The current infrastructure is difficult to use, expensive to maintain, makes data access difficult, suffers from data inconsistency, and promotes the use of shadow systems due to a lack of fundamental integration.”

Shadow systems is a main information service to support some business processes. It can be any applications, which is not created by IT Department. Every software vendors; including ERP software vendors; are competing to offer their features for different business purposes in their application software, such as administration software, marketing software, HR (Human Resource) software, manufacturing, financial, and others.

Moreover, Enterprise Resource Planning (ERP) systems will replace all the single application software by integrating business processes (functionality) interdepartmental in an organization (see Fig. 1). The leveraging the ERP systems will give some benefits for business processes.

First, ERP system will make an organization’s business processes more simpler, more effective, more efficiently, more flexible and save their expenses to buy a lot of software for every department. It means the organisation can minimize the deficiencies of formal systems. A successful organisation, who implements it, will create a better B2B (Business to Business) environment (SCM system, as known as Supply Chain Management system). Those kind of organisation can survive in the competitive global market. Ulrich (2006), who is a President, and Founder of Tactical Strategy Group, Inc., and a Senior Consultant of Cutter Consortium; demonstrates through the survey from several respondents that the most off-the-shelf application software used in the organization is the ERP software. The following software that’s used by them are HRM (Human Resource Management), CRM (Customer Relationship Management), SCM, and Commercial off-the-shelf software (COTS).

Second, shadow system can advocate an ERP system in some elements in the academic organisations. Moreover, shadow systems can be any applications, such as :

  1. Excel spreadsheets,
  2. Access databases,
  3. Informix,
  4. Ingres,
  5. Jasmine,
  6. Cognos,
  7. Hyperion,
  8. SAS and others.

The examples of shadow system vendors are :

  1. Oracle,
  2. Sybase,
  3. SAP,
  4. Athena IT Solution,
  5. FinLab Accounting Solution;
  6. IT Works, Inc. (Accounting, Financial, and Personnel Management Solution);
  7. and many more.

There are many shadow data systems come from the data warehouse (DW) and data mart in the organisation. The business person can perform their business using the Extract, Transform, and Load (ETL) in the Business Intelligence (BI) tool. They can analyse from that data for their business performance (Sherman, 2004). According to Neal (2011), there are three roles for ETL processes :

  1. Extract some data from CRM or ERP systems.
  2. Transform those data into the DW, such as Oracle, Teradata, IBM (large-scale company) and SAND technology (small-scale company).
  3. Load / store the data from DW to the users for determining in advanced.

As a result, an organisation will obtain less complicated (Kumar, Mahashwari, & Kumar, 2003, p. 805).

Enterprise Resource Planning, ERP system, Shadow system, week 2 shadow system

Fig. 1: An ERP System integration.

Behren & Sedera (2004), and Behren (2009) explain that educational organisation; such as Central Queensland University (as known as CQUniversity or CQU), Australia; uses shadow system, which is called Webfuse. It supports the academic functionalities.

What is the cause factors an Organisation Leverage Shadow Systems?

  • poor in business processes.
  • lack of manage an organisation, its support systems and training.
  • lack of good shadow system design.
  • inter departmental collision, because poor testing and surveillance.
  • Poor back up cycle business functionalities.
  • poor business processes documentation, which might be stolen by staffs who resign from the organisation. As a result, an organisation will lose their business secret and also lose their money.

What threat do these systems pose to integration?

There are some benefits of using Shadow Systems, eventhough shadow systems have difficulties at the core business in some cases. Behren (2009) describes that there are some positive and negative aspects using shadow systems.

Positive

Negative
1.    Vigorous substances in creativity.
For example, Webfuse at CQUniversity system, replies rapidly and tailors in the academic activities which entail the integration in the institution.		 1.  Control.
A shadow system, like CQU Webfuse, is a wild system due to uncontrolled and not belongs to IT Department (ITD). ITD only utilize it to perform the academic institution and avoid the system chaos.
2.    Competent resource of Innovation.
Innovation is the way to answer the market demand, and can become a market leader.		 2.  Stigma.
Users and IT Support the use of Webfuse systems often wonder about condemnation from ITD and top level management. Their perception that Webfuse is having academic issues, which some data and functionality is reiterated. Nonetheless, they contend that none of another system can do all the processes same as Webfuse system.
3.    Potential to bring the stability and order in the systems.
Webfuse, which is a CQU shadow System, can be minimized the anxiety their employees to minimize the slack time for uploading the course result data.		 3. Organisational politics.

Who or what else might be threatened by the existence of these systems?

1.    Stakeholder.

2.    Customers.

3.    IT Department.

4.    And all people who work in the organisation structure.

References

Behren, S & Sedera, W 2004, “Why Do Shadow Systems Exist after an ERP Implementation? Lessons from a Case Study”, PACIS 2004 Proceedings, Paper 136, viewed 23rd July 2013, http://aisel.aisnet.org/pacis2004/136.

Behren, S 2009, ‘Shadow Systems: The Good, The Bad, and The Ugly’, Communication of the ACM, vol. 52, no. 2, pp. 124 – 129.

Kumar, V. Mahashwari, B. & Kumar, U 2003, ‘An investigation of critical management issues in ERP implementation: emperical evidence from Canadian organizations’, Technovation, vol. 23, pp. 793-807.

Neal, H 2011, Business Intelligence 101 – A Beginner’s Guide to BI Software, viewed 29th July 2013, http://plotting-success.softwareadvice.com/beginners-guide-to-bi-software-1113011/.

Rainey, R 2013, New Orleans is approaching the Digital Age, but still has a long way to go, viewed 28th July 2013, http://www.nola.com/.

Sherman, R 2004, shedding Light on Data Shadow Systems, viewed 29th July 2013, http://www.information-management.com/news/1002617-1.html.

Ulrich, W 2006, Application Package Software: The Promise Vs. Reality, viewed 28th July 2013, http://www.cutter.com/content-and-analysis/journals-and-reports/cutter-benchmark-review/sample/cbr0609b.html.

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15 July 2013

Introduction

Enterprise Resource Planning

ERP Concepts, CRM, BPM, SCMNowadays, a business management becomes very heterogenous. Every organization will expand their business streams. When they are expanding their business and become a huge company, they will break their functionality into smaller units and will employ more experts. It means their management hierarchy will have more in the operational control management, but they will be under controlled by middle level management, and eventually the middle level management will give their responsibility to the Strategic Planning Management (top level of management). Generally, an organisation has 3 major levels of management which has different roles, namely Top / Senior level management, Mid-level or middle management, and Lower level management,  Motiwalla (2009) delineates that Senior management consists of Top managers and Knowledge Workers Professionals, who use ESS (Executive support systems) and DSS (Decision Support Systems) in their Information Systems (IS). Moreover, There are managerial support and Operational support in the Mid-level management, who use MIS (Management Information System) and TSS (Transaction Support System). Lastly, lower level consists of Communication & Collaboration Support & Infrastructure Support (Clerical Staff & IT Staff), who use Office Automation System & ODS (Operating & Database System). (see Fig 1).

Mgmt hierarchy

Fig 1. Management functionality and hierarchy (adopted from Motiwalla & Thompson, 2009, p. 46)

The complexity of their business processes need an integrated system cross their functionality, such as Finance department, HRD (Human Resource Department), Accounting Department, Operation Department, Supply Chain (SC) Department, Customer Services (CS) Department, Sales Department, and many more.  An information system (IS), which will take the complex business processes is Enterprise Resource Planning (as known as ERP systems).  Generally, Enterprise has 3 stages either in their industrial processes or Information systems, such as:

  1. Process.
  2. Output.

Motiwalla & Thompson (2009) shows the differences of process model between industrial and IS (see Fig 1).

Phases of IS

Fig 1. Stages of Information Systems (Motiwalla & Thompson, 2009, p. 5).

According to Motiwalla & Thompson (2012), there is an evolution of enterprise systems (ES).

  • It was started in the 1960s, a software vendor started to create an Inventory management and control (IMC), which can manage and monitor the inventory from the whole process start from raw materials until inventory reports.
  • In 1970s and 1980s , there were Material Requirement Planning (MRP); which help an organisation manage and control their sales and marketing in their business, and Manufacturing Resource Planning (MRP II), which design their strategy in the production and also control the product quality.
  • In 1990s, it was started Enterprise Resource Planning (ERP) system, which performs their business processes by integrating cross-department and can produce the better value chain management cross activities.
  • In between 2000s, it began with Extended ERP or ERP II, which more concentrate to consumer satisfaction and agility environment in a global business. It will integrate e-Business processes between organisation, their partner and business functions in SCM (Supply Chain Management), CRM (Customer Relationship Management), SFA (Sales Force Automation) , advanced Planning and Scheduling (APS), and many more. Additionally, Singleton (2013) pointed out that Cloud computing is the current trend since 2009, which integrate and controlling cross-functional department into centralization data through web-based infrastructure.

A successful organisation will build a strong Information Systems infrastructure. Every organisations need answer the global competitive market through silo information systems. Many of them implement agile methodology in their business, because they need flexibility and they can change the systems rapidly according to their customer’s need.

Furthermore, a writer will elaborate into several sections, such as:

  1. What is Shadow systems? What are the positive and negative aspects in the business process? ……………….. ( Click here / week 2 to open discussion page ).
  2. Best practice of ES Infrastructure. What is the value of ERP systems? What are the risks of using it? ………………………………………………………… ( Click here / week 3 to open discussion page ).
  3. The implication of adopting ERP systems for an organisation …………………………………………………………………… ( Click here / week 4 to open discussion page ).
  4. What are the risks of customizing ERP systems? The impact of BPR for an organisation …………………………… ( Click here / week 5 to open discussion page ).
  5. If an organisation has their in-house legacy system development and feel ailing set of it, is there any possibility of adopting ERP system into their current system..? ……………………………………………………………………………………………………………………..( Click here / week 6 to open discussion page ).
  6. Issues arise from delivery report?

References

Motiwalla, L.F & Thompson, J 2009, Enterprise Systems for Management, Pearson Education, Inc., New Jersey.

Motiwalla, L.F & Thompson, J 2012, Enterprise Systems for Management, 2nd edition, Pearson Education, Inc., New Jersey.

Singleton, D 2013, History of Manufacturing Software, viewed 28th July 2013, http://blog.softwareadvice.com/articles/manufacturing/manufacturing-software-history-0113/.

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