Hour 6:ERP Implementation & TrainingUser TrainingMaintenance

BENEFITS OF ERPShang and Seddon, AMCIS 2000 ProceedingsOperationalManagerialStrategicIT InfrastructureOrganizational

Organizational BenefitsCost reductionCycle time reductionProductivity improvementQuality improvementCustomer services improvement

Managerial ImprovementImproved resource managementBetter decision makingHard to proveBetter planningPerformance improvement

Strategic ImprovementSupport business growthSupport business alliancesIf they have the same systemBuild business innovations? System can be constrainingBuild cost leadershipGenerate product differentiation?? Over time, only if you customizeBuild external linkages ? If they have the same system

IT Infrastructure ImprovementBuild business flexibility??? ERP inherently a rigid systemIT cost reductionThe main reason CEOs adopt ERPIncreased IT capability

OrganizationalSupport organizational changeFORCE organizational change!!Facilitate business learningBPR does a good job of thisEmpower employeesWithin the system!!Build common visionFORCES common vision

Organizational Change from ERPProductivity declineJobs redefined, new procedures established, ERP fine tuned, organization learns to process new information streamsProductivity gainDevelop new skills, structural changes, process integration, add bolt-onsPayoffTransform organizational operations to efficient level

ERP Project Failure

Critical Success FactorsWhat the organization must do well to succeedFor IS Projects:Top management supportInherent in ERPClearly stated objectivesInherent in ERPEnd User involvement

CSF TaxonomyAl-Mashari et al. (EJOR 2003)SETTING UPManagement & LeadershipVisioning & PlanningIMPLEMENTATIONEVALUATIONPerformance evaluation & management

IMPLEMENTATIONFinancialERP package selectionBehavioralCommunicationProcess managementTraining & educationCultural & structural changesTechnicalProject managementLegacy systems managementSystems integrationSystems testing

Features of Successful ERP ImplementationWillcocks & Sykes [2000]IT LeadershipBusiness systems thinkingRelationship buildingHave needed technical platformAbility to troubleshootInformed buyingContract efforts coordinatedSuppliers held accountableLong-term relationships with suppliers

Factors to Reduce RiskMartin & Cheung [Business Process Management Journal, 2000]Business caseJustify need for system, establish objectivesBenchmarkImport best practicesImplementation strategyAlign system with corporate strategyProject managementChange managementBPRInstallation

ERP Critical Success FactorsUmble et al. [EJOR 2003]Clear understanding strategic goalsTop management commitmentProject management implementationGreat implementation teamCope with technical issuesOrganizational commitment to changeExtensive education & trainingData accuracyFocused performance measuresResolution of multi-site issues

Levels of IS/IT FailureCorresponding failureDont meet design objectivesProcess failureNot on time &/or not within budgetInteraction failureSystem not used as designedExpectation failureReturn not what stockholders expected

Factors in ERP Implementation FailureWillcocks & Sykes [2000]

Strategies to Attain Success

User TrainingFocus on business processesNot on using systemExplain whyDont skimp on timeShow why new system superior to old

Training Delivery FormatsWeb-based virtual trainingComputer-based trainingVideo coursesSelf-study booksPop-up help screens

Implementation Strategy OptionsMarkus et al. [2000]Business StrategyTotal local autonomyHeadquarters control financial onlyHeadquarters coordinationNetwork coordinationTotal centralizationSoftware ConfigurationSingle/multiple financial/operationsTechnical PlatformCentralized/DistributedManagement ExecutionBig bang/Phased rollout

Implementation StrategiesMabert et al. [2000]

Implementation StrategiesBig bang seemingly cheapestDangerousOften makes sense in ERP if carefully plannedPhased rollout reduces riskEspecially good for large organizations

ERP MaintenanceNah et al. (2001)CorrectiveIncorporate vendor patches, fix problemsAdaptiveImplement new features, internal customization, implement interfacesPerfectiveNew versionsPreventiveMonitor response time, errors, track maintenance activities

ERP System MigrationOver time, need to adopt changesMinor modificationsMaybe system replacementVendors change productsWHYThe longer the time between upgrades, the harderEasier to support a smaller number of software versionsMigrations can increase sales of seats, add-ons

User Reasons to MigrateAdded functionalityCompliance with new standardsDiscontinued vendor supportCustomer problems in linked systems

SummaryTime, cost, functionality tradeoffIn ERP, functionality the most importantCritical success factorsTop support & clear objectives inherent in ERPNeed User InvolvementPhased implementation reduces riskbut increases timeOnce installed, still many pitfallsVendors change productsUser training critical