ERP Systems Implementation

Michael Lang

Lecturer in Information Systems

Cairnes Graduate School of Business & Public Policy

National University of Ireland, Galway

© Michael Lang, National University of Ireland, Galway 2

Information Systems Development

ISD is an inherently risky activity The objective of ISD is to change things and deliver benefits

e.g. cost savings, improved customer satisfaction, better efficiency, faster turnaround, etc.

… but who benefits ?

There are many stakeholders in ISD, internal and external

“What’s in it for me?”

Effecting change can be very difficult, especially where stakeholder lobby groups are strong

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Stakeholder Theory

Donaldson, T. & Preston, L. (1995) The stakeholder theory of the corporation: Concepts, evidence and implications. Academy of Management Review. 20(1), 65-91.

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Stakeholder Theory

Donaldson, T. & Preston, L. (1995) The stakeholder theory of the corporation: Concepts, evidence and implications. Academy of Management Review. 20(1), 65-91.

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Task-Technology Fit (TTF)

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DeLone & McLean (Updated) Model of Information Systems Success

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Unified Theory of Use and Acceptance of Technology (UTAUT)

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The “Software Crisis” Software “crisis”

NATO Conference 1968 “a monster of missed schedules, blown budgets, and flawed

products” (Brooks, 1987) No Silver Bullet Software’s “chronic” crisis (Gibbs, 1994) A “crisis” that lasts a few decades is a contradiction in terms

(Pressman, 1997)

Software is not like manufacturing or civil engineering Why Users Cannot 'Get What They Want‘ (Paul, 1994) – “Fixed

point theorem” Requirements are prone to frequent and dramatic change Software development is perhaps the “most complex endeavour

humankind has ever attempted” (Brooks 1987)

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Systems Development Methods “Methodologies era” of the 1970s / 1980s

Waterfall / SDLC model came from large-scale public sector projects (US DoD)

User involvement is supported only during the early stages and at the very end

“[The traditional SDLC] does not work well for many classes of software, particularly interactive end user applications” (Boehm, 1988)

“I’ll know it when I see it” (IKIWISI) systems – requirements very difficult to pin down

The traditional SDLC relies strictly on the formal specification document, which “freezes” requirements

This practice can lead to obsolescence even before delivery !!

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Systems Development Methods Modern approaches

Lean “Lightweight” methodologies / Just-in-Time Software Rapid prototyping Rapid Application Development (RAD) Timeboxing Incremental / Iterative / Evolutionary Development Agile Methods (e.g. XP, SCRUM, DSDM) Commercial Off-The-Shelf (COTS) development Open Source Software solutions

These approaches seek to embrace risk by means of rapidly getting a system in place, and incrementally upgrading it / rolling it out

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It’s All About the Requirements ! “In nearly every software project that fails to meet

performance and cost goals, requirements inadequacies play a major and expensive role in project failure” (Alford & Lawson, 1979)

“The hardest single part of building a software system is deciding precisely what to build. No other part of the conceptual work is as difficult as establishing the detailed technical requirements ... No other part of the work so cripples the resulting system if done wrong.” (Brooks, 1987)

Build the correct system (product) + Build the system correctly (process)

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Playing Catch-up with User NeedsF

UN

CT

ION

AL

ITY

TIME

User NeedsActual System

Capabilities

t0 t1 t3t2 t5t4

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IS Project Success (CHAOS Report)

User Involvement 15.9% Executive Management Support 13.9% Clear Statement of Requirements 13.0% Proper Planning 9.6% Realistic Expectations 8.2% Smaller Project Milestones 7.7% Competent Staff 7.2% Ownership 5.3% Clear Vision and Objectives 2.9% Hard Working, Focused Staff 2.4% Other 13.9%

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IS Project Failure (CHAOS Report)

Incomplete Requirements 13.1% Lack of User Involvement 12.4% Lack of Resources 10.6% Unrealistic Expectations 9.9% Lack of Executive Support 9.3% Changing Requirements & Specifications 8.7% Lack of Planning 8.1% Didn't Need it any Longer 7.5% Lack of IT Management 6.2% Technology Illiteracy 4.3% Other 9.9%

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Public Sector Projects: US GAO

47%2%

19%

29%

3%

Delivered But Unsuccessful ($3.2m)

Usable after Modification ($198,000)

Usable as Delivered ($119,000)

Used but Extensively Reworked or Abandoned ($1.3m)

Paid For but Undelivered ($1.95m)

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Information Systems “Failures” The history of ISD has seen many failed

implementations and “software runaways”

London Ambulance Service Computer Aided Despatch (LASCAD)

Denver Airport: automated luggage handling system (ALHS)

London Stock Exchange: TAURUS System

California: Department of Motor Vehicles System (DMV)

Ireland HSE: PPARS System

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Lessons for ERP Systems … "Those who fail to learn history are doomed to

repeat it" (Winston Churchill)

In the field of MIS, “issues seen as ‘new’ turn out to have long roots” (Keen, 1991)

What of ERP Systems ? ERP systems are large scale, expensive projects ERP systems may involve dramatic changes to work

practices and organisational processes They are not “quick fix” solutions and need to be

implemented with care

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ERP Critical Success Factors

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ERP Implementation Framework