Why Killer Applications can be assisted by ERP and CRM software

Pertemuan 5-6

Matakuliah : M0594 / Enterprise SystemTahun : 2007

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Why Killer Applications can be assisted by ERP and CRM software

• Killer Application create a Great Market• Organizational Studies, Reengineering, and ERP

Support• Policies and Procedures• Challenges on Implementing Multi-site Supply-

Chain• Complexity in IT and Its Effects on ERP

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Introduction• Well-managed companies are not interested in “any”

implementation of enterprise resource planning systems. Neither do they target a “me-too” type of Internet-enabled solution. They are satisfied only with the best, and they look forward to killer applications, that can give them significant competitive advantages in a demanding market where the stakeholders have the upper hand

• Being satisfied only with the best is, a very healthy policy.• Since 1999, this acceleration in technology investments and

improved management methods has lead to pioneering projects that have allowed top-tier companies to carry out a growing range of transactions on the Web, from ordering personalized items to doing auctions and reverse auctions. Web sites are built, maintained, and hosted because companies see advantages in handholding online with business partners, all the way to reaching internal information in each other’s ERP systems

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Killer Application create a Great Market• Some killer applications

– Word processor– VisiCalc– PageMaker– Mosaic and Netscape

• ERP software cannot be classified in the category of killer applications unless the ERP implementation undertaken by the company using it is really avant-garde, such as the Cisco example.

• The concept is that the highly competitive environment an enterprise puts in place can be greatly assisted by ERP, particularly if the information that it carries is fully networked

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Killer Application create a Great Market

• There are three reasons for this:– ERP frees human resources– The market success of an innovative product is

highly dependent on the vendor’s continuing ability to deliver

– The successful implementation of an ERP system requires a significant amount of reorganization

• See exhibit 2.2 and 2.3

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Organizational Studies, Reengineering, and ERP Support

• There have been two major classes of killer applications in off-the-shelf programming.– One is commodity software such as spreadsheet,

which was a new invention and received the market’s eye almost instanteously.

– The other is word packages, constituting a smart evolution of what already existed, albeit in hardware form.

• Advanced software solutions for smart materials and the Internet supply chain will largely fall into this second class, to which ERP also belongs

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Organizational Studies, Reengineering, and ERP Support

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Organizational Studies, Reengineering, and ERP Support

• In terms of return on investment (ROI) this is equivalent to taking the high road. This is precisely what the winners are doing; they are espousing high technology.

• In contrast, the losers, and the majority of the firms, choose the low road because they lack the vision and the guts to manage change.

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Organizational Studies, Reengineering, and ERP Support

• Senior management should understand that what matters most is to get its company ready for a quantum leap and to do so with clear objectives in mind

• Jean Monet, and investment banker suggest the pathway depicted in Exhibit 2.5– For Planning purposes, start at the end with the

deliverables and the time at which they should be presented

– Obviously, the execution path will start at the beginning, observing the milestones the planning phase has established

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Organizational Studies, Reengineering, and ERP Support

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Policies and Procedures that can Make Reengineering More Effective

• My experience with restructuring, reorganization, and reengineering suggests that information technology and other projects will be so much more effective if one follows a methodology that has proven its worth, and therefore its ability to provide deliverables.

• In project after project, six basic steps characterize such a methodology:– Write down the objective(s)– Examine the basic elements to be reengineered– Define if these elements must be high duty or low duty– Put to work a small, well-trained group under an able leader– Apply stringent timetables for deliverables– Perform design reviews with authority to kill the project

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Policies and Procedures that can Make Reengineering More Effective

• The best way to look at reengineering is as a method of maximizing the results of a thorough information technology reorganization, one that affects all or most platforms, basic software solutions, and applications domains.

• A critical issues is restructuring of data components based on their dependency relationship, as established through logical data models. This produces the nearest thing to an optimal order to follow in platform unification, database design and datamining, networking of available resources, system integration, and overall performance

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Policies and Procedures that can Make Reengineering More Effective

• To a very substantial extent, these results are obtained through information shared with the supply chain. Therefore, the reengineering program must support integrated analysis and design activities required to modernize the programs selected for migration to Internet-enabled ERP.

• The chosen methodology should implement streamlined functional and data requirements, even if the legacy systems being replaced had overlapping information and esoteric domain characteristics.

• The target configuration should be:– A set of homogeneous machine– An intelligent high-speed network– Shared distributed database– A user-friendly programming environment that is strong in

visualization and visibilization

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Challenges on Implementing Multi-site Supply-Chain

• Organization with multiple sites requiring Internet-oriented ERP support should study ways to implement supply chain solutions so that data and processes of the entire enterprise can be integrated into a unified aggregate.

• What can be done as a start is to established dependable common metrics. This should be followed by:– A project capable of identifying key processes relative to

strategic goals of the common effort, understanding and evaluating themfrom stake-holders’ viewpoints, as well as identifying quality attributes important to those processes

– A paralel project targeting cost/benefit, also from stakeholders’ viewpoints; poor estimates during budgeting typically result in frequent project overruns, wrong perceptions of quality of the projected solution, and friction

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Challenges on Implementing Multi-site Supply-Chain

• The multi-site problem amplifies the fact that decisions made by the top management must be specific to the degree to which the implementation of an Internet-oriented ERP solution will change operational autonomy, business coordination, and process integration.

• All three have an aftermath in the different business units of the enterprise. Organizational conflicts might arise and need to be resolved – if not in advance, then at least in real-enough-time. The same is true of structural changes that might be required to realize the intended benefits.

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Complexity in IT and Its Effects on ERP• Nothing alienates customers and internal users

more than technology that does not work in user-friendly and effective ways

• In a period of fast change, there are duties and challenges that cannot be put on the back burner while sticking to the old stuff