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Databases for large scale integration

Databases for large scale integration. Focus on ERP projects. Enterprise Wide Applications. As the name indicates… Keywords: Integrated Centralised Best practice Cross functional “mega packages” Costly (inc. hidden costs) Highly complex High impact on business. Definition.

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Databases for large scale integration

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  1. Databases for large scale integration Focus on ERP projects

  2. Enterprise Wide Applications • As the name indicates… • Keywords: • Integrated • Centralised • Best practice • Cross functional • “mega packages” • Costly (inc. hidden costs) • Highly complex • High impact on business

  3. Definition • No simple definition • American Production and Inventory Control Society (APICS) an accounting-oriented information system for identifying and planning the enterprise-wide resources needed to take, make, ship, and account for customer orders • Transaction-oriented / operational

  4. Family of applications • Enterprise Resource Planning systems • Supply Chain Management • Customer Relationship Management • Other more specialised applications such as planning, warehouse management … • Merging into ERPII / XRP –encompassing all aspects of the business

  5. SCM Logistics Electronic Invoicing Electronic Marketplaces Contract Management Late 90’s CRM Early 00’s Sales Force Automation Contract Management Customer Service & Support Marketing Automation Documentation Management Early 00’s ERP IIProduct Data Management Engineering Change Orders New Product Introduction Collaborative Product Design A Complete Family Tree

  6. Time frame and key milestones 1950s EOQ Safety Stock BOMP Work Orders 1965 MRP MRPII 1975 More functions become Integrated in the process to add up to complete business solution ERP 1990 ERM / ERPII 2000

  7. 1950’s: unlimited demand Deliver Supplier Make Customer

  8. 1960’s : inventory costs money! Deliver Supplier Make Customer Plan Buy

  9. 1960’s : inventory costs money Deliver Supplier Make Customer Plan MRP Buy

  10. 1970’s : first wave of integration Deliver Supplier Make Customer Plan Sell MRP MRP II Buy

  11. 1980’s : sales order processing SOP Deliver Supplier Make Customer Plan Sell MRP MRP II Buy

  12. 1990’s : back-office integration Accounting & Finance Human Resources Deliver Supplier Make Customer Plan Sell MRP MRP II ERP Buy

  13. 2000’s : the extended enterprise SCM Accounting & Finance Human Resources CRM Deliver Supplier Make Customer Plan Service Sell MRP MRP II ERP Buy

  14. What’s next? SCM Accounting & Finance Human Resources CRM Deliver Supplier Make Customer ERP II Plan Design Service Sell MRP MRP II ERP Buy

  15. Goals of ERP implementations • Standardisation / centralisation • Control – eg: integration of financial data • End fragmentation of legacy systems • More visibility on key processes • Optimisation / productivity gains • Competitive advantage? • Platform for other projects = infrastructure / backbone • Mechanism for integration of latest technologies (eg: RFID)

  16. Other strong points • No more uncoordinated applications – eg quality control • No more re-keying • Solution to reporting problems across the board • “Sorting out” HR • Harmonising nomenclatures – eg: product codes, inventory files …

  17. Problems with ERP • Impact on business processes (eg: flexibility) • Understanding the “fit” problem • Doubtful benefits realisation (50% failure rate?) • Measurability • True origin of benefits • Impact on firm in wider sense • People • Clients / suppliers / partners… • Cost / disruption factor • $ • Time • Learning curve • Coping with evolution (version control)

  18. Gorry and Scott Morton (1971) “The integrated management information systems ideas so popular in the literature are a poor design concept. More particularly, the integrated or company wide database is a misleading notion and even if it could be achieved, it would be exorbitantly expensive” Gorry A. and Scott Morton. M.(1971) A Framework for Management Information Systems, Sloan Management Review, Fall,55-70.

  19. Dearden (1972) “The notion that a company can and ought to have an expert (or a group of experts) create for it a single, completely integrated super-system - an MIS - to help it govern every aspect of its activity is absurd” Dearden, A (1972) MIS is a mirage, Harvard Business Review, January / February

  20. Preparing for the implementation • Multi-disciplinary • Full time • Decision making power • Budget • Representative – team leads • Balance between allegiance to team and to area of competence • Team spirit • Team awareness • Must have support from organisation

  21. Business Integration • Focus on end-to-end process rather than single activity • Cross functional • Multi-competence • Reduced autonomy • Increased communication • Increased reliance on tools • Rationalisation of process? • Benefits do not accrue where the system is most constraining

  22. Workflow Workflow Workflow Workflow Sales management Shop floor control Field services ………….. Inventory planning How it works

  23. Workflow Workflow Workflow Workflow Data Flow Traceability Drill Down Sales management Shop floor control Field services ………….. Inventory planning How it works Independent versus complementary integration One way versus two way integration + see figure 16.4 ERP Module ERP Module

  24. Example of Business Integration • MUTAIR case study • Meals for plane travelers • Before: quality / high value service • Culinary business (chefs in toques) • Dedicated buying • Price not an issue • After: commodity • Drastic price reduction • MRP type scheduling / purchasing

  25. Mutair case study • Process integration: • p/o, receiving, issue, inventory, invoicing, accounts payable & accounts receivable • Bulk buying from agreed suppliers • Tough negotiation on price of RMs • But, rationalisation does not always work • 80% of jobs are OK • Rest cannot be planned (delays, change of schedule, special meals…) • Dysfunctional use of system => dysfunctional ERP

  26. What can go wrong • Integrated systems rely on actors to “play the game” • Need good perception of system • Here, actors impeded by system • Inaccurate data entry • Physical stock VS theoretical stock • Faxed P/Os post-entered / never entered (supplier does not exist) • Ghost deliveries reached the loading bay • Either goods sent back (no stocks) • or invoice cannot be reconciled (payment impossible) • Emergency orders must be entered somehow => wrong codes used • Overall performance of the process decreases • May keep going at local level • But overall vision is totally inaccurate • Might as well have implemented nothing

  27. Where problems originate? • In preparation phase for project • Lack of managerial awareness of risks / opportunities • Lack of understanding of how to select software • Lack of vision of the business impact • Wrong scope (eg: areas pull out and weaken project) • Not enough money for proper analysis • Wrong team (not at the right level / too militant)

  28. Communication • Political / change management dimension • Internal aspects • Expected support (we need you!) • Properly justify project (?) • Explain change in roles • Give assurances (when possible) • External aspects • Be upfront about new rules • Adopt participative approach? • Seek collaboration / leverage other firms’ systems • Perception of system / team

  29. Benefit realisation • Only occurs when definitive targets sought • Only occurs if analysis was realistic and did not neglect downsides • May be more intangible than measurable • Head count • Upfront implementation cost • Length of learning curve • Investment may not be exhausted by current usage (stage 2 / ERP2 etc…) • Whose benefits are those anyway?!?! • Case of the multi-national • Case of a dominant coalition

  30. Team Characteristics • Typical size: 25 to 60+ FTE • Team leads: 10 to 20 • Functional area experts • Special roles: • Project manager • Integration manager • Data conversion and migration • Training manager • Hardware / IT specialist • Platform expert • Communication about project (internal & external)

  31. Collecting requirements • Interviews with key individuals • Observation of activities • Consultation of documentation • Surveys • Targets: • Staff • Suppliers • Customers • Other constituencies when needed (eg: vendors…) As-Is + New requirements

  32. Overall Scope arbitration • Time and cost often already decided • Time boxing used to segregate • Trade off with having to do it again next year • Arbitrate between requirements • Out of scope • Conflict between areas • Conflict with proposed project scope • Steering committee (Director level)

  33. The ITT • Trade off between detail and speed of processing of information • Cover everything • Sample the functionality • Buy on faith • Available in generic format (see handout) • But always better when tailor made to fit business goals • See notion of fit in previous notes • Also prepare ITT to facilitate analysis • But some vendors will ignore the format

  34. Comparing tenders • Likely they all look good • Need a rigid set of criteria to decide • Criteria • Type of criterion • Relative weight • Rules for computing overall score • How many would you like to end up with? • Decide on shortlist

  35. Shortlisted firms • On or off site presentation • Intense meeting • Any item unclear in ITT • Any contentious point • User requirements • Price • Support / maintenance contract • Technical characteristics (eg: response time) • Then leave lawyers finish it off • Don’t expect a clear cut answer • Recommend for board level decision

  36. Next steps • Agree on exact schedule • Freeze scope again • Schedule participation of all required users / technical staff • Communicate communicate communicate • Run awareness workshops etc… • Negotiate re-skilling arrangements • Ring fence resources and budgets • Prepare for IMPLEMENTATION

  37. Implementation phase • Create fine configuration of package • Define roll out strategy • Schedule implementation in phases • Organise data loads • Go live (s) • Define criteria for ramp up period (duration to full capacity) • Measure progress and report

  38. ERP roll outs • Core team (global) • Local implementation teams • Roll out step: • Initial meeting with local pm • Local team set up • Bringing local team up to speed • Understand implications of template at local level • Create additional workarounds • Define criteria for acceptance / rejection of additional demands

  39. Training • Design training courses and develop material • Schedule training overall • Select and train trainers • Create facilities / sandpit • Book staff for training sessions • Coordinate training • Create assessment mechanism and monitor progress

  40. Data transfers into an application • First time system implementation • Data warehousing projects • Database version upgrade • ERP projects • Move to new version • Called a migration • From a manual system • From old to new system

  41. Data transfers between systems • Static data (eg. Customers) • Dynamic data (eg. sales orders) • Additional problems with a live system • Open items • Balances • Conversion or interfaces often required

  42. Data Upload • Several rounds: • Trials • Static data • Open items • Dynamic data - transactions • Balances • Staging areas • Local initially • Then central area • Upload into live system • Specific predefined sequence (RDB) • Extract, translate, load • Rental of platform specific tools from vendor

  43. Go live • A single point in time • First transaction routed through system – eg sales order • In reality loads of data already in – incremental approach • Plenty can still wrong although not right away • Over first few weeks – ramp up to full capacity

  44. Post Go Live • Team is disbanded • Back into business • Promoted • Next wave of roll out • Structure is permanently altered – eg: shared services • ERP team put in place • Data experts / maintenance • Application experts – on-going developments and fixes • Platform experts – uptime • Business analysts – look to future releases and future requirements • Typical size 20 /25 staff full time for a multinational • Various names used – eg: knowledge centre

  45. The story continues • Dysfunctional ERP => uninstall • Next phase in implementation • More modules • More sites • More interfaces to legacy systems • Update to new version • Merger and acquisition => change to other platform

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