Hour 6: ERP Implementation & Training

1. Hour 6:ERP Implementation & Training User Training Maintenance

2. BENEFITS OF ERPShang and Seddon, AMCIS 2000 Proceedings • Operational • Managerial • Strategic • IT Infrastructure • Organizational

3. Organizational Benefits • Cost reduction • Cycle time reduction • Productivity improvement • Quality improvement • Customer services improvement

4. Managerial Improvement • Improved resource management • Better decision making • Hard to prove • Better planning • Performance improvement

5. Strategic Improvement • Support business growth • Support business alliances • If they have the same system • Build business innovations • ? System can be constraining • Build cost leadership • Generate product differentiation • ?? Over time, only if you customize • Build external linkages • ? If they have the same system

6. IT Infrastructure Improvement • Build business flexibility • ??? ERP inherently a rigid system • IT cost reduction • The main reason CEOs adopt ERP • Increased IT capability

7. Organizational • Support organizational change • FORCE organizational change!! • Facilitate business learning • BPR does a good job of this • Empower employees • Within the system!! • Build common vision • FORCES common vision

8. Organizational Change from ERP • Productivity decline • Jobs redefined, new procedures established, ERP fine tuned, organization learns to process new information streams • Productivity gain • Develop new skills, structural changes, process integration, add bolt-ons • Payoff • Transform organizational operations to efficient level

9. ERP Project Failure

10. Critical Success Factors • What the organization must do well to succeed • For IS Projects: • Top management support • Inherent in ERP • Clearly stated objectives • Inherent in ERP • End User involvement

11. CSF TaxonomyAl-Mashari et al. (EJOR 2003) • SETTING UP • Management & Leadership • Visioning & Planning • IMPLEMENTATION • EVALUATION • Performance evaluation & management

12. IMPLEMENTATION • Financial • ERP package selection • Behavioral • Communication • Process management • Training & education • Cultural & structural changes • Technical • Project management • Legacy systems management • Systems integration • Systems testing

13. Features of Successful ERP ImplementationWillcocks & Sykes [2000] • IT Leadership • Business systems thinking • Relationship building • Have needed technical platform • Ability to troubleshoot • Informed buying • Contract efforts coordinated • Suppliers held accountable • Long-term relationships with suppliers

14. Factors to Reduce RiskMartin & Cheung [Business Process Management Journal, 2000] • Business case • Justify need for system, establish objectives • Benchmark • Import best practices • Implementation strategy • Align system with corporate strategy • Project management • Change management • BPR • Installation

15. ERP Critical Success FactorsUmble et al. [EJOR 2003] • Clear understanding – strategic goals • Top management commitment • Project management implementation • Great implementation team • Cope with technical issues • Organizational commitment to change • Extensive education & training • Data accuracy • Focused performance measures • Resolution of multi-site issues

16. Levels of IS/IT Failure • Corresponding failure • Don’t meet design objectives • Process failure • Not on time &/or not within budget • Interaction failure • System not used as designed • Expectation failure • Return not what stockholders expected

17. Factors in ERP Implementation FailureWillcocks & Sykes [2000]

18. Strategies to Attain Success

19. User Training • Focus on business processes • Not on using system • Explain why • Don’t skimp on time • Show why new system superior to old

20. Training Delivery Formats • Web-based virtual training • Computer-based training • Video courses • Self-study books • Pop-up help screens

21. Implementation Strategy OptionsMarkus et al. [2000] • Business Strategy • Total local autonomy • Headquarters control – financial only • Headquarters coordination • Network coordination • Total centralization • Software Configuration • Single/multiple financial/operations • Technical Platform • Centralized/Distributed • Management Execution • Big bang/Phased rollout

22. Implementation StrategiesMabert et al. [2000]

23. Implementation Strategies • Big bang seemingly cheapest • Dangerous • Often makes sense in ERP if carefully planned • Phased rollout reduces risk • Especially good for large organizations

24. ERP MaintenanceNah et al. (2001) • Corrective • Incorporate vendor patches, fix problems • Adaptive • Implement new features, internal customization, implement interfaces • Perfective • New versions • Preventive • Monitor response time, errors, track maintenance activities

25. ERP System Migration • Over time, need to adopt changes • Minor modifications • Maybe system replacement • Vendors change products • WHY • The longer the time between upgrades, the harder • Easier to support a smaller number of software versions • Migrations can increase sales of seats, add-ons

26. User Reasons to Migrate • Added functionality • Compliance with new standards • Discontinued vendor support • Customer problems in linked systems

27. Summary • Time, cost, functionality tradeoff • In ERP, functionality the most important • Critical success factors • Top support & clear objectives inherent in ERP • Need User Involvement • Phased implementation reduces risk • but increases time • Once installed, still many pitfalls • Vendors change products • User training critical