Mis presentation 2012 an evaluation of erp systems failures group erp advisors
1 / 30

MIS Presentation 2012 An Evaluation of ERP Systems Failures Group: ERP Advisors - PowerPoint PPT Presentation

  • Uploaded on

MIS Presentation 2012 An Evaluation of ERP Systems Failures Group: ERP Advisors. Objectives. What is an ERP system ? What are the Benefits of an ERP system ? Who are the ERP vendors ? What aspects constitute a successful implementation?

I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
Download Presentation

PowerPoint Slideshow about 'MIS Presentation 2012 An Evaluation of ERP Systems Failures Group: ERP Advisors' - xuxa

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.

- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
Mis presentation 2012 an evaluation of erp systems failures group erp advisors

MIS Presentation 2012An Evaluation of ERP Systems FailuresGroup: ERP Advisors


  • What is an ERP system?

  • What are the Benefits of an ERP system?

  • Who are the ERP vendors?

  • What aspects constitute a successful implementation?

  • What factors are associated with ERP failuresand how to overcome them?

What is an erp systems
What is an ERP systems?

  • “They are systems designed to

    process an organisation transactions

    and facilitate integrated and real time planning,

    production and customer response.”

  • ERP Characteristics

    • ERPs are packaged software designed for a client server environment.

    • ERPs integrate the majority of a business processes

    • ERPs process a large majority of an organization’s transactions

    • ERPs use an enterprise wide database that typically stores each piece of data at once.

    • ERPs allows access to the data in real time.

(O’leary, 2000)

Functional aspects of an erp
Functional Aspects of an ERP

Source : http://www.inixion.com/images/features3.jpg

Erp life cycle
ERP life cycle

  • Deciding to Go ERP

  • Choosing and ERP system

  • Designing ERP systems

    • Should business process or

      current ERP software be changed

    • Choosing Standard Model and Process

  • Implementing ERP: Big Bang versus phased

  • After Going Live

  • Training

(O’leary, 2000)

Why implement an erp system
Why Implement an ERP system?

Tangible Benefits:

  • Reduce Labour Costs

  • Reduced material Costs

  • Improve in Sales and Customer Service

  • Efficient Financial Management

Intangible Benefits:

  • Information supply chain visibility

  • New/improved business processes

  • Product and Process design

  • Production and Material Management

Source : (Leon, 2008 and Cruz-Cunha 2010)

Why implement an erp system1
Why Implement an ERP system?

  • What are ERP Vendors marketing:

  • Improve alignment of strategies and operations

  • Reduce costs through increased flexibility

  • Achieve an end-to-end view across all your lines of business

  • Drives value for your business

  • Delivers agility in the face of rapid change

Source: http://www.epicor.com/uk/Company/PressRoom/Pages/SuccessStories.aspx

  • Cast Studies

  • Drallim – Fluid Controls /

  • Over 4,400 hours saved per year through process improvements and 21% cut in support costs

  • Vita Liquid Polymers/

  • 80% of customers now pay invoices a week earlier and automated processes mean tighter processes and proactive credit checking

Who are the erp vendors1
Who are the ERP vendors?

Source: Panorama Consulting, 2011 Guide To ERP Systems And Vendors

Erp vendors market share 2010
ERP Vendors Market Share 2010

Source: Panorama Consulting, 2011 Guide To ERP Systems And Vendors

Payback period by vendor tier up to 2010
Payback Period By Vendor Tier up to 2010

Source: Panorama Consulting, 2011 Guide To ERP Systems And Vendors

Roi and roa

Performance comparison Pre- and post-adoption for 63 ERP Systems:

Source : (C. Jones, Kalmi and Kauhanen, 2011)

How to measure erp success
How to Measure ERP success?

  • Lyytinenand Hirschheim(1987), categorized IT project success by assessing the resulting system against

    • Planned objectives,

    • User expectations,

    • Project budget

Highlights from a 2010 erp benchmark
Highlights from a 2010 ERP Benchmark

  • Over 40% of organizations are dealing with significant change form ERP system rollout.

  • Over 60% of organizations suffer from poor visibility to data and poor integration in their old systems.

  • Organizations expect a lot from their ERP systems.

  • Most companies are not yet ready for the organizational changes of ERP software.

Mis presentation 2012 an evaluation of erp systems failures group erp advisors

Some People

might have

different views

Erp project failure classification
ERP project failure classification

ERP project failure could be classified as one of four levels:

  • Process failure, when the project is not completed within the time and budget.

  • Expectation failure, when the IT systems do not match user expectations.

  • Interaction failure, when users attitudes towards IT are negative.

  • Correspondence failure, when there is no match between IT systems and the planned objectives.

(Aloin et al, 2007)

What factors are associated with erp failures and how to overcome them
What factors are associated with ERP failures and how to overcome them?

Risk categories associated with enterprise-wide/ERP projects:

  • Organizational Fit

  • Skill mix

  • Management structure and strategy

  • Software systems design

  • User involvement and training

  • Technology planning/integration

(Sumner, 2000 ; Ojalaet al, 2006)

Risk category organizational fit
Risk category overcome them: Organizational Fit

Risk Factors

  • Failure to redesign business processes to fit the software

  • Failure to follow an enterprise-wide design which supports data integration

(Sumner, 2000 ; Ojalaet al, 2006)

Case Study

Hershey Foods Corporation

(Wailgum, 2009)

Minimising Strategies

  • Commitment to redesigning business processes

  • Top management commitment

  • Following an enterprise-widedesign which supports data integration

(Sumner, 2000 ; Ojalaet al, 2006)

Risk category skill mix
Risk category overcome them: Skill Mix

Risk Factors

  • Insufficient training and reskilling

  • Insufficient internal expertise

  • Lack of business analysts with business and technology knowledge

  • Failure to mix internal and external expertise effectively

(Sumner, 2000 ; Ojalaet al, 2006)

Case Study

Lumber Liquidators


Minimising Strategies

  • Effective use of strategies for recruiting and retaining specialized technical personnel

  • Obtaining ‘business analysts’ with knowledge of application-specific modules

  • Effective use of external consultants on project teams

(Sumner, 2000 ; Ojalaet al, 2006)

Risk category management structure and strategy
Risk category overcome them:Management structure and strategy

Risk Factors

  • Lack of senior management support

  • Lack of proper management control structure

  • Lack of a champion

  • Ineffective communications

(Sumner, 2000 ; Ojalaet al, 2006)

Case Study

The City of San Diego

(Krigsman, 2009)

Minimising Strategies

  • Obtaining top management support

  • Establishing a centralized project management structure

  • Assigning a ‘champion’

(Sumner, 2000 ; Ojalaet al, 2006)

Risk category software systems design
Risk category overcome them: Software systems design

Risk Factors

  • Failure to adhere to standardized specifications which the software supports

  • Lack of integration

(Sumner, 2000 ; Ojalaet al, 2006)

Case Study

Levi Strauss

(Clarke, 2008)

Minimising Strategies

  • Commitment to using project management methodology and ‘best practices’specified by vendor

  • Adherence with software specifications

(Sumner, 2000 ; Ojalaet al, 2006)

Risk category user involvement and training
Risk overcome themcategory : User involvement and training

Risk Factors

  • Insufficient training of end-users

  • Ineffective communications

  • Lack of sensitivity to user resistance

  • Failure to emphasize reporting

(Sumner, 2000 ; Ojalaet al, 2006)

Case Study

Dorset County

(Anonymous, 2010)

Minimising Strategies

  • Effective user training

  • Full-time commitment of users to project management roles

  • Effective communications

(Sumner, 2000 ; Ojalaet al, 2006)

Risk categories technology planning integration
Risk categories overcome them: Technology planning/integration

Risk Factors

  • Inability to avoid technological bottlenecks

  • Attempting to build bridges to legacy applications

(Sumner, 2000 ; Ojalaet al, 2006)

Case Study

Dillard's Inc

(Jarzemsky, 2010)

Minimising Strategies

  • Acquiring technical expertise

  • Acquiring vendor support for capacity planning and upgrading

  • Planning for client–server implementation including client workstations

(Sumner, 2000 ; Ojalaet al, 2006)

Other aspects
Other Aspects: overcome them

In 2004, HP's project managers were

aware of the risks associated with the

ERP rollout. But they could not plan for so many events to happen at once.

The project eventually cost HP $160 million in order backlogs and revenue loss that accumulated to five times the project's estimated cost.

(Gilles Bouchard CIO of HP's global operations)

(Wailgum, 2009)

Strategic critical success factors
Strategic critical success overcome themfactors

  • Top management commitment and support

  • Visioning and planning

  • Build a business case

  • Project champion

  • Implementation strategy and timeframe

  • Vanilla ERP

  • Project management

  • Change management

  • Managing cultural change

(Finney and Corbett, 2007)

Tactical critical success factors
Tactical overcome themcritical success factors

  • Selection of ERP

  • Consultant selection and relationship

  • Training and job redesign

  • Troubleshooting/crises management

  • Data conversion and integrity

  • System testing

  • Post-implementation evaluation

  • Balanced team

  • Project team: the best and brightest

  • Communication plan

  • Empowered decision makers

  • Team morale and motivation

  • Project cost planning and management

  • BPR and software configuration

  • Legacy system consideration

  • IT infrastructure

  • Client consultation

(Finney and Corbett, 2007)

Summary overcome them

  • ERP Systems are not an IT solution but a system that would transform the company into a more efficient and effective organization.

  • Successful implementation of ERP is complexly tied to multiple factors that needs to be understood by management who are setting the strategic direction of the implementation process. Furthermore, A continuous support and monitoring of the implementation process is required at each stage.

  • The most important issue in a successful ERP project is an understanding of the company’s business and context requirements.

Reference list
Reference List: overcome them

  • Lyytinen, K. (1988) "Expectation Failure Concept and Systems Analysts' View of Information System Failure: Results of an Exploratory Study", Information & Management, 14, 1, pp 45-56.

  • Leon, A. (2008). Enterprise Resource Planning. 2nd ed. New Delhi: Tata McGraw-Hill. pp. 42

  • Cruz-Cunha, M. (2010). Enterprise Information Systems for Business Integration in SMEs. USA: Business Science Reference. pp. 155

  • Derek C. Jones, PanuKalmi, AnttiKauhanen, International Journal of Production Economics, Volume 130, Issue 2, April 2011, Pages 159-168 )

  • Sumner, M. “Risk factors in enterprise-wide/ERP Projects,” Journal of Information Technology, 2000, vol. 15, pp. 317-327.

  • Wailgum,T. (2009) Focus: ‘10 Famous ERP Disasters, Dustups and Disappointments ‘. CIO [online] Available at: < http://www.cio.com/article/486284/10_Famous_ERP_Disasters_Dustups_and_Disappointments> [Accessed 25 Feb 2012].

  • Kanaracus, C. (2010) Focus: ‘ERP Woes Blamed for Lumber Company's Bad Quarter‘. IDG News [online] Available at: < http://www.pcworld.com/businesscenter/article/209886/erp_woes_blamed_for_lumber_companys_bad_quarter.html > [Accessed 25 Feb 2012].

  • Krigsman, M . (2009) Focus: ‘San Diego fires Axon over ERP implementation problems‘. Zdnet [online] Available at: < http://www.zdnet.com/blog/projectfailures/san-diego-fires-axon-over-erp-implementation-problems/1960 > [Accessed 25 Feb 2012].

  • Clarke, G.(2008) Focus: ‘Levi's suffers profit meltdown in midst of SAP embrace Pants ERP system leaves it without pants‘. Theregister[online] Available at: < http://www.theregister.co.uk/2008/07/10/levis_erp_costs/ > [Accessed 25 Feb 2012].

  • Anonymous. (2010) Focus: ‘Dorset County Council computer problems continue ‘. Dorsetecho [online] Available at: < http://www.dorsetecho.co.uk/news/localnews/8625142.Dorset_County_Council_computer_problems_continue/ > [Accessed 25 Feb 2012].

  • Jarzemsky, M. (2010) Focus: ‘JDA Software Hit With Judgment in Dillard's Dispute ‘. The wall street journal [online] Available at: < http://online.wsj.com/article/SB10001424052748704198004575310463149768320.html> [Accessed 25 Feb 2012].

  • Ojala,M.Vilpola,I. and Kouri,I.(2006) “ Risks in ERP Project – Case Study of IS/ICT Management Capability Maturity Level and Risk Assessment”

  • Aloin,Di.Dulmin,R.Mininno,V. (2007) Risk management in ERP project introduction: Review of the literature, Information &amp; Management, Volume 44, Issue 6, September 2007, Pages 547-567

  • O'Leary,D. ( 2000) Enterprise Resource Planning Systems: Systems, Life Cycle, Electronic Commerce, and Risk, Cambridge University Press

  • Finney,S. and Corbett,M. (2007) "ERP implementation: a compilation and analysis of critical success factors", Business Process Management Journal, Vol. 13 Iss: 3, pp.329 - 347