A Framework for Understanding the Stakeholder Involvement in ERP Selection: The Case of HSP and NZM Liaquat Hossain Inform...
Outline of the Presentation <ul><li>Introduction & Background to ERP </li></ul><ul><li>ERP Research Problem & Its Context ...
The Aim of this ERP Study <ul><li>A stakeholder involvement framework is developed and applied here to understand stakehol...
Introduction & Background to Enterprise Resource Planning <ul><li>What is ERP Systems? </li></ul><ul><ul><li>ERP systems a...
The Benefits of ERP Systems <ul><li>The implementation of ERP removes inconsistencies & enables the firm in attaining cons...
The ERP Vendors <ul><li>_______________________________________ </li></ul><ul><li>Vendors Product  Revenue (m) </li></ul><...
ERP Research Problem & Its Context <ul><li>Trends in ERP Selection 1997  1998  1999 </li></ul><ul><li>Portfolio Approach  ...
ERP Selection-Preliminary Investigation <ul><li>Stakeholders involved in the selection  </li></ul><ul><li>and implementati...
Problem Statement <ul><li>How is the selection of ERP Systems being practiced by the HSP and NZM? </li></ul><ul><li>What i...
A Normative Framework  for ERP Selection Invite Client Consultant Vendor Client Choose Managerial and users decision Fixed...
The Design of ERP Research
Background of the HSP <ul><li>HSP: </li></ul><ul><ul><li>is a crown health enterprise established in 1993.  </li></ul></ul...
Background of the HSP <ul><ul><li>HSP maintains three broad categories of records and files:  </li></ul></ul><ul><ul><ul><...
Background of NZM <ul><li>NZM: </li></ul><ul><ul><li>was established in the late 19 th  century </li></ul></ul><ul><ul><li...
Background of NZM <ul><ul><li>NZM is controlled by a Board of Directors with a CEO who reports to the board </li></ul></ul...
Conclusions <ul><li>Involvement of all stakeholders to increase ownership </li></ul><ul><li>Spreading control </li></ul><u...
Implication of the SIF for ERP Selection
The relationship between SIF and the ERP project timeline Stakeholders' involvement ERP project Timeline Consultants Vendo...
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A Framework for Understanding the Stakeholder Involvement in ...

  1. 1. A Framework for Understanding the Stakeholder Involvement in ERP Selection: The Case of HSP and NZM Liaquat Hossain Information Systems Basser Dept of Computer Science The University of Sydney Australia
  2. 2. Outline of the Presentation <ul><li>Introduction & Background to ERP </li></ul><ul><li>ERP Research Problem & Its Context </li></ul><ul><li>A Normative Framework for ERP Selection </li></ul><ul><li>The Design of the ERP Research </li></ul><ul><li>A Descriptive Framework for ERP Selection for New Zealand </li></ul><ul><li>Towards a Predictive Framework for ERP Selection </li></ul><ul><li>Conclusions </li></ul>
  3. 3. The Aim of this ERP Study <ul><li>A stakeholder involvement framework is developed and applied here to understand stakeholders involvement in the selection process of ERP systems for the Health Service Provider (HSP) and the New Zealand Manufacturing (NZM) </li></ul><ul><li>A multiple case study design approach is used here to collect primary data from the HSP, the NZM and five leading ERP vendors. </li></ul>
  4. 4. Introduction & Background to Enterprise Resource Planning <ul><li>What is ERP Systems? </li></ul><ul><ul><li>ERP systems are a multi-module application software packages. </li></ul></ul><ul><ul><li>provides integration of an organisation’s business information processing. </li></ul></ul><ul><ul><li>Supports the integration of functions such as sales, marketing, human resources and others. </li></ul></ul><ul><ul><li>Originated from the MRP systems. </li></ul></ul>
  5. 5. The Benefits of ERP Systems <ul><li>The implementation of ERP removes inconsistencies & enables the firm in attaining consolidated reports. </li></ul><ul><li>More than 60 percent of the Fortune 1000 companies are implementing packaged ERP systems (Kraft, 1999). </li></ul><ul><li>ERP can be used for enhancing- </li></ul><ul><ul><li>supply chain management (SCM) </li></ul></ul><ul><ul><li>customer relationship management (CRM) </li></ul></ul><ul><ul><li>professional service automation (PSA) </li></ul></ul>
  6. 6. The ERP Vendors <ul><li>_______________________________________ </li></ul><ul><li>Vendors Product Revenue (m) </li></ul><ul><li>_______________________________________ </li></ul><ul><li>SAP R/3 5,079 </li></ul><ul><li>Oracle Oracle 2,140 </li></ul><ul><li>PeopleSoft PeopleSoft 1,313 </li></ul><ul><li>Bann Bann 736 </li></ul><ul><li>JD Edwards OneWorld 934 </li></ul><ul><li>_____________________________________________ </li></ul><ul><li>Table 1. A Summary of the product and revenue of </li></ul><ul><li>the ERP software offered by five leading vendors </li></ul>
  7. 7. ERP Research Problem & Its Context <ul><li>Trends in ERP Selection 1997 1998 1999 </li></ul><ul><li>Portfolio Approach No No Yes </li></ul><ul><li>SMEs No Yes Yes </li></ul><ul><li>Research & Surveys No Yes Yes </li></ul><ul><li>Fixed Price ERP No No Yes </li></ul><ul><li>CRM No No Yes </li></ul><ul><li>Outsourcing ERP No Yes Yes </li></ul><ul><li>Partnerships No Yes Yes </li></ul><ul><li>Compact Packages No No Yes </li></ul><ul><li>OO Programming Paradigm No Yes Yes </li></ul><ul><li>SCM No Yes Yes </li></ul><ul><li>Management Framework Yes Yes Yes </li></ul><ul><li>ERP Consultants No No Yes </li></ul><ul><li>Application Integration No Yes Yes </li></ul>
  8. 8. ERP Selection-Preliminary Investigation <ul><li>Stakeholders involved in the selection </li></ul><ul><li>and implementation of ERP </li></ul>Client Consultant Vendors <ul><li>ERP </li></ul><ul><li>ASP </li></ul><ul><li>Other Applications Vendors </li></ul><ul><li>Application Integrators </li></ul><ul><li>Senior management </li></ul><ul><li>Operation managers </li></ul><ul><li>Users </li></ul><ul><li>Define strategy </li></ul><ul><li>Define key business process </li></ul><ul><li>Selection partner </li></ul><ul><li>Implementation partner </li></ul><ul><li>Post-implementation adviser </li></ul><ul><li>Legend: </li></ul><ul><li>ERP: Enterprise resource planning </li></ul><ul><li>ASP: application service providers </li></ul><ul><li>Other applications Vendors : (e.g. CRM: Customer Relationship Management, PSA: Professional Services Automation, PM: Project Management, SCM: Supply Chain Management, etc.). </li></ul><ul><li>Application Integrators: they manage to integrate different applications to an ERP solution </li></ul>
  9. 9. Problem Statement <ul><li>How is the selection of ERP Systems being practiced by the HSP and NZM? </li></ul><ul><li>What is the interaction between internal and external stakeholders in the ERP selection process of HSP and NZM? </li></ul><ul><li>How can the development of a Stakeholder Involvement Framework (SIF) help improve the selection and implementation of ERP systems? </li></ul>
  10. 10. A Normative Framework for ERP Selection Invite Client Consultant Vendor Client Choose Managerial and users decision Fixed price contract Consultant Define Key Business Processes (KBP) 3-5 Max. Client * Involve users and managers * Contact similar industry for examples and lessons Consultant * Provides research studies * Manage process * Methodology (script scenarios) Invite Vendors Solution demonstration Short list Decision Choose Client Consultant Client * Voting Consultant * Silent partner Implementation Client Consultant Vendor Post Implementation review Client Consultant Vendor ? ? Managerial decision Managerial and users decision
  11. 11. The Design of ERP Research
  12. 12. Background of the HSP <ul><li>HSP: </li></ul><ul><ul><li>is a crown health enterprise established in 1993. </li></ul></ul><ul><ul><li>The company provides hospital-based services, community-based and domiciliary services. </li></ul></ul><ul><ul><li>The organization has a board of directors appointed by the minister for crown health enterprises. </li></ul></ul><ul><ul><li>The principal officer is the chief executive officer (CEO) who reports to the board. </li></ul></ul>
  13. 13. Background of the HSP <ul><ul><li>HSP maintains three broad categories of records and files: </li></ul></ul><ul><ul><ul><li>medical records (written case-notes, lab reports, x-ray reports etc.), </li></ul></ul></ul><ul><ul><ul><li>personnel records and administrative & financial records, each in hard copies and computer files. </li></ul></ul></ul><ul><li>The systems that were considered for the ERP project included the personnel, administrative and financial records systems only. </li></ul>
  14. 14. Background of NZM <ul><li>NZM: </li></ul><ul><ul><li>was established in the late 19 th century </li></ul></ul><ul><ul><li>produces a wide range of food products that are sold to manufacturers and retailers both in New Zealand and export markets </li></ul></ul><ul><ul><li>The company had 100% of the NZ market, which was under Government &quot;Supervision&quot; until 1986, when the Government removed all import and financial controls. </li></ul></ul><ul><ul><li>At that time it was realized that for NZM to compete in a deregulated market , it would have to change from being production driven to market driven. </li></ul></ul>
  15. 15. Background of NZM <ul><ul><li>NZM is controlled by a Board of Directors with a CEO who reports to the board </li></ul></ul><ul><ul><li>A group of three shareholders own the company. Shares distribution is 50% to the main partner and 25% to the other two. </li></ul></ul><ul><ul><li>The three shareholders own similar percentages of the Australian sister company, Australian Manufacturing (AUM) who produces similar products. </li></ul></ul><ul><ul><li>NZM and AUM are separate business entities. Being in the same industry and of similar operations, their financial results are often compared by the shareholders. </li></ul></ul><ul><ul><li>Current information systems are custom-made software that were developed in-house during the late eighties. </li></ul></ul>
  16. 16. Conclusions <ul><li>Involvement of all stakeholders to increase ownership </li></ul><ul><li>Spreading control </li></ul><ul><li>Sufficient information availability to stakeholder during selection </li></ul><ul><li>Awareness and identification of influence </li></ul><ul><li>Evaluation committee </li></ul>
  17. 17. Implication of the SIF for ERP Selection
  18. 18. The relationship between SIF and the ERP project timeline Stakeholders' involvement ERP project Timeline Consultants Vendors Users and IT/ IS personnel Top management ERP system selected

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