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Seminar: Training
Seminar: Training
Seminar: Training
Seminar: Training
Seminar: Training
Seminar: Training
Seminar: Training
Seminar: Training
Seminar: Training
Seminar: Training
Seminar: Training
Seminar: Training
Seminar: Training
Seminar: Training
Seminar: Training
Seminar: Training
Seminar: Training
Seminar: Training
Seminar: Training
Seminar: Training
Seminar: Training
Seminar: Training
Seminar: Training
Seminar: Training
Seminar: Training
Seminar: Training
Seminar: Training
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Seminar: Training

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  • 1. Hour 6: ERP Implementation & Training User Training Maintenance
  • 2. BENEFITS OF ERP Shang and Seddon, AMCIS 2000 Proceedings <ul><li>Operational </li></ul><ul><li>Managerial </li></ul><ul><li>Strategic </li></ul><ul><li>IT Infrastructure </li></ul><ul><li>Organizational </li></ul>
  • 3. Organizational Benefits <ul><li>Cost reduction </li></ul><ul><li>Cycle time reduction </li></ul><ul><li>Productivity improvement </li></ul><ul><li>Quality improvement </li></ul><ul><li>Customer services improvement </li></ul>
  • 4. Managerial Improvement <ul><li>Improved resource management </li></ul><ul><li>Better decision making </li></ul><ul><ul><li>Hard to prove </li></ul></ul><ul><li>Better planning </li></ul><ul><li>Performance improvement </li></ul>
  • 5. Strategic Improvement <ul><li>Support business growth </li></ul><ul><li>Support business alliances </li></ul><ul><ul><li>If they have the same system </li></ul></ul><ul><li>Build business innovations </li></ul><ul><ul><li>? System can be constraining </li></ul></ul><ul><li>Build cost leadership </li></ul><ul><li>Generate product differentiation </li></ul><ul><ul><li>?? Over time, only if you customize </li></ul></ul><ul><li>Build external linkages </li></ul><ul><ul><li>? If they have the same system </li></ul></ul>
  • 6. IT Infrastructure Improvement <ul><li>Build business flexibility </li></ul><ul><ul><li>??? ERP inherently a rigid system </li></ul></ul><ul><li>IT cost reduction </li></ul><ul><ul><li>The main reason CEOs adopt ERP </li></ul></ul><ul><li>Increased IT capability </li></ul>
  • 7. Organizational <ul><li>Support organizational change </li></ul><ul><ul><li>FORCE organizational change!! </li></ul></ul><ul><li>Facilitate business learning </li></ul><ul><ul><li>BPR does a good job of this </li></ul></ul><ul><li>Empower employees </li></ul><ul><ul><li>Within the system!! </li></ul></ul><ul><li>Build common vision </li></ul><ul><ul><li>FORCES common vision </li></ul></ul>
  • 8. Organizational Change from ERP <ul><li>Productivity decline </li></ul><ul><ul><li>Jobs redefined, new procedures established, ERP fine tuned, organization learns to process new information streams </li></ul></ul><ul><li>Productivity gain </li></ul><ul><ul><li>Develop new skills, structural changes, process integration, add bolt-ons </li></ul></ul><ul><li>Payoff </li></ul><ul><ul><li>Transform organizational operations to efficient level </li></ul></ul>
  • 9. ERP Project Failure Earnings dropped $11 million WW Grainger Inc Inefficient ERP – operating loss Miller Industries Erroneous paychecks City of Oakland 19% drop in profit 29% increase in inventory Hershey’s Bankrupt FoxMeyer Drug
  • 10. Critical Success Factors <ul><li>What the organization must do well to succeed </li></ul><ul><li>For IS Projects: </li></ul><ul><ul><li>Top management support </li></ul></ul><ul><ul><ul><li>Inherent in ERP </li></ul></ul></ul><ul><ul><li>Clearly stated objectives </li></ul></ul><ul><ul><ul><li>Inherent in ERP </li></ul></ul></ul><ul><ul><li>End User involvement </li></ul></ul>
  • 11. CSF Taxonomy Al-Mashari et al. ( EJOR 2003) <ul><li>SETTING UP </li></ul><ul><ul><li>Management & Leadership </li></ul></ul><ul><ul><li>Visioning & Planning </li></ul></ul><ul><li>IMPLEMENTATION </li></ul><ul><li>EVALUATION </li></ul><ul><ul><li>Performance evaluation & management </li></ul></ul>
  • 12. IMPLEMENTATION <ul><li>Financial </li></ul><ul><ul><li>ERP package selection </li></ul></ul><ul><li>Behavioral </li></ul><ul><ul><li>Communication </li></ul></ul><ul><ul><li>Process management </li></ul></ul><ul><ul><li>Training & education </li></ul></ul><ul><ul><li>Cultural & structural changes </li></ul></ul><ul><li>Technical </li></ul><ul><ul><li>Project management </li></ul></ul><ul><ul><li>Legacy systems management </li></ul></ul><ul><ul><li>Systems integration </li></ul></ul><ul><ul><li>Systems testing </li></ul></ul>
  • 13. Features of Successful ERP Implementation Willcocks & Sykes [2000] <ul><li>IT Leadership </li></ul><ul><li>Business systems thinking </li></ul><ul><li>Relationship building </li></ul><ul><li>Have needed technical platform </li></ul><ul><li>Ability to troubleshoot </li></ul><ul><li>Informed buying </li></ul><ul><li>Contract efforts coordinated </li></ul><ul><li>Suppliers held accountable </li></ul><ul><li>Long-term relationships with suppliers </li></ul>
  • 14. Factors to Reduce Risk Martin & Cheung [ Business Process Management Journal , 2000] <ul><li>Business case </li></ul><ul><ul><li>Justify need for system, establish objectives </li></ul></ul><ul><li>Benchmark </li></ul><ul><ul><li>Import best practices </li></ul></ul><ul><li>Implementation strategy </li></ul><ul><ul><li>Align system with corporate strategy </li></ul></ul><ul><li>Project management </li></ul><ul><li>Change management </li></ul><ul><li>BPR </li></ul><ul><li>Installation </li></ul>
  • 15. ERP Critical Success Factors Umble et al. [ EJOR 2003] <ul><li>Clear understanding – strategic goals </li></ul><ul><li>Top management commitment </li></ul><ul><li>Project management implementation </li></ul><ul><li>Great implementation team </li></ul><ul><li>Cope with technical issues </li></ul><ul><li>Organizational commitment to change </li></ul><ul><li>Extensive education & training </li></ul><ul><li>Data accuracy </li></ul><ul><li>Focused performance measures </li></ul><ul><li>Resolution of multi-site issues </li></ul>
  • 16. Levels of IS/IT Failure <ul><li>Corresponding failure </li></ul><ul><ul><li>Don’t meet design objectives </li></ul></ul><ul><li>Process failure </li></ul><ul><ul><li>Not on time &/or not within budget </li></ul></ul><ul><li>Interaction failure </li></ul><ul><ul><li>System not used as designed </li></ul></ul><ul><li>Expectation failure </li></ul><ul><ul><li>Return not what stockholders expected </li></ul></ul>
  • 17. Factors in ERP Implementation Failure Willcocks & Sykes [2000] Chaos Insufficient talent Outdated relationships & capabilities Cost overruns Disregarded Supplier/consultant driven Fail to gain business benefits Technical Technological determinism Typical outcome CIO/IT Focus Scenario
  • 18. Strategies to Attain Success controlled Supplier/consultant role Short (6-9 months if can) Dolphins, not whales Time-box philosophy High level of support Champion present Governance & Staffing Users over IT staff User vs. Specialist focus
  • 19. User Training <ul><li>Focus on business processes </li></ul><ul><ul><li>Not on using system </li></ul></ul><ul><li>Explain why </li></ul><ul><li>Don’t skimp on time </li></ul><ul><li>Show why new system superior to old </li></ul>
  • 20. Training Delivery Formats <ul><li>Web-based virtual training </li></ul><ul><li>Computer-based training </li></ul><ul><li>Video courses </li></ul><ul><li>Self-study books </li></ul><ul><li>Pop-up help screens </li></ul>
  • 21. Implementation Strategy Options Markus et al. [2000] <ul><li>Business Strategy </li></ul><ul><ul><li>Total local autonomy </li></ul></ul><ul><ul><li>Headquarters control – financial only </li></ul></ul><ul><ul><li>Headquarters coordination </li></ul></ul><ul><ul><li>Network coordination </li></ul></ul><ul><ul><li>Total centralization </li></ul></ul><ul><li>Software Configuration </li></ul><ul><ul><li>Single/multiple financial/operations </li></ul></ul><ul><li>Technical Platform </li></ul><ul><ul><li>Centralized/Distributed </li></ul></ul><ul><li>Management Execution </li></ul><ul><ul><li>Big bang/Phased rollout </li></ul></ul>
  • 22. Implementation Strategies Mabert et al. [2000] 2 25 Phased rollout by module & site 17 17 Mini big bang 17 22 Phased rollout by module 23 30 Phased rollout by site 41 15 Big bang % Months Strategy
  • 23. Implementation Strategies <ul><li>Big bang seemingly cheapest </li></ul><ul><ul><li>Dangerous </li></ul></ul><ul><ul><li>Often makes sense in ERP if carefully planned </li></ul></ul><ul><li>Phased rollout reduces risk </li></ul><ul><ul><li>Especially good for large organizations </li></ul></ul>
  • 24. ERP Maintenance Nah et al. (2001) <ul><li>Corrective </li></ul><ul><ul><li>Incorporate vendor patches, fix problems </li></ul></ul><ul><li>Adaptive </li></ul><ul><ul><li>Implement new features, internal customization, implement interfaces </li></ul></ul><ul><li>Perfective </li></ul><ul><ul><li>New versions </li></ul></ul><ul><li>Preventive </li></ul><ul><ul><li>Monitor response time, errors, track maintenance activities </li></ul></ul>
  • 25. ERP System Migration <ul><li>Over time, need to adopt changes </li></ul><ul><ul><li>Minor modifications </li></ul></ul><ul><ul><li>Maybe system replacement </li></ul></ul><ul><ul><li>Vendors change products </li></ul></ul><ul><li>WHY </li></ul><ul><ul><li>The longer the time between upgrades, the harder </li></ul></ul><ul><ul><li>Easier to support a smaller number of software versions </li></ul></ul><ul><ul><li>Migrations can increase sales of seats, add-ons </li></ul></ul>
  • 26. User Reasons to Migrate <ul><li>Added functionality </li></ul><ul><li>Compliance with new standards </li></ul><ul><li>Discontinued vendor support </li></ul><ul><li>Customer problems in linked systems </li></ul>
  • 27. Summary <ul><li>Time, cost, functionality tradeoff </li></ul><ul><ul><li>In ERP, functionality the most important </li></ul></ul><ul><li>Critical success factors </li></ul><ul><ul><li>Top support & clear objectives inherent in ERP </li></ul></ul><ul><ul><li>Need User Involvement </li></ul></ul><ul><li>Phased implementation reduces risk </li></ul><ul><ul><li>but increases time </li></ul></ul><ul><li>Once installed, still many pitfalls </li></ul><ul><ul><li>Vendors change products </li></ul></ul><ul><ul><li>User training critical </li></ul></ul>

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