FoxMeyer Drugs was a $5 billion company and thenation's fourth largest distributor of pharmaceuticalsbefore the fiasco.
Matti rossi prof erp 03102012
Large enterprise system implementation challenges Matti Rossi – Inaugural lecture 3.10.2012 Aalto University School of Business
Excerpts from Bio• Editor in chief of Communications of the Association for Information Systems• One year visits to Georgia State Univ., RSM Erasmus and Claremont Graduate College• Minority owner and former board member of MetaCase Consulting (www.metacase.com) a spin off of the thesis project
IntroductionEnterprise system (ES):• Integrates and standardizes the core business processes and information resources of the whole organization• Provides a single system that allows information to be shared across all functional and management levels• Provides unified data definitions and semantics across an organization• Provides standardized processes and user interfaces across the organization
Major disasters and challenged projects• Finnish national railways ticketing system (2011)• Finnish national electronic patient record system and database (2002 – )• Ajoneuvorekisteri (2000 – 2011)• …• Taurus: London Stock Exchange System, developed for 10 years, at the cost of 700 mil £, and never deployed (1983 – 1993)• Nearly all major public sector IT initiatives in last 10 years have been seriously delayed and/or have exceeded their budgets
Typical problems• Delays e.g. New Taurus project manager after 5 years of development: “are we any closer to the end?” Project was scrapped in the end• Cost overruns e.g. Taurus initial estimate 11mil. £, final costs somewhere between 400 – 800 mil. £• Performance underruns e.g. Finnish national railways ticketing system problems• Delivering in time and on budget, but wrong system e.g. Finnish e-health records
Why this matters?• Systems developed, but not delivered, can cause tens or hundreds of millions of € worth of losses • E.g. Taurus• Poorly functioning systems can cause delays, poor morale or even absenteeism or early retirements • E.g. Healthcare systems• There are cases where an ES implementation gone bad has bankrupted companies • E.g. FoxMeyer logistics* *Scott, Judy E., & Vessey, Iris. (2002). Managing risks in enterprise systems implementations. Commun. ACM, 45(4), 74-81.
Can something be done for this?• Generally technology is not an issue• Large scale change processes are always difficult• Change and project management are critical for such projects• Project and system scope and fit with the organization have to be matched in early phases of the project• Projects should be made more manageable by: • Dividing them into manageable pieces • Sequencing the implementation • Being better buyers • Demanding more from the sellers
Suggested solution seeking:ENACT – ERP Development Networks inAction4 year Academy of Finland projectSee enact.lut.fi for more info
Research consortiumSystems development methods and practices Aalto University, Department of Information and Service Economy Prof. Matti Rossi Post Doc Researchers Hilkka Merisalo-Rantanen and Riitta Hekkala Doctoral candidate Erkka NiemiSoftware engineering related requirements, quality factors, metrics andfeedback mechanisms Lappeenranta University of Technology, Software Engineering Laboratory Prof. Kari SmolanderKnowledge management and knowledge transfer, human communicationand interactions Tampere University of Technology, Department of Business Information Management and Logistic Prof. Samuli Pekkola
Research objectivesEmpirical identification of actors in selected ERP developmentprojects Observation of communication and knowledge exchange between the identified actors: e.g. ERP core developers, ERP consultants, local ERP administrators and users, facilitates, Building an empirically grounded theoretical model to support ERP development in the networkIdentification of important quality factors in ERP projects anddevelopment of metrics based on these factorsActive deployment of new development methods and practices including but not limited to ERP core developers, ERP consultants, and local ERP administrators
Research approachAction DesignResearch (ADR) tobuild new tools,methods, andpractices Sein, Maung, Henfridsson, Ola, Purao, Sandeep, Rossi, Matti, & Lindgren, Rikard. (2011). Action Design Research. MIS Quarterly, 35(2)
Expected results 2012-2016Theoretical:• Identification of ERP development network actors and practices • Model of communication and interaction practices in ERP development networks • Model of information flows, including quality metrics• Integrated and scientifically evaluated tools and methods for ERP development • Improved and validated ERP development processes • Understanding of the alignment of development methods in complex ERP development networksPractical:• Improved competence of ERP implementers through project result dissemination• Avoidance of wasted effort!
How can this help?Identification of ES development network actors and practices • Clearly identified roles and responsibilities • Less finger pointing afterwards • Improved accountabilityImproved competence of ES implementers • Fever disasters • A slightly better chance of success • In some cases systems that actually make life easier • E.g. Finnish tax systemsAvoidance of wasted effort • Lot of tax payer or company money saved • Hugely improved quality of life for all stakeholders burdened with ES/ERP implementation projects
Contact information• Matti Rossi E-mail firstname.lastname@example.org GSM 050-3835503 Visiting address: Aalto University School of Business Chydenia building Runeberginkatu 22-24
Further reading• Nandhakumar, J., M. Rossi, et al. (2005). "The Dynamics of Contextual Forces of ERP Implementation." Journal of Strategic Information Systems 14(2): 221-242.• Mattila, M., Nandhakumar, J., Hallikainen, P., and Rossi, M. (2010) “Reorganizing Projects through Enterprise System, Emerging Role of Enterprise System During Radical Organizational Change”, Proceedings of HICSS- 43, IEEE Computer Society, Koloa, HI, 2010 (Best research paper award)