Critical Success Factors in Best-of-Breed ERP Joseph Bradley, University of Missouri Rolla Mary Sumner, Southern Illinois ...
CSF’s <ul><li>H1:  The level of integration of ERP planning and business planning (Reich and Benbaset, 1996). </li></ul><u...
CSF’s <ul><li>H6:  Use of an ERP consultant for guidance (Welti, 1999). </li></ul><ul><li>H7:  CEO involvement (Laughlin, ...
Multiple Case Studies <ul><li>Case Methodology </li></ul><ul><ul><li>Structured interviews </li></ul></ul><ul><ul><li>Ques...
Case 1:  M-I Drilling <ul><li>Global energy services company (manufacturing and distribution); $1billion revenue </li></ul...
M-I Drilling <ul><li>Best of Breed Strategy </li></ul><ul><ul><li>Drilling mud production required a process manufacturing...
Case 2:  Boeing <ul><li>Boeing Integrated Defense (IDS):  $15 billion division; 140 applications; $250 million/year </li><...
Boeing <ul><li>Best of Breed Strategy </li></ul><ul><ul><li>Building capability (enhancements) into ERP implementation </l...
Table 2. Findings in Best of Breed ERP Extensive training on relevant modules Limited to keystroke/data entry 5.  Training...
Table 2. Findings in Best of Breed ERP Steering Committee continuously reviewed the business case for ERP  Steering commit...
Best of Breed Pro’s <ul><li>Can pick and choose ERP modules which best support business processes </li></ul><ul><li>Suppor...
Best of Breed Con’s <ul><li>Integration of ERP modules from different suppliers (e.g. building interfaces) </li></ul><ul><...
CSF’s in Best of Breed <ul><li>CSF’s Shared with Vanilla ERP Projects </li></ul><ul><ul><li>Alignment with business object...
Future Research <ul><li>What is the impact of vendor consolidation (e.g. Oracle bought Peoplesoft and J.D. Edwards)? </li>...
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Critical Success Factors in Best-of-Breed ERP

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Critical Success Factors in Best-of-Breed ERP

  1. 1. Critical Success Factors in Best-of-Breed ERP Joseph Bradley, University of Missouri Rolla Mary Sumner, Southern Illinois University Edwardsville
  2. 2. CSF’s <ul><li>H1: The level of integration of ERP planning and business planning (Reich and Benbaset, 1996). </li></ul><ul><li>H2: Organizing ERP implementation under the direction of a project manager whose sole responsibilities are the project (Wight, 1974). </li></ul><ul><li>H3: Organizational structure in which the project manager reports to the business unit’s senior manager (Wight, 1974). </li></ul><ul><li>H4: Staffing the ERP project manager position with an individual with extensive experience (Brown and Vessey, 2003). </li></ul><ul><li>H5: The quantity and quality of training (Lassila and Brancheau, 1999). </li></ul>
  3. 3. CSF’s <ul><li>H6: Use of an ERP consultant for guidance (Welti, 1999). </li></ul><ul><li>H7: CEO involvement (Laughlin, 1999). </li></ul><ul><li>H8: Existence of a champion (Beath, 1991). </li></ul><ul><li>H9: Management’s effectiveness in reducing user resistance (Somers, Ragowsky, Nelson, and Stern, 2001). </li></ul><ul><li>H10: Use of a steering committee that is (1) headed by the CEO and (2) meetings at least every four weeks (Mabert, Soni, and Venkataramanan, 2003). </li></ul>
  4. 4. Multiple Case Studies <ul><li>Case Methodology </li></ul><ul><ul><li>Structured interviews </li></ul></ul><ul><ul><li>Questionnaire </li></ul></ul><ul><ul><li>Archival data </li></ul></ul>
  5. 5. Case 1: M-I Drilling <ul><li>Global energy services company (manufacturing and distribution); $1billion revenue </li></ul><ul><li>Home-grown, outsourced legacy systems </li></ul><ul><li>Project </li></ul><ul><ul><li>Start date: 1995 </li></ul></ul><ul><ul><li>Oracle, Datalogix </li></ul></ul><ul><ul><li>Initial Project scope: $7 million </li></ul></ul>
  6. 6. M-I Drilling <ul><li>Best of Breed Strategy </li></ul><ul><ul><li>Drilling mud production required a process manufacturing package. </li></ul></ul><ul><ul><li>Oracle was selected for financial processes. </li></ul></ul><ul><ul><li>M-I selected Datalogix for purchasing, manufacturing, inventory, cost accounting and sales order entry. </li></ul></ul>
  7. 7. Case 2: Boeing <ul><li>Boeing Integrated Defense (IDS): $15 billion division; 140 applications; $250 million/year </li></ul><ul><li>Series of legacy, non-integrated mainframe systems </li></ul><ul><li>Project </li></ul><ul><ul><li>Start Date: 1993 </li></ul></ul><ul><ul><li>Overall Strategy: Building “common systems” </li></ul></ul><ul><ul><li>COTS </li></ul></ul><ul><ul><ul><li>Manugistics: Defense Procurement </li></ul></ul></ul><ul><ul><ul><li>Baan: Commercial Procurement </li></ul></ul></ul><ul><ul><ul><li>Oracle: Financials </li></ul></ul></ul><ul><ul><ul><li>Peoplesoft: HR </li></ul></ul></ul><ul><li>Initial Project Scope: $16 million </li></ul>
  8. 8. Boeing <ul><li>Best of Breed Strategy </li></ul><ul><ul><li>Building capability (enhancements) into ERP implementation </li></ul></ul><ul><ul><li>Required vendors to customize ERP software to meet unique business requirements (e.g. defense contract accounting) </li></ul></ul><ul><ul><li>Vendor partnership </li></ul></ul>
  9. 9. Table 2. Findings in Best of Breed ERP Extensive training on relevant modules Limited to keystroke/data entry 5. Training ERP project managers had extensive business knowledge CSC project leader with excellent project management and software skills 4. Experience of project manager Steering committee led by the project managers Steering committee headed by IT director 3. Reporting level of project manager ERP project managers are business leaders representing Production, Engineering, and Operations Consultant served as project manager 2. Full time project manager IT plan supports the business plan IT plan supports the business plan 1. IT and business planning integration Boeing MI Drilling Hypotheses  
  10. 10. Table 2. Findings in Best of Breed ERP Steering Committee continuously reviewed the business case for ERP Steering committee used, but not headed by CEO. Some complaints on effectiveness 10. Steering Committee ERP project managers were the change agents. Strategies included education and communications Heavy employee communications and top-down support 9. Management effectiveness in reducing user resistance ERP project managers were the champions Two co-managers were the champions 8. Champions Management was committed to the value of ERP based upon the business case Limited to approvals, support 7. CEO Involvement Used extensively Used extensively 6. Consultants Boeing MI Drilling Hypotheses
  11. 11. Best of Breed Pro’s <ul><li>Can pick and choose ERP modules which best support business processes </li></ul><ul><li>Supports “strategic” business processes </li></ul><ul><li>Avoids having to re-engineer business processes to “fit” best practices supported by the supplier </li></ul><ul><li>Less resistance to change </li></ul><ul><li>Less dependent on a single supplier </li></ul>
  12. 12. Best of Breed Con’s <ul><li>Integration of ERP modules from different suppliers (e.g. building interfaces) </li></ul><ul><li>Coordination among multiple suppliers; broader exposure to vendor failure </li></ul><ul><li>Upgrading to new versions (e.g. new customizations, new interfaces) </li></ul><ul><li>Cost implications </li></ul>
  13. 13. CSF’s in Best of Breed <ul><li>CSF’s Shared with Vanilla ERP Projects </li></ul><ul><ul><li>Alignment with business objectives </li></ul></ul><ul><ul><li>Project managers with extensive business knowledge </li></ul></ul><ul><ul><li>Champions </li></ul></ul><ul><li>CSF’s Unique to Best of Breed ERP </li></ul><ul><ul><li>Supplier management </li></ul></ul><ul><ul><li>Cost of upgrades </li></ul></ul><ul><ul><li>Closer monitoring of linkage between project investment and business results </li></ul></ul>
  14. 14. Future Research <ul><li>What is the impact of vendor consolidation (e.g. Oracle bought Peoplesoft and J.D. Edwards)? </li></ul><ul><li>How to attain strategic advantage with vanilla ERP (e.g. standard processes)? </li></ul><ul><li>What is the impact of ERP-2? </li></ul><ul><li>Does Best of Breed ERP reduce user resistance? </li></ul><ul><li>What is the ROI associated with Best of Breed ERP? </li></ul><ul><li>Do global standard processes make sense, given cultural differences, organizational climate, business climate? </li></ul><ul><li>Comparative analysis of Best of Breed vs. Vanilla ERP. </li></ul>

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