Week 6 - Enterprise systems

Question 1

ERP system is a packaged business software that: (4)

Answer 1

1. automates and integrates the majority of business processes within an organization
2. enables sharing data and common practices across the enterprise
3. provides real-time access to information
4. ERP integrates all departments and functions across a company into a single computer system

Question 2

The functions of IS in an enterprise (5)

Answer 2

1. Sales
2. Accounting
3. Logistics
4. Procurement
5. Human Resources

Question 3

Progression from traditional to ERP (4)

Answer 3

IT structure within companies:
1. Traditionally: IS support individual business units
2. ERP: Integrates information from all business units
IT sourcing:
3. Traditionally: IS were developed in house or by order
4. ERP is off-the-shelf software

Question 4

History of ERP (4)

Answer 4

1. 1960s: inventory management & control
2. 1970s: MRP
3. 1980s: ERP
4. 1990s: ERP 2 (cloud-based)

Question 5

Initial Investment (2)

Answer 5

1. Large companies: $100m-200m

2. Small companies: $ 1m

Question 6

Cost breakdown (5)

Answer 6

1. Consulting (30%)
2. Hardware (25%)
3. Software (15%)
4. Deployment team (15%)
5. Training (15%)

Question 7

How long does an ERP implementation take?

Answer 7

1-4 years

Question 8

Benefits from ERP systems (7)

Answer 8

1. Inventory reduction
2. Personnel reduction
3. Productivity improvement
4. Order Management improvement
5. Financial close cycle reduction
6. IT cost reduction
7. Procurement cost reduction

Question 9

ERP Challenges People (3)

Answer 9

1. change management
2. training
3. staff adequacy and training

Question 10

ERP Challenges Process (2)

Answer 10

1. process reengineering

2. requiring ongoing support

Question 11

ERP Challenges Technology (2)

Answer 11

1. Software functionality

2. Upgrades

Question 12

SAP (2)

Answer 12

1. SAP: systems applications, products

2. ERP has over 10 core modules: finance, HR, e-commerce, analytics, banking, project management…

Question 13

Oracle e-Business Suite

Answer 13

Includes Oracle database, CRM , financials, logistics, order management, and warehouse management systems

Question 14

Microsoft - Microsoft Dynamics (2)

Answer 14

1. aimed at smaller companies

2. Includes accounting, finance, HR, and CRM modules

Question 15

To customize or not?

Answer 15

1. ERP is essentially about integration and standardization

2. despite “best practices” built in ERP and business processes may not fit

Question 16

Configuration (2)

Answer 16

1. Configuration possibilities range from module selection, master data provision, to adjusting access rights for different users
2. These configuration settings cover anticipated variability

Question 17

Customization (2)

Answer 17

1. Customizations are source code-based adaptations

2. unanticipated variability

Question 18

Vanilla implementation

Answer 18

use system modules as intended (no customization)

Question 19

reasons to consider vanilla implementation (4)

Answer 19

1. relatively straightforward business practices that are not unique
2. no skill or experience in building or changing systems
3. all branches of the business run the same version of ERP in a single instance, and enter and retrieve data in a similar fashion
4. Standardizing: integrating process and IS’ at an enterprise-wide level is less complicated when modules have the same version, without mods

Question 20

Which sort of business can choose for Customization?

Answer 20

Business that do have highly skilled IT developers and a proven development process, can change the system to match the processes (e.g. code; interfaces; screens)

Question 21

Customization Benefits

Answer 21

Helps minimizing the risk of a project failure

Addressing organizational change may require modifying the system in order to meet the needs of the business, and will help to minimize risk of project failure

Question 22

Drawbacks of customization (3)

Answer 22

1. In case of an upgrade, each modification will need to be analyzed to see if it needs to be incorporated or not
2. An upgrade can turn into a re-implementation, which requires more resources and time
3. Much of IS literature suggests: no customization

Question 23

Package-Organization Misalignments

Answer 23

Even for companies that follow “best practices”, vanilla implementation is often not feasible

Question 24

Siah and Soh’s Research Objective (2)

Answer 24

1. Provide a theoretically grounded framework for systematic assessment of the extent and severity of misalignments
2. Understand when customization and when organizational adaptation is more appropriate to resolve misalignments

Question 25

Institutional theory (3)

Answer 25

1. Siah and Soh (2007) used institutional theory and systems ontology 2. misalignments arise when institutional structures in packages differ from those of the implementing organizations 3. Ontology as a branch of philosophy that is used to describe the nature of these institutional concepts, and can be used to study misalignments.

Question 26

Imposed Structures

Answer 26

are the result of external demands made one the organization by authoritative sources such as government, professions, and established industry practice

Question 27

Voluntary Structures

Answer 27

developed as a result of an organization's history and experience, strategy, and management preferences

Question 28

Ontology and misalignment (2)

Answer 28

1. Premise: for an information system to be stable, its structure must represent a "good" mapping to the real world it seeks to model 2. From an ontology perspective, misalignments are instances where crucial aspects of the real world are not adequately represented by the model embedded in the package

Question 29

Deep-structure misalignment

Answer 29

1. Deep structure conveys the core meaning of the real-world system that the information system is intended to model 2. Deep-structure package-organization misalignments 3. db structure of children's hospital > mother and child

Question 30

Surface-structure misalignment (3)

Answer 30

1. Surface structure is concerned with how real-world meanings are conveyed through the interface between the information system and its users 2. surface-structure misalignments arise when the way users in the real world use information, differs from the interface 3. customer service need to see client transaction and past transactions on the same screen

Question 31

Imposed-Deep

Answer 31

missing or inappropriate thing, property, state or transformation arising from different country or industry assumptions

Question 32

Imposed-Surface

Answer 32

Missing or inappropriate access, input, presentation, or output arising from different country or industry assumptions

Question 33

Voluntary-Deep

Answer 33

Missing or inappropriate thing, property, state, or transformation arising from organization-specific assumptions

Question 34

Voluntary-Surface

Answer 34

Missing or inappropriate access, input, presentation, or output arising from organization-specific assumptions

Question 35

Imposed-Deep Example (critical)

Answer 35

Failed SAP implementation at Fox Meyer partly attributed to critical mismatches between an early ERP system designed for manufacturing but implemented in a wholesale business

Question 36

Imposed-Surface Example (less severe)

Answer 36

Non-negotiable external requirements preclude changing organizational requirements to conform to the package > reporting format for compliance

Question 37

Voluntary-Deep Misalignments (can be modified, but takes effort)

Answer 37

Hershey hired temporary storage for dealing with cyclical demand for candy. The ERP implementation cost Hershey $150 million in lost sales because the temporary storage locations were not represented as storage entities in the EPR's data model

Question 38

Voluntary-Surface (relatively mild)

Answer 38

e.g. management reporting formats; habits

Question 39

Siah and Soh results (4)

Answer 39

1. The majority of imposed-deep were resolved via package customization 2. Imposed-surface and voluntary-deep misalignments were more often resolved via organizational adaptation 3. Voluntary-surface misalignments are almost always resolved via organizational adaptation 4. the extent of project success also appeared to be influenced by the number of misalignments and the proportion of imposed-deep misalignments