Day 3 Articles - OnurOzensoy

A Framework for Evaluating ERP Implementation Choices

-Although ERP systems usage are growing rapidly, for individual companies it is challenge to implement those systems. Most common failure reasons are exceeded budget, incompatibility between the company and the vendor/its software from cultural perspective, too comprehensive organizational change and necessity to improve and upgrade ERP and its infrastructure.
-Unlike traditional software, which is fitted upon any process, ERPs are more likely to urge the organization to change its processes in accordance.
-The crucial part is to determine a system customization vs. business adaptation /re-engineering point to decrease costs, time, applicability etc.
-ERP system "best practices", which are processes dictated by he software upon business processes, are not universal but country, culture, company specific. They are readily tailored for industry, though.
-Misfits between ERP capabilities, embedded "best practices" and company processes can be classified in three categories: data, process, output.
-Technical customization vs. process customization
-Technical customization may involve module selection. Since ERPs are modular softwares a specific company may select which modules to implement. This is, however, is not effective in fitting the system on business since it just provides a minimum number of alterations.
-It may involve table configuration. Without coding and leading to cease of vendor support, a company may determine what variables are for what and modify tables and hence table-driven ERP.
-Another option is code customization. This is done by changing the source code of software. The way a system communicates with others changes or a functionality may be augmented.
-Business process is a logical path that is performed to achieve a desired output by using company resources. These processes may also be customized to fit to ERP "best practices".
-If the process customization involves changes in tasks and/or resources, it is classified as "no change" and Little effort is necessary.
-In incremental change, relationships between tasks and/or between tasks and resources change but performance indicators or logic behind the process remain unchanged. TQM applications are examples.
-Radical changes, on the other hand, involve changes in the performance measures and/or logic.
-Capability to change processes is process change capability.
-First process change capability is about understanding current business processes and environments. Second is about designing and implementing new processes. Third is about managing and coordinating large-scale process changes.
-To find a optimum point in ERP implementation, the paper prepares a 3x3 ERP Customization matrix which combines process and software customizations.
-Technical Change capability is an organizations ability to modify the software.
-The first capability is about understanding the software and recognizing built-in options and modules. The second capability is about modifying an integrated large-scale software. The third capability is about the ability to manage large-scale software modification/development projects. i.e. matching and allocation necessary resources efficiently
-This combination of change choices and capabilities result in ERP Customer Evaluation Framework, which consists of another similar 3x3 matrix. This time indicating necessary human and IT(tangible and intangible) resources.
-The paper provides a case study which is an example of controversy to "conventional wisdom". Conventional wisdom states that firms should convert or re-engineer their processes to fit ERP best practices.
-Understanding ERP implementation as a series of projects.

Configuring an ERP System: Introducing Best Practices or Hampering Flexibility?

-Implementing ERP in non-systematic environment is very difficult. ERP implementation , ordering module in particular, will cut the flexibility and since flexibility in pricing is a strategic competency of PSDC, it should have been considered at the first place.
-In PSDC there was considerable resistance to change in sales department. It makes implementation even more difficult. We also see that key people from departments should be involved in the process to increase communication and define processes better.
-PSDC war team configured tables thoroughly to introduce some discount options that were normally not available but the process was difficult and it still did not satisfy sales people. But it showed that implementations can be a means of revising departmental strategies, procedures etc.