Day 3 Articles (Serkan Kocak)

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

The photographic supplies distribution company is trying to install J.D. Edwards ERP system.

- The core team composed of 8 members and its first duty was to analyze business, specifying all business requirements and research an appropriate ERP package/provider
- It is hard to customize existing system and also existing system was no longer supported those are some of the reasons of changing system.
- In order to keep the task manageable, the team worked one module at a time (to have successive starts before the previous modules went live).
- First three modules took 14 months and six months for 4th one Order Management.
- Because of the complex workflow in ordering and also fair degree of flexibility of JD Edwards, it is hard to implement order module.
- Tom thoughts that if just a conceptual model is needed for pricing than accounting people can do pricing no need for marketing but then he also states the importance of marketing to decide prices.
- Pricing matrix taken out from the meeting with marketing but it is not agreed that JDE is good enough to use it in a no disciplined and no controlled area.

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A Framework for Evaluating ERP Implementation Choices

- By appropriately modifying both the ERP system and business process can be result as good implementation of the system. Sometimes software some times process needed to be changed
- Successful ERP implementation requires fit between ERP system and business process.
- Adaptation of the organization to the ERP system is also very important to have a successful implementation. Associated organizational changes should be done because ERP systems change the ways of doing jobs.

When the system is customized to fit the process = Technical Customization

Technical Customization
- Module Selection: Companies choose modules to be used, provider adapts modules to the system
- Table Configuration: according to organizational needs the chosen table types adapted to the system
- Code Modification: In order to satisfy required functionalities the source code of ERO system is changed
Module to Code; risk, and cost increase, it is not guarantied that there would be improvements.

Process Customization
- No Change
- Incremental Change : improvements only in tasks and resources
- Radical Change: fundamental rethinking and resign of some parts of business process.


ERP Customization Choices
- No Customization
- Process Adaptation
- Process Conversion
- Fit System to Process
- Mutual Adaptation
- Fit Process to System
- System Conversion
- System Conversion and Process Adaptation
- System and Process Reengineering
o Table II Customization Choices (pg 326)

Technical Change Capability
- Overall ability to customize ERP
- Understanding of default ERP system
- Ability to develop and modify large-scale software in a networked database environment
- Organizations ability to manage large scale systems development projects
o Tech. Chan. Cap. Consists of scope and depth of its ability to understand ERP

Process Change Capability
- Ability to customize business process
- Ability to design new or changed business process
- Organizations must be capable of large scale business process changes

Overall Capability
- Combination of technical change capabilities and process change capabilities, so that the total of capabilities that are explained up to now.