Lessons Learned, Week 2

Decision on whether to use ERP:
- The initial need for ERP arises from several reasons such as; growth in the company, current systems not handling the load, increase in business complexity, to improve processes and to reduce costs, to increase financial control, to obtain better information about operations, for accounting purposes, or as a system to maintain data integrity with increase in efficiency.
- On the other hand, some companies may prefer not to implement ERP due to the following factors: resistance to change, high costs of implementation and additional modules, high development and integration costs, ERP implementation is not in line with company strategy, the company has its own compatible software, costs do not justify the benefits, or company does not have enough staff to work on ERP implementation project.

Success of ERP: 80 percent of ERP projects fail in implementation phase, meaning they do not meet one of the following 3 criteria for success: meeting the needs and requirements of customers, meeting the budget, meeting the timeline.

ERP vendor firms are now moving on to Europe, Middle East and Asia because US market is in maturity phase now. They initially target larger and medium sized companies but they will move toward smaller sized firms in time.

There are 2 main potential analyses before deciding to implement ERP: SWOT and GAP Analysis. SWOT Analysis is about strengths& weaknesses of the company(internal analysis)and opportunities& threats in the environement that the company operates(environmental analysis). GAP Analysis involves both business and technology analyses, is about where I am (as-is), where I want to be and how can I go there. ERP is a possible resource to move on to the target situation. GAP analysis is related to Enterprise Architecture (EA) concept developed by Zachman.
- EA is the analysis and documentation of an enterprise in its current and future states from a strategy, business and technology perspective. It helps to integrate and manage IT resources from a strategy and business driven viewpoint.
- From the EA Cube Framework options, it is important to choose the one that is the most understandable. Also its components should be checked to see if it fits your company’s strategy and structure. Also the level of detail should be in line with company needs.

EA and ERP comparison:
- EA and ERP are not competing applications; EA can help you decide if ERP is beneficial for your firm.
- Both EA and ERP need change management, strategy alignment, and continuous maintenance activities (ERP involves adding new modules in time, EA should also be reviewed periodically.)
- Both EA and ERP need insider information as well as external expertise to implement.

Business Involvement in ERP:

- To provide resources and show commitment, putting corporate VP’s and functional sponsors in project steering team is important.
- Business process owners who are responsible in business processes and who has right to change business process, should be employed.
- Successful people within organization should be trained first and used as internal consultants in training other employees. (these people are called super-users)
- Some workers should be assigned as role profile owners, approving security requests and deciding who has access to what information.

Organizational Change Management:

- ERP Organizational Change management has 5 initiatives which are; training, business process procedures, communications, super-user development and security/role development
- About 25% of ERP budget should be spent in change management
- EA organizational change management initiatives include; top supervision, training and communication.

BilkentMBA2010, Lessons Learned- Week 2

During the second week of the class, we discussed the reasons why companies need an ERP system, and when they should not implement the system. In addition, we talked about the potential analyses to be done before a company decides whether to implement an ERP system or not. Moreover, we learned about the concept of enterprise architecture.

A company may need to implement ERP system because of the below reasons:

· Growth

· Current systems are not enough to handle the load

· Higher complexity

· Opportunities for higher efficiency such as improving the process and reducing costs

· Competitive environment that requires your company to have an ERP system (Supplier/client requirements)

On the other hand, a company should not implement ERP system if:

· the strategy of the company is not in line with the ERP,

· there is a resistance to change in the company,

· the company needs will not be met with the existing offer and implementing the system will lead to incur high development and integration costs,

· there are cheaper and easier alternatives that address the needs of the company.

“Success” in ERP means that the system meets the customer expectations. This includes meeting the functionality needs and requirements, the budget, and the timeline of the project.

A company needs to apply below potential analyses to decide on whether to implement an ERP system or not:

· SWOT analysis- Strengths, Weaknesses, Opportunities and Threats. This analysis should be done to understand general situation of the company. Also note that strengths and weaknesses are internal company features whereas opportunities and threats address external issues.

· GAP analysis- It is recommended that companies should use this analysis to identify the technological needs of the company. Basically, this analysis shows where the company is and where it is desired to be. Then the companies may assess how to address those needs to fill the gap.

Moreover, Enterprise Architecture (EA) allows companies to determine the way to achieve future objectives by examining processes. There are two big names that brought EA- Zachman and Spevach.

ERP is a system but EA is a process, methodology, and a framework. ERP is an end result of a strategic planning. However, both of them require strategy management, integration, maintenance, change management, insider information from the people who use it, and top management support and commitment. In addition, EA should be implemented by business people, Process Owners, who have the authority to change managerial decisions, rather than IT personnel because of several reasons:

· IT personnel may miss the strategy and only focus on the technological aspect.

· IT personnel may not know the business processes and the problems.

Also, it is important that the consultants and process owners work together to enhance the knowledge transfer. Moreover, teams should have someone from the executives ie. VP, since they work as an intermediary between the team and the top management, are helpful in getting resources, and a way to show that the company supports the project.

Change Management both in EA and ERP is important and 20% of the total budget should be allocated. It should involve training the staff, business process procedures, communicating the reasons of the implementation, security/role development, and super user development. (Super users are the staff that you train before everybody to use them later during the change management period as a trainer and as an internal consultant.)

BilkentMBA2010, Elevator Speech, Derya Kaya

This is Derya Kaya. My background is Industrial Engineering and I am working as QA engineer at the space sector. I am in love with space&quality!!! I have worked as intern at one of the leader companies at space business in Europe, Saab Space AB which has been acquired by RUAG then. I am currently working on a space project that is the first space project with its features in Turkey and I am the only one Industrial Engineer taking role on the project.
Personally, I never give up if I believe myself that I can be successful in doing the job. I think this is similar to space projects: if there is failure, you should not stop to work; you should try till you have succeed because in the end you have great result that is very impressive to your employees, to your managers, to anyone in your company and of course to your country.. I am open-minded person and have passion..
Would you like me to be part of your organization and add value to you? If yes, please contact me by my mobile number.

BilkentMBA2010, Elevator Speech,Week2

Hi, I am Nurcan Bozkaya. I help companies to do their production processes
much more effiecient by optimizing them. Thus, they increase their profit
margins and stengthened their competitive strength and place in the market
share.
Would you like me to optimize your workplace?

BilkentMBA2010 Lessons Learned Week2

We learnt that what are the inital needs of an implementation phase of ERP systems and why does a company needs an integrated system?

The initial needs of a company before implementation of an ERP system are,

- Aim of growth

- Current systems’ incapability of handling the loads

- Higher complexity

- The opportunities to improve processes and reduce the costs

- To improve the financial control of the company

- Have a better information about the processes

- Share information between departments easily

- To gain competitive strength

- Data integrality

Why should a company not implement an ERP system?

- Resistance to change

- May be the strategy of the company is not in the line with ERP, the need of company can met with a cheaper alternatives

- The cost of implementing an ERP system is so high

- Implementing an ERP system may not met the demand of the firm

- May be the organisation is not ready to implement such a system

- Company may not want to grow anymore

What is the success of company?

Success means the customer satisfaction:

-how you meet the requirements (recuirement functionality),

-how you meet the budget

And how you meet the timeline

What should be done before implementing an ERP system?

Some analysis should be done before implementing an ERP system. These analysis are,

GAP analysis; this analysis determines that where I am as a company now? And where should I be as a company? AS-IS and To Be sitiuations.

SWOT analysis; Strengths, weaknesses, oppurtunities and treatments of the company. Oppurtunities and Treatments form the external environment of the company and Strengths, weaknesses form the internal environment of the company.

Elevator speech; we can also use the elavotor speech to improve the companies benefits.

KEIRETSU: the way that Japanese organisations work. In this concept suppliers of the company work closely with each other.

Organisational Change Management:

%20 budget should be allocated to Organisational Change Management since Organisational change management is an initiative that aims to improve the success of the company.

There are 5 different needs for Organizational Change Management:

-Training; employees should be trained fort he new system adaptation.

- Business Process Procedures, documentations of processes should be managed

-Super user development: Super users are the workers who are trained earlier for helping to train his/her Colleagues . This users should be good at communication skills.

-Communications, for achieving the success we should be sure about all of the employees understands the ERP concepts , since misunderstanding can cause to failure.

-Security and role development; there should be given an authorization to the employees not any more then they need on the system.

What is the difference between the concept of Enterprise Architecture and ERP Business Case?

They are not the same concepts, but they complement each other. EA is a framework for strategy, business and technology planning. ERP systems are tools for integration that EA helps to meet the requirements and achieve strategic goals.ERP implementations should be ERP planned in the context of EA management since EA concept helps to reduce the risk of ERP implementation failure by using some tools to view the current and future conditions. EA is a complementary of ERP system. It makes you see the gaps of ERP implementations. First we should apply the EA concept then decide whether ERP could be the solution system or not. ERP system can be used to support the strategic plans but in fact, ERP should be the reason of the strategic plans.

EA concept was put forward by John Zachman in 1987 and 5 years later Spewack published a book about this concept.

How would we choose EA type?

Zachman’s type of EA, EA^3(Scott Bernard’s concept) and the company should choose the EA type which it fits with company’s demands, also which can be applicable for that company. Additionally the level of detail should also be concerned.

BilkentMBA2010, Elevator Speech, Week 2

Sir, I have always been into learning new things, trying to be as much multi-faceted as possible. My idustrial engineering education with a focus on management and innovation also sparkled my entrepreneur side, leading me to get a patent for one of my ideas and developing a biz plan for it. I've worked in four different industries as a trainee in summers to learn about the industry as much as possible. Considering all these, I realized I was tailor-made for consulting and started working in a consulting company on business managment software implementations. After nine months full of projects providing me valuable insights on different industries, I was promoted to a special project on entrepreneurship and business plans before leaving for my military duty. All these led me to top my experience with an MBA degree to fill the gaps for the perfect consultant.

I wish I could have the chance to utilize my skills and knowledge for a consulting position, this is your floor, this is my biz card and thank you for your attention and I am looking forward to hearing from you:)

Lessons Learnt - Week 2

To ERP or not to ERP

Why does a company need ERP?

The need for ERP can be driven by several factors. Some of these reasons include:

• Company growth
• Current systems are inadequate
• Changes in competitive environment
• Company needs better internal controls
• The need to share information

Why shouldn't a company implement ERP?

• Costs – upfront, ongoing and hidden costs.
• ERP is no aligned with company strategy
• Company’s needs can be met with a cheaper or easier solutions (can the same task be performed with Excel?)

Tools to help help decide whether to implement ERP:

• SWOT: Strengths, weaknesses, opportunities, threats. This analysis will help a company to better understand its internal and external environment; from this, the need for ERP may be identified.
• GAP Analysis: Current performance vs. desired performance. By using this tool, companies my first identify the current situation of the business vs. the desired position of the business, and then undertake and assessment of options and strategies to get from one to the other. Companies should ask: is ERP the answer to get the company to where we want it to be?

In deciding whether to implement ERP, the final decision criteria should be: is there a strategic need?

What defines a successful implementation?

And implementation is successful when the customer’s expectations are met or exceeded:

• System meets requirements
• Is on time
• Is on budget

Enterprise Architecture

What’s the difference between EA and ERP?

EA is a framework; a tool for strategic planning

ERP is a system; a tool for integration

Both are business initiatives and not IT initiatives. It is unwise to allow IT to oversee the implementation of these projects as IT often does not fully understand the business processes, the project may not get the proper support it needs, and many levels of the organisation may not see the strategic value of the project.

Selecting an EA framework:

A company should pick a framework that...

• It understands
• Suits the business type
• Has an appropriate level of detail

Change management:

In both ERP and EA, change management is essential. This critical section of the project requires approx 20% of the overall budget.

ERP change management includes:

• Training (staff need to know how to use the new system)
• Business process procedures (development and management of the migration from old to new processes)
• Communications (making sure everyone knows the systems, how it works, why it is being implemented, and the strategic value of the new system)
• Security and role development (ensuring the protection of sensitive data)
• Super user development (training key employees who will be champions of their functional areas. they will serve as internal trainers themselves, and as go-to help for others that need assistance with the system)

In EA, excluding the need for security and super users, the areas of change management are similar.

Both EA and ERP requite support from the top levels for change management to be effective.

BilkentMBA2010, Lessons Learned, Week 2

This week, we are taught about building the ERP business case and the concept of Enterprise Architecture.

• The initial need for ERP originates from company growth, current systems not handling the load, higher complexity of operations, to improve processes and reduce costs, collecting better information about processes etc.
• There are also reasons NOT to implement an ERP system: high resistance to change, high integration and development costs, being not in line with company strategy, problem can be solved with cheaper alternatives etc.
• Success means customer satisfaction in business basically. This passes through meeting their needs, within the budget and appropriate time.
• ERP is a good market since because most top 500 companies already have ERP systems, the market goes towards medium-sized companies.
• Before implementing ERP, analyses should be made like SWOT, GAP, ...)
• We talked bout GAP analysis and then Enterprise Architecture, critical success factors.
• With GAP analysis, we can determine the current situation (as-is) and the future system (to-be). The difference between the two is the GAP, and it could be filled in some ways. ERP implementation could be one of the ways.
• I learned Japan's "Keiretsu" concept, working with their suppliers.
• Enterprise architecture: Zachman invented it, Spevack studied it further and made it more basic. U.S. federal govt. implemented its own architecture and applied widely.
• We discussed whether EA and ERP are competing solutions or not. EA finds out the gaps, ERP might be ONE solution. But they have common points.
• Process owner: The responsible of a business process. They are mostly seniors in the company, and they can proopse changes in the process.
• Power user: The users that are trained before the others. This is a part of change management. They must have good communication skills.
• Role profile owner: Decides on and arrange who accesses what in the system.
• 20% of the ERP implementation budget should be allocated to change management.

Elevator Speech

Oh hi, didn’t expect to see you here...

... my name’s Peter. I wouldn’t normally introduce myself like this, but i’ve been wanting to meet you for a long time. I’m a marketing, economics and finance graduate with extensive experience in magazine publishing, and I really think I could help you and your company. My first love is marketing, but I’m also great with numbers – words and design is my passion, but I’ve made sure to learn the business fundamentals to support that.

I’m dedicated, loyal and hardworking, and I know my skills and my enthusiasm would be a good fit for your organisation. Here's my number, just let me know when you want me to start.

BilkentMBA2010, Lessons Learned, Week 1

The first week was an introduction to the ERP systems and some providers of them.

• ERP systems are categorized into major ("best practice", less development expenses), smaller (simpler processes, niche software, lower price) and open source (free licensing, high security, accessible to community) ones.


• BPR stands for business process re-engineering, which is done for improving processes.


• Each SAP module has its experts, like FICO (finance and controlling), One consultant cannot be an expert of all modules. These consultants could be for implementation or for ongoing maintenance.
• The concept of audit trail: anything you do in the system is tracked with your user-ID.
• GIGO: Garbage in - garbage out.

Cemil Kanat Sarısoy Elevator Speech

Hi.. a perfect day for a negotiation.. and I have one.. I negotiate with myself in various subjects during the day for improving new negotiation techniques. I think that if one finds the formulation to negotiate with oneself, he/she can catch the core of success in this job. I am Cemil, a marketing man tries to establish special and effective negotiation approches on making business and works to be more skilled for applying new styles. Then, what projects are on your plate at present?

Bilkent MBA2010, Elevator Speech , Week 2

A possible elevator speech of me for a research and financial consulting firm would be:

“I am a graduate of Bilkent University’s management department and have 4 years of working experience in banking sector. I worked in the Headquarter of one of the top private banks of Turkey. Adding into it my expected MBA degree from Bilkent University, I have refreshed my knowledge in the area and added new knowledge and skills. As a person who combines wide variety of skills such as foreign language proficiency, computer skills, as well as research, analyzing and teamwork skills; I believe I will create a difference for your company. In the bank sector related consulting projects that your firm specializes in, or in research oriented projects I can benefit your company with those mentioned skills and my detailed industry and management knowledge.”

Elevator Speech, Seray Ozturk

Here is my elevator speech to give to an executive who has authority to offer me a job in United Nations.

I would like to be a part of a project that aims for environment and sustainable development while increasing the long-term quality of life of its recipients. I am equipped with both engineering and business knowledge due to my bachelors degrees in industrial engineering and statistics from Lehigh University, and MBA from Bilkent. In addition, I have gained organizing, coordinating, and managing skills in my past work experience in Garanti Bank headquarters. Currently, I am interested in social entrepreneurship and aim to work on the subject academically. However, prior to my academic studies, I would like to obtain hands on experience in order to understand and feel how international non-profit organizations run socially responsible projects. I believe, my interest towards sustainable socially responsible projects will strengthen my enthusiasm to succeed in this project.

BilkentMBA2010, Lessons Learned, Week 1

The ERP software as we know it today progressed from simple inventory systems, then to MRP (material resource planning), MRPII, ERP, and ERPII.
Basically ERP has MRP functionality in its core, with addition of other modules such as HR, and a financial system binding everything together.
I think it is important to know how ERP progressed because all new ERP features still serve the purpose of effective use of company resources. For example, some argue that CRM is not a part of ERP, but if you think of it as a system of managing company’s most valuable resource – its customers – that it definitely is.
ERP system providers can be divided into Major Players (SAP, Oracle), Smaller Companies (Epicor), and Open Source. Each have their own advantages:
• Major Players represent best practices in the industry
• Smaller Companies support simpler processes and provide niche solutions
• Open Source is free
I think it is important when choosing and ERP not to concentrate on particular features, but try to understand the overall impact. For example, Industry-Specific Solutions are required because different industries use different business processes. Business process reengineering – increasing effectiveness of processes can be coupled with ERP implementation to gain results.
In the end, successful implementation depends on consultants more than on the choice of system. Consultants may specialize in particular modules. It is best to pair one functional and one technical specialist for each module.