Implementing enterprise systems
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The document discusses enterprise system implementation. It describes the implementation process and potential pitfalls like lack of management commitment and inadequate budgets. It also covers post-implementation phases and "second wave" implementations to further improve systems. Case studies are presented on implementation at a company and measuring impact through order productivity improvements.
Implementing enterprise systems
- 1. www.handels.gu.se Johan Magnusson Centre for Business Solutions School of Business, Economics and Law University of Gothenburg Implementation 2013-08-29Centre for Business Solutions
- 2. www.handels.gu.se Agenda After the lecture, you will be able to: 1. Describe the implementation process 2. Evaluate potential pitfalls and risks involved in the implementation process 3. Explain the post-implementation and Second Wave phases of the ES lifecycle 2013-08-29Centre for Business Solutions
- 3. www.handels.gu.se Implementing Enterprise Systems • High risk projects • 80% fail to follow set budget and time, 20-35% are regarded as failures • Most common problems involve: – Lack of Executive Management Commitment – Insufficient or Inadequate Budgeting – Inadequate change management and training – Extensive modifications 2013-08-29Centrum för Affärssystem Ganly, D. 2008. Address five key factors for successful ERP implementations. Gartner Group
- 4. www.handels.gu.se Change Management • Multiple normative frameworks (7s, Leavitts diamant, 6 Sigma…) • John P. Kotter – Establish a sense of need – Form a powerfull alliance – Create a vision – Communicate the vision – Get others to act – Plan for and create short wins – Consolidate improvements – Institutionalize new practice Kotter, J.P. 1995. Leading Change: Why transformation efforts fail. Harvard Business Review, Mar-Apr.
- 5. www.handels.gu.se Business Process Reengineering • Michael Hammer (1989) • Don’t automate, obliterate! • 1993: 65% of Fortune 500 • Excuse for down/rightsizing • Severely questioned • Contributed to an increased focus on processes • ”The fundamental ret-hinking and radical re- design of business processes to achieve dramatic improvements…”
- 6. www.handels.gu.se Introducing a new system • Installation and implementation • Two sides: technology and processes • Technology can be used as a battering ram • Large projects should be divided into smaller ones • Project and change programmes • Big bang or Phased
- 7. www.handels.gu.se Case: Implementation at Hestra Inredningar AB 2013-08-29Centre for Business Solutions
- 8. www.handels.gu.se Learning points • Consider change • Engage the sub-process owners • Focus on processes • Create process maps that are living documents • Strive for continuous improvements • The implementation is just the first step 2013-08-29Centre for Business Solutions
- 9. www.handels.gu.se A possible framework: ERP Scorecard • Developed for SAP 2004 • Sold exclusively to SAP 2004/2005 • Targeted for SME Magnusson, J. ; Nilsson, A. ; Carlsson, F. (2004). A conceptual framework for forecasting ERP implementation success : a first step towards the creation of an implementation support tool. International Conference on Enterprise Information Systems. Management Strategy Leadership Support Competence Project Team Management Plan External Organization Culture Change Process Communication System Technology Education Users Empowerment
- 10. www.handels.gu.se The investment 2013-08-29Centrum för Affärssystem Do we let go too soon?
- 11. www.handels.gu.se Post-Implementation • Why would you actually want to change your system? • Added value through cosmetics, 3rd party suppliers and continued training • Very few good examples of initiatives to drive the return of the investment ex-post. • Benefits realization could be extended further than to the post- implementation meeting 2013-08-29Centrum för Affärssystem
- 12. www.handels.gu.se What happens after the implementation? • The organization is tired • Exit the Consultants • Maintenance • Retreat and hybrid routines • No more rewards… • Status Quo 2013-08-29Centrum för Affärssystem
- 13. www.handels.gu.se Organizational change • Institutionalize the change • Are we programmed for continuous change? • Do we have the energy to continue? • Do we have the guts to continue? • Can we find support for additional investments? 2013-08-29Centrum för Affärssystem
- 14. www.handels.gu.se Post Implementation Evaluation (PIE) • Ex-post evaluations are dubious • 20% of IT-related projects • Counter arguments – ”No impact…” – ”Obvious results…” – ”Hard to find data…” – ”Hard to find benefits…” – ”Hard to find the resources and time…” – ”Hard to find a base-line…” – ”It will be embarassing…” – ”Then the benefits will be realized…” 2013-08-29Centrum för AffärssystemGwillin, D., Dovey, K. & Wieder. (2005). ”The politics of post-implementation reviews”. Information systems journal, 15: 307-319
- 15. www.handels.gu.se Research Note: How can we measure impact? • Framework developed by researchers, analysis conducted by Master thesis students • Five Wholesalers, two years order data • Post-implementation focus • 3% mean-improvement in order productivity • Read more: Ask et al. 2011 2013-08-29Centre for Business Solutions 0.000 50.000 100.000 150.000 1 3 5 7 9 11 13 15 17 19 21 23 Ledtid,index Tid Ledtidsutveckling alla företag
- 16. www.handels.gu.se Second Wave Implementations • Investments in securing benefits from previous investment • Initiatives to: – Increase the usage – Increase the usability – Increase the scope of the ES – Adding of additional functionality – Adding of additional integrations – Re-design of processes 2013-08-29Centre for Business Solutions
- 17. www.handels.gu.se Research Note: Second-wave measurements • Study to be conducted… • Large Packaging solution company • ERP Go-live June 2009 • All data from the business opportunity-to-offering process for the first year • Complemented with Margin Index and Hit-rate • Study of Productivity and Efficiency • Second-wave project November 2010-January 2011 • Re-take on PI-study after Second- wave 2013-08-29Centre for Business Solutions
- 18. www.handels.gu.se Recapitulation 1. Describe the implementation process 2. Evaluate potential pitfalls and risks involved in the implementation process 3. Explain the post-implementation and Second Wave phases of the ES lifecycle 2013-08-29Centre for Business Solutions