What is an Enterprise Wide Application? Introduction and principles Based on Chapter 1 in Adam, Frederic and Sammon, David (2004) The Enterprise Resource Planning Decade: Lessons Learned And Issues For The Future, Idea Publishing Group, Hershey, PS.

Enterprise Wide Applications As the name indicates… Keywords: –….

Enterprise Wide Applications As the name indicates… Keywords: –Integrated –Centralised –Best practice –Cross functional –“mega packages” –Costly (inc. hidden costs) –Highly complex –High impact on business

Definition No simple definition American Production and Inventory Control Society (APICS) an accounting-oriented information system for identifying and planning the enterprise- wide resources needed to take, make, ship, and account for customer orders Transaction-oriented / operational

Family of applications Enterprise Resource Planning systems Supply Chain Management Customer Relationship Management Other more specialised applications such as planning, warehouse management … Merging into ERPII / XRP –encompassing all aspects of the business

CRM Early 00’s Sales Force Automation Contract Management Customer Service & Support Marketing Automation Documentation Management SCM Logistics Electronic Invoicing Electronic Marketplaces Contract Management Late 90’s Early 00’s ERP II Product Data Management Engineering Change Orders New Product IntroductionCollaborative Product Design A Complete Family Tree

XRP - Overview of modular design

ERP Family history (brief) As old as Fred under a variety of names “ERP” name early 90s Definitely “here to stay” ERP creates a level of dependence that “far surpasses the dependence associated with prior technological regimes”* ERP related expertise is in need in most firms * Markus, M. L., & Tanis, C. (2000). The Enterprise Systems Experience — From Adoption to Success. Claremont, CA: Claremont Graduate University.

Software characteristics Modular Centralised – single instance model Reliant on large database (eg: oracle) Web based interface Robust but inflexible Configurable rather than customisable Very dependent on data entry

Key modules

Goals of ERP implementations Standardisation / centralisation Control – eg: integration of financial data End fragmentation of legacy systems More visibility on key processes Optimisation / productivity gains Competitive advantage? Platform for other projects = infrastructure / backbone Mechanism for integration of latest technologies (eg: RFID)

Other strong points No more uncoordinated applications – eg quality control No more re-keying Solution to reporting problems across the board “Sorting out” HR Harmonising nomenclatures – eg: product codes, inventory files …

Problems with ERP Impact on business processes (eg: flexibility) Understanding the “fit” problem Doubtful benefits realisation (50% failure rate?) –Measurability –True origin of benefits Impact on firm in wider sense –People –Clients / suppliers / partners… Cost / disruption factor –$ –Time –Learning curve Coping with evolution (version control)

The Tower of Babel

Gorry and Scott Morton (1971) “The integrated management information systems ideas so popular in the literature are a poor design concept. More particularly, the integrated or company wide database is a misleading notion and even if it could be achieved, it would be exorbitantly expensive” Gorry A. and Scott Morton. M. (1971) A Framework for Management Information Systems, Sloan Management Review, Fall,

Dearden (1972) “The notion that a company can and ought to have an expert (or a group of experts) create for it a single, completely integrated super-system - an MIS - to help it govern every aspect of its activity is absurd” Dearden, A (1972) MIS is a mirage, Harvard Business Review, January / February

ERP Stats Market dominated by 4/5 vendors though listings show 50+ SAP (around 30%), JD Edwards/peoplesoft, Baan, Oracle, MAPICS… SAP alone: 19,000 customers in 120 countries, adding up to 12 million users in 65,000 sites. This number of firms cannot all be wrong!