The Relation between BPR and ERP Systems: A Failed Project Chapter XI The Relation between BPR and ERP Systems: A Failed Project David Paper, Kenneth B.Tingey, Wai Mok

Executive Summary Vicro Communications (pseudonym) Reenginering its basic business processes With the aid of data-centric enterprise Relying completely on the software Software might increase: Information sharing Process efficiency Standardization of IT Data mining /warehousing capabilities

Executive Summary Management made no attempt to: Rethink existing processes before implementation of the software Obtain feedback from employees familiar with existing business or legacy systems For Vicro, reengineering effort failed even after investing hundreds of millions of dollars Software is currently being phased out

Background International provider of products and services that help companies communicate through print and digital technologies Leading supplier of document formatted info.,print outsourcing and and data based marketing Vicro designs, manufactures and delivers business communication products, services and solutions to customers

Background Operates over 100 warehousing facilities Nearly 14000 employees serving 47 countries 2.45 bil in 1999 and 2.26 bil in 2000 revenue Provides consulting, proj. management, reenginering and distribution of high volume, customized communications to its clients Latest print and digital technologies Market leader in managing critical business communications

Setting the Stage A conservative organization It doesn’t embrace “bleeding edge” tech. Wants to deploy proven tech. that will help satisfy and exceed customer requests and expectations Experimented with business process reengineering(BPR)

Literature BPR as a savior of underperforming organizations BPR as next revolution in performance via process improvement and process change Flawed BPR strategy: Inappropriate use of consultants Workforce tied to old technologies Failure to invest in training Legacy system out of control

Case description Virco Communications under-performing BPR efforts would be facilitated by data-centric enterprise software Vicro chose 30 years software Legacy systems were never considered Stakeholders wanted to complement BPR with IT Vicro made no attempt to align business propcess changes with business objectives

Data Analysis Formal and Informal Interviews Common Patterns /Themes General Theme : Breakthrough technology in the BPR process

Data Analysis Interview Use of Computers Use of HPT (High Profile Technology) Manufacturing systems Project Manager Ron Dickerson

Technology Usage PCs and Mainframes Data Collection Storage Reporting Communication Data-Centric problem solving

Process Improvement Relationship between BPR and Technology No Design for new processes Not Redesigning existing processes No match between enterprise software and best practices

HPT Adoption HPT was not flexible enough Mismatching the existing processes Legacy systems are still in place HPT doubled the activity HPT was not user friendly 20 modules in HPT HPT was not customizable

CEO Mandate Change of Leadership HPT forced everyone to use a standard No real experience with BPR Invest Much NO RESULT No look at the state of the existing processes Change of Leadership

Enterprise Integration HPT did nothing to facilitate enterprise integration. Invest on HPT instead of Rethinking the business

Resistance to change HPT was forced No punishment No one have the power to tell what to do Pontificating that HPT will be the standard HPT was so inflexible Account payable (AP)

Current Challenges Top management had no plan! Top management delegated BPR Top management trusted the software vendor Not involving people and resistance to change Forcing “Best Practices”

JUST AP MOST EXPENSIVE 280$ million Complete Failure! Current Situation JUST AP MOST EXPENSIVE 280$ million Complete Failure!

Contribution to BPR literature Super Themes Immersion Technology usage, HPT adoption Fluidity Responsiveness, Effectiveness, Knowledge sharing & capture Top management support

Summary See if processes and systems are fluid Obtain feedback Communicate to management Main reason for failure Business processes are not streamlined Forced HPT

Developing an Information System Solution Define and Understand the Problem Develop Alternative Solutions Choose the Best Solution Implement the Solution Systems Analysis

Strategies for Acquiring IT Applications Options for Obtaining Information Systems Build your own Outsourcing

The Systems Development Lifecycle Systems Investigation Systems Analysis Systems Design Systems Implementation Systems Maintenance

Discussion If you were the first CEO, what would you do to prevent failure? In your opinion what was the main reason for project failure?