1. Chapter 7: ERP Implementation & Training
User Training
Maintenance

2. Organizational Change from ERP
Productivity decline
Jobs redefined, new procedures established, ERP fine tuned, organization learns to process new information streams
Productivity gain
Develop new skills, structural changes, process integration, add bolt-ons
Payoff
Transform organizational operations to efficient level

3. Critical Success Factors
What the organization must do well to succeed
For IS Projects:
Top management support
Inherent in ERP
Clearly stated objectives
End User involvement

4. ERP Project Failure FoxMeyer Drug Bankrupt Hershey’s City of Oakland
19% drop in profit
29% increase in inventory
City of Oakland
Erroneous paychecks
Miller Industries
Inefficient ERP – operating loss
WW Grainger Inc
Earnings dropped $11 million

5. ERP Critical Success Factors Umble et al. (2003)
Clear understanding – strategic goals
Top management commitment
Project management implementation
Great implementation team
Cope with technical issues
Organizational commitment to change
Extensive education & training
Data accuracy
Focused performance measures
Resolution of multi-site issues

6. Implementation Strategy Options Markus et al. [2000]
Business Strategy
Total local autonomy
Headquarters control – financial only
Headquarters coordination
Network coordination
Total centralization
Software Configuration
Single/multiple financial/operations
Technical Platform
Centralized/Distributed
Management Execution
Big bang/Phased rollout

7. Implementation Strategies Mabert et al. [2000]
Strategy
Months %
Big bang 15 41
Phased rollout by site 30 23
Phased rollout by module 22 17
Mini big bang
Phased rollout by module & site 25 2

8. Implementation Strategies
Big bang seemingly cheapest
Dangerous
Often makes sense in ERP if carefully planned
Phased rollout reduces risk
Especially good for large organizations

9. Levels of IS/IT Failure
Corresponding failure
Don’t meet design objectives
Process failure
Not on time &/or not within budget
Interaction failure
System not used as designed
Expectation failure
Return not what stockholders expected

10. Factors in ERP Implementation Failure Willcocks & Sykes [2000]
Scenario
CIO/IT Focus
Typical outcome
Technological determinism
Technical
Fail to gain business benefits
Supplier/consultant driven
Disregarded
Cost overruns
Outdated relationships & capabilities
Insufficient talent
Chaos

11. Features of Successful ERP Implementation Willcocks & Sykes [2000]
IT Leadership
Business systems thinking
Relationship building
Have needed technical platform
Ability to troubleshoot
Informed buying
Contract efforts coordinated
Suppliers held accountable
Long-term relationships with suppliers

12. Strategies to Attain Success
User vs. Specialist focus
Users over IT staff
Governance & Staffing
High level of support
Champion present
Time-box philosophy
Short (6-9 months if can)
Dolphins, not whales
Supplier/consultant role
controlled

13. User Training Focus on business processes Explain why
Not on using system
Explain why
Don’t skimp on time
Show why new system superior to old

14. Training Delivery Formats
Web-based virtual training
Computer-based training
Video courses
Self-study books
Pop-up help screens

15. ERP Maintenance Nah et al. (2001)
Corrective
Incorporate vendor patches, fix problems
Adaptive
Implement new features, internal customization, implement interfaces
Perfective
New versions
Preventive
Monitor response time, errors, track maintenance activities

16. ERP System Migration Over time, need to adopt changes WHY
Minor modifications
Maybe system replacement
Vendors change products
WHY
The longer the time between upgrades, the harder
Easier to support a smaller number of software versions
Migrations can increase sales of seats, add-ons

17. User Reasons to Migrate
Added functionality
Compliance with new standards
Discontinued vendor support
Customer problems in linked systems

18. Summary Time, cost, functionality tradeoff Critical success factors
In ERP, functionality the most important
Critical success factors
Top support & clear objectives inherent in ERP
Need User Involvement
Phased implementation reduces risk
but increases time
Once installed, still many pitfalls
Vendors change products
User training critical