1. NTU EMBA 93 商學組 Group 1 葉憲昌 陳慧銘 黃秀錦 黃世傑 蔡森豪 李衡礎
Report of Paper Review on Putting the Enterprise into the Enterprise System
NTU EMBA 93 商學組
Group 1
葉憲昌 陳慧銘 黃秀錦
黃世傑 蔡森豪 李衡礎

2. Content What ERP is ERP vs Business Strategy ERP vs Organization
- Apple vs Compaq
ERP vs Organization
Federalist model of ERP
- Monsanto vs HP
Example of Elf Atochem

3. What ERP Is Scope of ERP system - Financial and accounting information
- Human resource information
- Supply chain information
- Customer information
- Operations and logistics
- Sales and marketing

4. What ERP is Managers and stakeholders Reporting applications Central
Financial
applications
Sales and
delivery
applications
Central
Database
Manufacturing
applications
Sales force and customer service reps
Back-office administrator and workers
Customers
Suppliers
Service
Applications
Inventory
and supply
applications
Human
resource
management
application
Employee

5. ERP vs Business Strategy
Focus is on “ enterprise “ instead of on “ system “
- Enterprise : Organization and strategy
- System : Technical criteria alone
Does ERP vendor or customers structure the system to reflect the best practices ?
Is ERP designated processes undermining company competitive edge corresponding to business strategy ?

6. ERP vs Business Strategy
ERP is risk to dissolve the source of advantage of differentiation
- Apple : using designated process
- Compaq : customized process for build-to-order
business model

7. ERP vs Organization
Direct and often paradoxical impact on a company organization and culture
- streamline the management structure with universal,
real-time access to operating and financial data
> more flatter, flexible and democratic
- Centralization of control over information and
standardization of processes
> Hierarchical, command-and-control
organization with uniform culture

8. ERP vs Organization
Difference in regional market remaining so profound that strict process uniformity being counterproductive

9. Federalist Model
To preserve local autonomy while maintaining a degree of cooperate control
Not a single and global version of ERP but different version of the system in different regional organization to tailor to support local operating practices
- A core of common information like financial shared by
all the organizations
- Other information like customers collected, stored and
controlled locally

10. Federalist Model
Challenge to manager : what should be common throughout the company and what should be allow to vary
Corporate and business-unit managers working together to think through each major type information and each major process in the company
- How important to process order consistently worldwide
- Does the term “ customer “ mean identically in every BU

11. Federalist Model Example - Monsanto
> High priority on achieving the greatest possible degree
of commonality with standardized 85% of data in ERP
> Standardized all data about material but customers and
factory data
> reduce 24 coding schemes for suppliers to one
- HP
> A company with strong tradition of BU autonomy
> Only a small amount financial data for commonality

12. Example of Elf Atochem
US$2B regional chemical subsidiary under Elf France
12 business units
Situations
- ordering systems not integrated with production system
- sales forecast not tied to budgeting system
- Financial data independently
- US$6M inventory written off annually
- Top management not getting the right information timely

13. Example of Elf Atochem Top management’s attitude
- Recognize ERP the best approach to integrate data flow
- View ERP project as an opportunity to reflect strategy and
organization instead of just a technology initiative
- Company’s difficulties being fragmentation of its
organization not the fragmentation of the system
> Focus on material management, production planning, order
management, financial report and customer relationship
> Each process was re-designed to take full advantage of new
ERP capability, particularly the ability to simplify the flow of
information
> Eliminate layer of information middleman
- Set the goal of offering the best customer service

14. Example of Elf Atochem
Implementation
- Install ERP modules only required to support target
processes
- Make fundamental change of organizational structure
> AR & credit departments combined
> Customer-service departments combined
> Establish position of Demand Manager to integrate sales &
production processes
- 60-person core implementation team reporting to
executive committee

15. Example of Elf Atochem
Implementation
- 60-person core implementation team reporting to
executive committee
> Business analysts and information technologists
- A set of super users from Bus and corporate helping to
ensure decision of ERP system’s configuration being
made with the broadest possible understanding on
business and training people of its department
- Installation one BU at a time to ensure the effort is
manageable and to refine the ERP system and the
process

16. Thank You