PowerPoint Presentation

Assessing and Managing the Benefits of Enterprise SystemsMike MazzaBUS-550

1Customer Relations Management

2Human Resources Management

3Financial Resource Planning

FRP4Manufacturing Resource Planning

5Supply Chain Management

6

Hong & Kim SHORT TERM PROJECT ORIENTED FAILS TO RECOGNIZE MULTI-PROJECT NATURENO INTEGRATION METRIC

Davenpoort LONG TERM VIEW -> vie multiple regression analysis SIGNIFICANT PATH COEFFICIENTS BETWEEN INTEGRATE,OPTIMAZE,INFOMATE BUT, NO ACCOUNT FOR (OII) OR (FF)

Gattiker & Goodhue INTERDEPENDENCE & COORDINATION = LONG TERM * TASK EFFICENCY VIA CUSTOMIZATION & 3 MAIN ANTICEDENTS = SUCESSFUL (FF) = OPTIMIZATION (71% OF VARIENCE)HELPS DATA QUALITY = LONG TERM BUT NO ACCOUNT FOR (OII)7Criteria for AssessmentQ: From whos perspective?

Senior Manager?Business Unit Manager?

A: Depends on which business factor

When you survey, chose right level for FUNCTION you are assessing.8Criteria for AssessmentQ: Domain of Study, Level & Purpose

A: ES impact on firms organizational and functional levels for the purpose of managing and improving ES3-Year time frame for the upcoming study9Criteria for AssessmentQ: What types of data will be used and against which referent

A: Subjective Data (ie..financial ratios)A: Perceptual (OOI) = Overcoming Organizational InertiaA: Optimal Success or Stated Goals ON WHAT MEASURE OF SUCCESS - Stated Goals QUALITATIVE or QUANTITATIVE10OBES ModelOrganizational Benefits from system use of Enterprise SystemOf Factors Affecting Organizational Benefits from ES11OBES Model Overview

LONG TERM BENEFITS MODEL can be achieved by following SHORT TERM BENEFITS MODEL

HOW TO NAVIGATE ACHIECE NUMEROUS SHORT TERMS (ZOOM-IN) TO ACHIEVE LONG TERM (ZOOM-OUT) 12Short-Term ModelDependent VariableDependent variable (what we want to achieve)

Organizational benefits from system use from perspective of management *For This Project*

ASSESSES FACTORS THAT GOING INTO ACCOMPLISHING AN ORGANIZATIONAL BENEFIT FROM THIS PROJECT13Short-Term ModelIndependent Variable IFunctional Fit (FF) is the extent to which the functional capabilities embedded and configured within an ES package match the functionality that the organization needs to operate effectively.Example - Features and FieldsDelivered and measured project by projectFEATURES IN EACH FUNCTIONAL ES PACKAGE MATCHES PROCEDURES AND NEEDS OF YOUR COMPANY

Garments of the same style in many different colors VF Services (Lee, Wrangler, Northface) WITH Reebok and SAP to realize proper functionalityAFS = APPERAL FOOTWARE SOLUTION14Short-Term ModelIndependent Variable IIOvercoming organizational inertia (OII) is the extent to which members of the organization have been motivated to learn, use, and accept the new system.Change management importantConcentrate on measuring project by project

No system is going work without active and willing participation of the users. channels must remain open They need to be active participant in system development/customization15Long-Term ModelDependent VariableDependent variable (what we want to achieve)

Organizational benefits from system use from perspective of senior management

Success determined by Senior Management16Long-Term ModelIndependent Variable IIntegration of Information Systems: Unification of processes, systems, and/or data from multiple systemsnot necessarily in the ONE organization. Links efforts of units through shared data. Has sufficient integration occurred?Back end (unseen) and front end (user interface)Easier to overcome OII17Long-Term ModelIndependent Variable IIProcess Optimization:

Have the projects improved the efficiency and effectiveness of the organizations processes?Important driver in achieving Organizational BenefitsCRM weeks to days through integration18Long-Term ModelIndependent Variable IIIImproved access to information to key organizational decision makers.Does ES provide quicker access to relevant, accurate information?Helps improve decision-making by reducing the time & effort required to discover and use valuable information Where in process a delay has occurred and why?Trends

19Long-Term ModelIndependent Variable IVOn-going major ES improvement The number and extent of investment in major business improvement projects for improving and extending its ES.Implementation -> Customize -> Upgrade-> To other business units ->20OBES Model

21Strength of Evidence

+ 3 Yrs.95.52.95.88.67.68SOE 0 = No evidence concerning the importance of the factor in the presentation

SOE 1 = Factor mentioned explicitly but in passing or implicitly, but not discussed at length

SOE 2 = Factor clearly identified as a benefit driver (e.g., by a full slide) or by one or more paragraphs of the transcript

SOE 3 = Strong evidence of the importance of the benefit driver (e.g., discussed at length) or the point was emphasized by speaker22Perceived Net Benefit FlowPNBF: Reflects managers assessment of Net Benefit progress over initial 3 Year period from Go Live23Operational PNB

Operational Benefits include:Labor, Inventory and Administrative cost reductionCustomer and Employee Support cycle time reductionProductivity, Quality and Customer Service ImprovementFROM: Business managers asked about value chain benefitsDOTTED LINE REPRESENTS IMMEDIATE COST SAVINGS (OI AND EXTRA DATA ENTRY TEMPORARILY BRINGS DOWN OVERALL)24Managerial PNB

Improved resource management Improved decision making and planning Real time analysis for effective strategic planning Overall performance improvement - Financial, manufacturing, overall efficiency and effective management.

FROM: Business managers asked about goal achievementOnce systems are fully integratedManagerial Benefits include:

Improved resource management Asset cost, Depreciation, maintenance, workforce allocation Improved decision making and planning Real time analysis for effective strategic planning Overall performance improvement - Financial, manufacturing, overall efficiency and effective management.

25Strategic PNB

Support business growthSupport business alliance via easy consolidation and integrated resourcesEnhance innovationBuild cost leadership via streamlining operationsEnabling world wide expansionSupport e-commerceFROM: Senior Mangers asked about strategic goal achievementInnovation due to shared information26IT Infrastructure PNB

Provide immediate flexibility and extendibility to external stakeholders Lower cost of changeReliable single platformContinuous, customizable improvementsFROM: IT managers asked about cost and technology changes27Organizational PNB

Improved work patterns via coordination and harmonization between departmentsShortened learning curvesOverall improvement in organizational skill level Building common/consistent vision across organizational levels

FROM: Business managers asked about attitudes and cross-functional successesAfter overcoming initial Organizational Inertia, benefits include:

28Organizational PNB cont.

Shifting work focus to customer, market and processIncreased moral and satisfaction due to improved access to information, increased efficiency and knowledge

FROM: Business managers asked about attitudes and cross-functional successesAfter overcoming initial Organizational Inertia, benefits include:

29PRESENTATION QUESTION #1Q - What acronym did Lee, Wrangler, Northface & Reebok assign to their customized ES?

(CAS) Consolidated Apparel Solution(APS) Apparel Production Solution(AFS) Apparel Footwear SolutionPRESENTATION QUESTION #2Q - Which independent variable does not belong in the Long Term Benefits Model ?

Process OptimizationIntegrationFunctional FitImproved Access to InformationPRESENTATION QUESTION #3

Q (3a) What kind of graph is this Q (3b) For what domain?

OrganizationalStrategicManagerialOperationalPerceived NetBenefit GraphSourcesSeddon & Shang, (2002). Assessing and managing the benets of enterprise systems: the business managers perspective. Information Systems Journal, 12, 271-299 http://cba.uah.edu/guptaj/m680/erpbenefits.pdf

Seddon, Calvert & Lang, (2010). A Multi-Project Model of Key Factors Affecting Organizational Benefits From Enterprise Systems. Management Information Systems Quarterly, (34)2, 305-328http://aisel.aisnet.org/misq/vol34/iss2/7/