2. Objectives  What is an ERP system?  What are the Benefits of an ERP system?  Who are the ERP vendors?  What aspects constitute a successful implementation?  What factors are associated with ERP failures and how to overcome them?

4. What is an ERP systems?  “They are systems designed to process an organisation transactions and facilitate integrated and real time planning, production and customer response.”  ERP Characteristics ERPs are packaged software designed for a client server environment. ERPs integrate the majority of a business processes ERPs process a large majority of an organization’s transactions ERPs use an enterprise wide database that typically stores each piece of data at once. ERPs allows access to the data in real time. (O’leary, 2000)

5. Functional Aspects of an ERP Source : http://www.inixion.com/images/features3.jpg

6. ERP life cycle  Deciding to Go ERP  Choosing and ERP system  Designing ERP systems Should business process or current ERP software be changed Choosing Standard Model and Process  Implementing ERP: Big Bang versus phased  After Going Live  Training (O’leary, 2000)

7. Tangible Benefits:  Reduce Labour Costs  Reduced material Costs  Improve in Sales and Customer Service  Efficient Financial Management Why Implement an ERP system? Source : ( Leon, 2008 and Cruz-Cunha 2010) Intangible Benefits:  Information supply chain visibility  New/improved business processes  Product and Process design  Production and Material Management

8. Why Implement an ERP system? Source: http://www.epicor.com/uk/Company/PressRoom/Pages/SuccessStories.aspx What are ERP Vendors marketing:  Improve alignment of strategies and operations  Reduce costs through increased flexibility  Achieve an end-to-end view across all your lines of business  Drives value for your business  Delivers agility in the face of rapid change Cast Studies Drallim – Fluid Controls / Over 4,400 hours saved per year through process improvements and 21% cut in support costs Vita Liquid Polymers/ 80% of customers now pay invoices a week earlier and automated processes mean tighter processes and proactive credit checking

9. Who are the ERP vendors?

10. Tier ITier IITier III SAP Oracle Oracle e Business Suite Oracle JD Edwards Oracle Peoplesoft Microsoft Dynamics Epicor Sage Infor IFS QAD Lawson Ross ABAS Activant Solutions Inc. Baan Bowen and Groves Compiere Exact Netsuite Visibility Blue Cherry Exact HansaWorld Intuitive Syspro Open Source ERP software OpenERP, Compiere, Open Bravo, Apache OFBix/opentaps, ERP5, OpenMFG, OpenPro, etc Source: Panorama Consulting, 2011 Guide To ERP Systems And Vendors

11. ERP Vendors Market Share 2010 Source: Panorama Consulting, 2011 Guide To ERP Systems And Vendors

12. Payback Period By Vendor Tier up to 2010 Source: Panorama Consulting, 2011 Guide To ERP Systems And Vendors

13. ROI and ROA Performance comparison Pre- and post- adoption for 63 ERP Systems: Source : (C. Jones, Kalmi and Kauhanen, 2011)

14. How to Measure ERP success?  Lyytinen and Hirschheim (1987), categorized IT project success by assessing the resulting system against Planned objectives, User expectations, Project budget

15. Highlights from a 2010 ERP Benchmark  Over 40% of organizations are dealing with significant change form ERP system rollout.  Over 60% of organizations suffer from poor visibility to data and poor integration in their old systems.  Organizations expect a lot from their ERP systems.  Most companies are not yet ready for the organizational changes of ERP software. 2009 Average2010 Average Take longer than expected 35%61% Implementation Duration18.4 Months14.2 Months Costs exceeds budget51.4%74.1 Benefit Realized Under 50%48%67%

16. Some People might have different views

17. ERP project failure classification ERP project failure could be classified as one of four levels: (a) Process failure, when the project is not completed within the time and budget. (b) Expectation failure, when the IT systems do not match user expectations. (c) Interaction failure, when users attitudes towards IT are negative. (d) Correspondence failure, when there is no match between IT systems and the planned objectives. (Aloin et al, 2007)

18. What factors are associated with ERP failures and how to overcome them? Risk categories associated with enterprise-wide/ERP projects:  Organizational Fit  Skill mix  Management structure and strategy  Software systems design  User involvement and training  Technology planning/integration (Sumner, 2000 ; Ojala et al, 2006 )

19. Risk category : Organizational Fit Risk Factors  Failure to redesign business processes to fit the software  Failure to follow an enterprise-wide design which supports data integration Case Study Hershey Foods Corporation Minimising Strategies  Commitment to redesigning business processes  Top management commitment  Following an enterprise-wide design which supports data integration ( Wailgum, 2009 ) (Sumner, 2000 ; Ojala et al, 2006 )

20. Risk category : Skill Mix Risk Factors  Insufficient training and reskilling  Insufficient internal expertise  Lack of business analysts with business and technology knowledge  Failure to mix internal and external expertise effectively Case Study Lumber Liquidators Minimising Strategies  Effective use of strategies for recruiting and retaining specialized technical personnel  Obtaining ‘business analysts’ with knowledge of application-specific modules  Effective use of external consultants on project teams (Kanaracus,2010) (Sumner, 2000 ; Ojala et al, 2006 )

21. Risk category :Management structure and strategy Risk Factors  Lack of senior management support  Lack of proper management control structure  Lack of a champion  Ineffective communications Case Study The City of San Diego Minimising Strategies  Obtaining top management support  Establishing a centralized project management structure  Assigning a ‘champion ’ (Krigsman, 2009) (Sumner, 2000 ; Ojala et al, 2006 )

22. Risk category : Software systems design Risk Factors  Failure to adhere to standardized specifications which the software supports  Lack of integration Case Study Levi Strauss Minimising Strategies  Commitment to using project management methodology and ‘best practices’ specified by vendor  Adherence with software specifications (Clarke, 2008) (Sumner, 2000 ; Ojala et al, 2006 )

23. Risk category : User involvement and training Risk Factors  Insufficient training of end-users  Ineffective communications  Lack of sensitivity to user resistance  Failure to emphasize reporting Case Study Dorset County Minimising Strategies  Effective user training  Full-time commitment of users to project management roles  Effective communications (Anonymous, 2010) (Sumner, 2000 ; Ojala et al, 2006 )

24. Risk categories : Technology planning/integration Risk Factors  Inability to avoid technological bottlenecks  Attempting to build bridges to legacy applications Case Study Dillard's Inc Minimising Strategies  Acquiring technical expertise  Acquiring vendor support for capacity planning and upgrading  Planning for client–server implementation including client workstations (Jarzemsky, 2010) (Sumner, 2000 ; Ojala et al, 2006 )

25. Other Aspects: In 2004, HP's project managers were aware of the risks associated with the ERP rollout. But they could not plan for so many events to happen at once. The project eventually cost HP $160 million in order backlogs and revenue loss that accumulated to five times the project's estimated cost. (Gilles Bouchard CIO of HP's global operations) (Wailgum, 2009)

26. Strategic critical success factors  Top management commitment and support  Visioning and planning  Build a business case  Project champion  Implementation strategy and timeframe  Vanilla ERP  Project management  Change management  Managing cultural change (Finney and Corbett, 2007)

27. Tactical critical success factors  Balanced team  Project team: the best and brightest  Communication plan  Empowered decision makers  Team morale and motivation  Project cost planning and management  BPR and software configuration  Legacy system consideration  IT infrastructure  Client consultation  Selection of ERP  Consultant selection and relationship  Training and job redesign  Troubleshooting/crises management  Data conversion and integrity  System testing  Post-implementation evaluation (Finney and Corbett, 2007)

28. Summary  ERP Systems are not an IT solution but a system that would transform the company into a more efficient and effective organization.  Successful implementation of ERP is complexly tied to multiple factors that needs to be understood by management who are setting the strategic direction of the implementation process. Furthermore, A continuous support and monitoring of the implementation process is required at each stage.  The most important issue in a successful ERP project is an understanding of the company’s business and context requirements.

29. What's the future will be like?

30. Reference List: 1. Lyytinen, K. (1988) "Expectation Failure Concept and Systems Analysts' View of Information System Failure: Results of an Exploratory Study", Information & Management, 14, 1, pp 45-56. 2. Leon, A. (2008). Enterprise Resource Planning. 2nd ed. New Delhi: Tata McGraw-Hill. pp. 42 3. Cruz-Cunha, M. (2010). Enterprise Information Systems for Business Integration in SMEs. USA: Business Science Reference. pp. 155 4. Derek C. Jones, Panu Kalmi, Antti Kauhanen, International Journal of Production Economics, Volume 130, Issue 2, April 2011, Pages 159-168 ) 5. Sumner, M. “Risk factors in enterprise-wide/ERP Projects,” Journal of Information Technology, 2000, vol. 15, pp. 317-327. 6. Wailgum,T. (2009) Focus: ‘10 Famous ERP Disasters, Dustups and Disappointments ‘. CIO [online] Available at: [Accessed 25 Feb 2012]. 7. Kanaracus, C. (2010) Focus: ‘ERP Woes Blamed for Lumber Company's Bad Quarter‘. IDG News [online] Available at: [Accessed 25 Feb 2012]. KanaracusIDG News http://www.pcworld.com/businesscenter/article/209886/erp_woes_blamed_for_lumber_companys_bad_quarter.html 8. Krigsman, M. (2009) Focus: ‘San Diego fires Axon over ERP implementation problems‘. Zdnet [online] Available at: [Accessed 25 Feb 2012]. http://www.zdnet.com/blog/projectfailures/san-diego-fires-axon-over-erp-implementation-problems/1960 9. Clarke, G.(2008) Focus: ‘Levi's suffers profit meltdown in midst of SAP embrace Pants ERP system leaves it without pants‘. Theregister[online] Available at: [Accessed 25 Feb 2012]. 10. Anonymous. (2010) Focus: ‘Dorset County Council computer problems continue ‘. Dorsetecho [online] Available at: [Accessed 25 Feb 2012]. 11. Jarzemsky, M. (2010) Focus: ‘JDA Software Hit With Judgment in Dillard's Dispute ‘. The wall street journal [online] Available at: [Accessed 25 Feb 2012]. 12. Ojala,M. Vilpola,I. and Kouri,I.(2006) “ Risks in ERP Project – Case Study of IS/ICT Management Capability Maturity Level and Risk Assessment” 13. Aloin,Di. Dulmin,R.Mininno,V. (2007) Risk management in ERP project introduction: Review of the literature, Information & Management, Volume 44, Issue 6, September 2007, Pages 547-567 14. O'Leary,D. ( 2000) Enterprise Resource Planning Systems: Systems, Life Cycle, Electronic Commerce, and Risk, Cambridge University Press 15. Finney,S. and Corbett,M. (2007) "ERP implementation: a compilation and analysis of critical success factors", Business Process Management Journal, Vol. 13 Iss: 3, pp.329 - 347