723G79/80
Enterprise systems
Özgün Imre
[email protected]
EIS-IE Linköping University
2016-05-11
Agenda
•  Project reminders
•  Lecture
• 
Light, Ben. 2005. “Potential Pitfalls in Packaged Software Adoption.” Communications
of the ACM 48 (5) (May 1): 119–121.
• 
Wei, Chun-Chin, Chen-Fu Chien, and Mao-Jiun J. Wang. 2005. “An AHP-Based
Approach to ERP System Selection.” International Journal of Production Economics 96
(1) (April): 47–62.
• 
Avital, M, and Betty Vandenbosch. 2000. “SAP Implementation at Metalica: An
Organizational Drama in Two Acts.” Journal of Information Technology 15 (3): 183–
194.
•  ERP presentations
2
Reminders
•  Send your group list and photo to me as soon as the lecture is
finished
•  Do we have any that do not have group yet?
3
Source: http://www.nzhistory.net.nz/files/images/stories/stats/stats-002-btn.jpg
Having packaged goods
•  Why do we buy packaged goods?
•  Why don’t you build your own computer?
•  Why don’t you write your own software?
•  Business students should say something about why?
Source: http://www.nzhistory.net.nz/media/photo/early-electronic-counter
4
Some reasons?
•  Access to resources
•  Specialisation
•  Reinventing the wheel
•  Lock in
•  Etc
5
ReasonforPurchase
6
Correc&onof
Exis&ngProblems
LegacySystemsandBacklogs
AvailabilityofaBroaderSkillsBase
Predictability
Cost
Percep&onofaReliableProduct
Func&onality
BusinessBenefits
FreeingUptheISFunc&on
DesireforStandardiza&on
Implemen&ngChange
SocialInfluences
RoleofSelling
Bravado
Adapted from: Light (2005, 120)
•  Time to fill the board,
•  What are the disadvantages ?
•  Can you link them together?
•  Can you explain them with using the more general theoretical
models you learned before?
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Packaged good market
Porter’s Five Forces
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Adapted from: Porter (1985, 5)
Porter M. E. (1985) Competitive Advantage: Creating and Sustaining Superior Performance, New York: Free Press
Choosing an ERP
•  If you pay hundreds of millions, you don’t want to have a failed
project
•  Remember NYC story
•  Any stories that you know?
9
Project management
What does a general project management course say for a project
to be successful?
Trained personnel?
Culture open to change?
any others
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Models to select an ERP system
•  Today we have different systems to choose from
•  SAP, Baan, Peoplesoft, Oracle, IFS, Infor etc
•  And we also have different methods to use when selecting
them
•  AHP, ANP, fuzzy models
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AHP
•  As name implies, here you order things into a hierarchy
•  “Objective hierarchy is constructed and the appropriate attributes
are specified to provide detailed guidance for ERP system
evaluation” (48)
•  ERP is a major undertaking, so it can not be selected randomly, or
intuitively.
•  One should use a group of criteria and methods to ascertain that it
will live up to its promise
•  AHP is one example of how such a selection might be conducted
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The general method
•  Step 1. Form a project team and collect all possible information
about ERP vendors and systems.
•  Step 2. Identify the ERP system characteristics.
•  Step 3. Construct a structure of objectives to develop the
fundamental- objective hierarchy and means-objective network.
•  Step 4. Extract the attributes for evaluating ERP systems from
the structure of objectives.
•  Step 5. Filter out unqualified vendors by asking specific
questions, which are formulated according to the system
requirements.
•  Step 6. Evaluate the ERP systems using the (AHP) method.
Step 7. Discuss the results and make the final decision
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Wei et al. cont’d
•  Identify the relevant actors, objectives etc.
•  Structure them
•  Strategy
•  “Fundamental-objectives are those that are important because they
reflect what the decision makers really want to accomplish. Meanwhile, means-objectives are those which help the fulfillment of other
objectives” (Clemen, 1996, in Wei et al., 2005, p.50)
•  Top down: what do you mean?
Bottom up: to what general aspect does this lead to?
•  How do we achieve this: means objective,
•  And why is that important (link to fundamental list)
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Wei et al. cont’d
•  Who are in the team? What did they do?
•  What do the want to do with ERP? What are the potential
benefits?
•  How did they extract the attributes?
•  How did they eliminate the ERP systems?
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ARTICLE IN PRESS
Part of the “Tree”
Part of the tree
C.-C. Wei et al. / Int. J. Production Economics 96 (2005) 47–62
Price
Minimizing total
cost
Maintenance costs
Consultant expenses
Minimizing
implementation time
Infrastructure costs
Module completion
Having complete
functionality
Function-fitness
Security
Choosing the
most
appropriate
ERP system
Selecting
the most
suitable
ERP
Wei et al., 2005, 53
system
9
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Having user-friendly
interface and
operations
Ease of operation
Ease of learning
Upgrade ability
Having excellent
system flexibility
Ease of integration
Ease of in-house
development
Having high system
reliability
Stability
Recovery ability
Financial condition
53
tors
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Flexibility
1. Upgrade ability
1. Common programming language
2. Ease of integration
2. Platform independence
3. Ease of in-house development 3. Ease of integration with other IS
Reliability
1. Stability
2. Recovery ability
Wei et al. cont’d1. Automatic data recovery
2. Automatic data backup
Reputation
1. Scale of vendor
2. Financial condition
3. Market share
1.
2.
3.
4.
Scale matching
Financial stability
Long-term financial viability
Provision of reference sites
Technical capability
1. R&D ability
2. Technical support capability
3. Implementation ability
1.
2.
3.
4.
5.
6.
7.
Good upgrade service
Diverse product line
Good implementation experience
Ease of implementation
Adequate number of engineers
Cooperation with other partners
Domain knowledge
Service
1.
2.
3.
4.
1.
2.
3.
4.
5.
Warranty details
Adequate number of experienced cons
Complete training lessons
Good problem-solving program
Online service
Warranties
Consultant service
Training service
Service speed
-attribute relative importance were made
results. Table 3 lists the inter-attribute
Some words of caution
•  Some of the objectives discussed are applicable to most cases
•  Two main categories: system characteristics and vendor
characteristics are probably there for every selection
•  But this paper is just one example.
•  The weights, even when the objectives are the same, might be
•  different.
•  Perhaps we already decided that we want (for ex. SAP), and no
other, so we won’t even have the vendor criteria in the model.
•  Perhaps we don’t have budget constraints?
•  There are other methods than AHP too.
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Metallica
•  Where are we?
•  Who are we?
•  What are we doing?
•  Why and how?
•  Who is invovled?
•  Why these people?
•  What happened (pre implementation, at Honeywell, at
San Diego, at
•  HQ)
•  What did we learn?
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