A Framework for Evaluating ERP Implementation Choices – Luo & Strong Flashcards

1
Q

A Framework for Evaluating ERP Implementation Choices – Luo & Strong

Intro and aim of paper?

A
  • ERP software is fast growing  promises integrating computing solution while improving firm’s ability to compete in marketplace
  • ERP implementation is often accompanied by large-scale organisational changes
    -> packaged software solution does not match with orgas existing processes
  • aim of paper: introduce framework for supporting management decision-making about customisation choices and capabilities required to accomplish them
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2
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A Framework for Evaluating ERP Implementation Choices – Luo & Strong

Benefits ERP system?

A

integration of data & apps; replacement of old and fragmented systems; cost advantages; quicker development of packaged systems; best practices in organisational process

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3
Q

A Framework for Evaluating ERP Implementation Choices – Luo & Strong

Benefits ERP system?

A

integration of data & apps; replacement of old and fragmented systems; cost advantages; quicker development of packaged systems; best practices in organisational process

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4
Q

A Framework for Evaluating ERP Implementation Choices – Luo & Strong

Drawback ERP systems?

A

implementation in individual companies – extremely expensive; oftentimes not compatible with strategic partner; conflicting with management style; overwhelming required organisational changes to system

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5
Q

A Framework for Evaluating ERP Implementation Choices – Luo & Strong

ERP implementation issues: What is packaged software?

A
  • ERP software developed for market not for an organisation
  • user participation is limited during development + implementation of ERP software
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6
Q

A Framework for Evaluating ERP Implementation Choices – Luo & Strong

ERP implementation issues: What is Complexity?

A
  • ERP projects are larger in scope = more risk associated as they affect more users with conflicting needs & requirements
  • ERP implementation requires integration of data, processes, operations throughout enterprise
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7
Q

A Framework for Evaluating ERP Implementation Choices – Luo & Strong

ERP implementation issues: What its System Adaptation?

A
  • ERP systems need to be changed to fit existing or reengineered business processes
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8
Q

A Framework for Evaluating ERP Implementation Choices – Luo & Strong

ERP implementation issues: What its Organisation Adaptation?

A
  • organisations need to be changed to fit the ERP system  analysis phase activities (understanding critical processes) + design phase activities (knowledge of ERP software)
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9
Q

A Framework for Evaluating ERP Implementation Choices – Luo & Strong

What is the Resource-based view regarding ERP implementation?

A

success of ERP implementation depends on IT-resources possessed by an organisation and how they are assembled, coordinated, deployed (IT-capability)

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10
Q

A Framework for Evaluating ERP Implementation Choices – Luo & Strong

What is classification of IT-based resources?

A

tangible (IT infrastructure); intangible (knowledge bases); human (technical & managerial IT skills)

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11
Q

A Framework for Evaluating ERP Implementation Choices – Luo & Strong

What are IT capabilities?

A

IT leadership, business system thinking, architecture planning, informed buying etc
* organisations have different IT resources + thus different IT capabilities  divergence in how orgas use IT = explanation for why orgas choose different ERP customisation options

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12
Q

A Framework for Evaluating ERP Implementation Choices – Luo & Strong

What is the primary goal of customisation in ERP implementation?

A

achieve fit between ERP system & the process that the system supports
-> either customise system(tech), customise process(process) or both

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13
Q

A Framework for Evaluating ERP Implementation Choices – Luo & Strong

What are the 3 types of technical customisation options?

A

module selection, table configuration, code modification

-> moving from module customisation to code customisation, costs & risks increase
* ERP vendors consider technical customisation as evolving process: adding modules, extending tables, improve tools for code modification = goal to reduce degree, costs, risks of customisation

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14
Q

A Framework for Evaluating ERP Implementation Choices – Luo & Strong

Technical customisation options: What is Module selection?

A

companies choose to implement one or more modules with the set configurations; customisation only achieved through firm decision as to which module to implement  minimum alterations to system; + low risk, low cost; - rarely sufficient in implementation

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15
Q

A Framework for Evaluating ERP Implementation Choices – Luo & Strong

Technical customisation options: What is Table configuration?

A

configuration options are selected in tables so that system fits organisational needs (for that meaning of options must be understood); + ability to tailor system without coding, full support of vendor & ease of future updates; - very complex & time-consuming

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16
Q

A Framework for Evaluating ERP Implementation Choices – Luo & Strong

Technical customisation options: What is Code customisation?

A

Code customisation: source code of ERP system is changed, functionality is augmented or new interface is developed; + greatest flexibility in adapting system to needs and existing production systems; - expensive, risks of failure & overrunning budget, integration benefits of ERP system may be lost

16
Q

A Framework for Evaluating ERP Implementation Choices – Luo & Strong

Technical customisation options: What is Code customisation?

A

Code customisation: source code of ERP system is changed, functionality is augmented or new interface is developed; + greatest flexibility in adapting system to needs and existing production systems; - expensive, risks of failure & overrunning budget, integration benefits of ERP system may be lost

17
Q

A Framework for Evaluating ERP Implementation Choices – Luo & Strong

What is Processs customisation?

A

degree to which business process changed to fit the system

18
Q

A Framework for Evaluating ERP Implementation Choices – Luo & Strong

What is a Business process?

A

set of logically related tasks that use the resources of an organisation to achieve a defined business outcome

19
Q

A Framework for Evaluating ERP Implementation Choices – Luo & Strong

What are the three types of process customisation?

A

no change, incremental change, radical change

-> how much change is needed depends on how well new technology fits with existing process

20
Q

A Framework for Evaluating ERP Implementation Choices – Luo & Strong

Process customisation: What is no change?

A

process customisation only involves change in tasks and resources but no changes in relationships among tasks and configurations of resources

21
Q

A Framework for Evaluating ERP Implementation Choices – Luo & Strong

Process customisation: What is Incremental change?

A

improvements are made in tasks and resources & relationships among these; focus lies on solving problems found in process; eg total quality management

22
Q

A Framework for Evaluating ERP Implementation Choices – Luo & Strong

Process customisation: What is radical change?

A

fundamental rethinking and radical redesign of elements in process (including measures of performance

23
Q

A Framework for Evaluating ERP Implementation Choices – Luo & Strong

Process customisation: What is radical change?

A

fundamental rethinking and radical redesign of elements in process (including measures of performance

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A Framework for Evaluating ERP Implementation Choices – Luo & Strong ERP CUSTOMISATION CHOICES?
Table with costumazation choices and technical costumization choices (siehe article) -> risk increases but depend on the company and its capabilities -> no option in above table is better than others  depends on organisation’s capability to make necessary system & process changes
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A Framework for Evaluating ERP Implementation Choices – Luo & Strong What is a technical change capability ?
organisation’s overall ability to customise ERP systems; consists of 1) scope & depth of its ability to understand ERP system 2) ability to make changes to software 3) ability to manage large-scale ERP implementation projects
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A Framework for Evaluating ERP Implementation Choices – Luo & Strong What is a High/low technical change capability ?
High technical change capability: broad scope and depth in all 3 abilities Low technical change capability: narrow scope & limited depth in all 3 abilities
27
A Framework for Evaluating ERP Implementation Choices – Luo & Strong What is a Process change capability ?
overall ability to customise business processes; consists of 1) ability to understand existing business processes 2) ability to design and implement business process changes 3) ability to manage large scale organisational changes
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A Framework for Evaluating ERP Implementation Choices – Luo & Strong What is a High/Low Process change capability ?
High process change capability: broad scope and depth in all 3 abilities Low process change capability: narrow scope & limited depth in all 3 abilities
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A Framework for Evaluating ERP Implementation Choices – Luo & Strong What is a High/Low Process change capability ?
High process change capability: broad scope and depth in all 3 abilities Low process change capability: narrow scope & limited depth in all 3 abilities
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A Framework for Evaluating ERP Implementation Choices – Luo & Strong Overall capability? Look at table in article
-> combination of technical change capability & process change capability determine type of organisation: novice, technician, organiser, expert
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A Framework for Evaluating ERP Implementation Choices – Luo & Strong FRAMEWORK FOR EVALUATING ERP CUSTOMISATION CHOICES
* expert has more options in choosing customisation combi than novice * customisation options requiring more process changes  rather organisers than technicians * customisation options requiring more ERP system changes  rather technicians than organisers (siehe article)
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A Framework for Evaluating ERP Implementation Choices – Luo & Strong FRAMEWORK APPLICATION – CASE STUDY & ITS FINDINGS ?
* the implementation of each ERP module & sometimes its submodule is an implementation process of itself * choices must be made in context of organisational capabilities  change over time * sequencing of implementation projects is important so that each project is feasible from perspective of organisational capabilities at the time it is initiated
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A Framework for Evaluating ERP Implementation Choices – Luo & Strong Conclusion? What is the contribution to practice?
* framework allows ERP implementers to examine many implementation possibilities rather than simply following ‘conventional wisdom’ of fitting the processes to the system ERP IMPLEMENTATION AS SERIOUS OF IMPLEMENTATION PROJECTS * firms have capabilities with regard to individual projects * capabilities can change over time as firms learn from previous projects * important to plan path of implementation projects so that more difficult projects become feasible through learning -> result: view ERP implementation as portfolio of projects
34
A Framework for Evaluating ERP Implementation Choices – Luo & Strong Conclusion? What is the contribution to research?
* proposed framework gives better advice than to just fit processes to system  can be used to generate testable hypotheses of relationships between customisation choices and organisational capabilities for specific ERP implementation project
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A Framework for Evaluating ERP Implementation Choices – Luo & Strong Conclusion? What are the limitations?
* illustrated case study is not full validation of framework * ERP customisation is only one important issue in ERP implementation (others: planning, management support etc) * framework does not determine decisions for managers  rather provides possibilities for customisation
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A Framework for Evaluating ERP Implementation Choices – Luo & Strong Conclusion? What future research?
* further validation needed by testing both in experiments & organisations * comparing decisions of managers using the framework with those not using it * testing framework in multiple differing organisations