A Framework for Evaluating ERP Implementation Choices – Luo & Strong Flashcards
A Framework for Evaluating ERP Implementation Choices – Luo & Strong
Intro and aim of paper?
- 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
A Framework for Evaluating ERP Implementation Choices – Luo & Strong
Benefits ERP system?
integration of data & apps; replacement of old and fragmented systems; cost advantages; quicker development of packaged systems; best practices in organisational process
A Framework for Evaluating ERP Implementation Choices – Luo & Strong
Benefits ERP system?
integration of data & apps; replacement of old and fragmented systems; cost advantages; quicker development of packaged systems; best practices in organisational process
A Framework for Evaluating ERP Implementation Choices – Luo & Strong
Drawback ERP systems?
implementation in individual companies – extremely expensive; oftentimes not compatible with strategic partner; conflicting with management style; overwhelming required organisational changes to system
A Framework for Evaluating ERP Implementation Choices – Luo & Strong
ERP implementation issues: What is packaged software?
- ERP software developed for market not for an organisation
- user participation is limited during development + implementation of ERP software
A Framework for Evaluating ERP Implementation Choices – Luo & Strong
ERP implementation issues: What is Complexity?
- 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
A Framework for Evaluating ERP Implementation Choices – Luo & Strong
ERP implementation issues: What its System Adaptation?
- ERP systems need to be changed to fit existing or reengineered business processes
A Framework for Evaluating ERP Implementation Choices – Luo & Strong
ERP implementation issues: What its Organisation Adaptation?
- organisations need to be changed to fit the ERP system analysis phase activities (understanding critical processes) + design phase activities (knowledge of ERP software)
A Framework for Evaluating ERP Implementation Choices – Luo & Strong
What is the Resource-based view regarding ERP implementation?
success of ERP implementation depends on IT-resources possessed by an organisation and how they are assembled, coordinated, deployed (IT-capability)
A Framework for Evaluating ERP Implementation Choices – Luo & Strong
What is classification of IT-based resources?
tangible (IT infrastructure); intangible (knowledge bases); human (technical & managerial IT skills)
A Framework for Evaluating ERP Implementation Choices – Luo & Strong
What are IT capabilities?
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
A Framework for Evaluating ERP Implementation Choices – Luo & Strong
What is the primary goal of customisation in ERP implementation?
achieve fit between ERP system & the process that the system supports
-> either customise system(tech), customise process(process) or both
A Framework for Evaluating ERP Implementation Choices – Luo & Strong
What are the 3 types of technical customisation options?
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
A Framework for Evaluating ERP Implementation Choices – Luo & Strong
Technical customisation options: What is Module selection?
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
A Framework for Evaluating ERP Implementation Choices – Luo & Strong
Technical customisation options: What is Table configuration?
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
A Framework for Evaluating ERP Implementation Choices – Luo & Strong
Technical customisation options: What is Code customisation?
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
A Framework for Evaluating ERP Implementation Choices – Luo & Strong
Technical customisation options: What is Code customisation?
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
A Framework for Evaluating ERP Implementation Choices – Luo & Strong
What is Processs customisation?
degree to which business process changed to fit the system
A Framework for Evaluating ERP Implementation Choices – Luo & Strong
What is a Business process?
set of logically related tasks that use the resources of an organisation to achieve a defined business outcome
A Framework for Evaluating ERP Implementation Choices – Luo & Strong
What are the three types of process customisation?
no change, incremental change, radical change
-> how much change is needed depends on how well new technology fits with existing process
A Framework for Evaluating ERP Implementation Choices – Luo & Strong
Process customisation: What is no change?
process customisation only involves change in tasks and resources but no changes in relationships among tasks and configurations of resources
A Framework for Evaluating ERP Implementation Choices – Luo & Strong
Process customisation: What is Incremental change?
improvements are made in tasks and resources & relationships among these; focus lies on solving problems found in process; eg total quality management
A Framework for Evaluating ERP Implementation Choices – Luo & Strong
Process customisation: What is radical change?
fundamental rethinking and radical redesign of elements in process (including measures of performance
A Framework for Evaluating ERP Implementation Choices – Luo & Strong
Process customisation: What is radical change?
fundamental rethinking and radical redesign of elements in process (including measures of performance