Putting the Enterprise into the Enterprise System - Davenport

Question 1

Putting the Enterprise into the Enterprise System - Davenport

Intro and aim of the paper?

Answer 1

• most common failure when implementing enterprise systems: firms rush to install ES without having understand of business implications
  -> logic of system may conflict with logic of business

consequence:
1) implementation fails = wasting money + causing disruption
2) system weakens important sources of competitive advantage = gobbling the firm

Question 2

Putting the Enterprise into the Enterprise System - Davenport

THE ALLURE OF ENTERPRISE SYSTEMS (der reiz): Which problem do enterprise systems solve?

Answer 2

• problem enterprise systems solve: fragmentation of information in large business orgas
• having a fragmentation of information implies direct (storing and rationalising, rekeying data etc) & indirect (suffering of productivity and customer responsiveness; decisions based on instinct rather than detailed understanding) costs -> when firm systems are fragmented = business is fragmented
• ES thus steamline firm’s data flows and gives access to real-time operating information -> gains in productivity & speed

Question 3

Putting the Enterprise into the Enterprise System - Davenport

What does the author mean with WHEN SYSTEM & STRATEGY CLASH?

Answer 3

• ES is generic solution whose design reflects assumptions about way companies operate generally
• some ES customisation is possible -> systems are modular = only installing appropriate modules
• most firms need to adapt their business to system, not other way around
• firms competing on product might be careful with ES implementation to still be able to differentiate themselves -> risk that generic enterprise system could dissolve sources of advantage
• firms competing on cost rather than product/service may decide not to implement ES at all -> implies huge investment that must be weighed against eventual savings that system produces

Question 4

Putting the Enterprise into the Enterprise System - Davenport

THE IMPACT ON AN ORGANISATION: FLEXIBILITY VS HIERARCHY what are the two impacts of enterprise systems?

Answer 4

• one impact: real-time access to data allows firms to streamline management structures = creating flatter, more flexible, more democratic structures
• other impact: centralisation of control over info and standardisation of processes are characteristics more conform with command-and-control, hierarchical, uniform structures = discipline

->organisation can use ES systems with both goals in mind, depends on execution

Question 5

Putting the Enterprise into the Enterprise System - Davenport

How do enterprise systems help with MULTINATIONAL CORPORATION ?

Answer 5

• international firms can introduce more consistent operating practices across geographically dispersed units + rapid shifts in functions due to changing demand/supply
• minimisation of excess manufacturing capacity to reduce both component & finished-good inventory
• when markets are too different: firms need to have different versions (tailored) of same system in each regional unit to support local operating practices

->challenge: where common/where different

Question 6

Putting the Enterprise into the Enterprise System - Davenport

How to best implement ER systems?

Answer 6

• firms with greatest benefits from ES: those that stressed the enterprise not the system
• when focusing on enterprise & its structures when implementing a new system, one can achieve: tighter fit between business processes and system -> gain an advantage
• redefining of internal processes to take advantage of new system’s capabilities + implementing system in one business unit at a time ensures that effort is manageable & that team can refine system
• reliance on internal resources: reduces costs & ensures that employees understand how system works

Question 7

Putting the Enterprise into the Enterprise System - Davenport

What is the role of the manager when implementing ER systems?

Answer 7

• firms with biggest problems when installing ES: those that haven’t thought through its full business implications
• speedy implementation is wise - rash implementation not = needs careful deliberation
• management needs to be directly involved in planning and implementing in ES; cannot push responsibility down to technology department
  -> only manager is equipped to act as mediator between imperatives of technology and imperatives of business