Week 6 - Enterprise systems Flashcards

1
Q

ERP system is a packaged business software that: (4)

A
  1. automates and integrates the majority of business processes within an organization
  2. enables sharing data and common practices across the enterprise
  3. provides real-time access to information
  4. ERP integrates all departments and functions across a company into a single computer system
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2
Q

The functions of IS in an enterprise (5)

A
  1. Sales
  2. Accounting
  3. Logistics
  4. Procurement
  5. Human Resources
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3
Q

Progression from traditional to ERP (4)

A

IT structure within companies:
1. Traditionally: IS support individual business units
2. ERP: Integrates information from all business units
IT sourcing:
3. Traditionally: IS were developed in house or by order
4. ERP is off-the-shelf software

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4
Q

History of ERP (4)

A
  1. 1960s: inventory management & control
  2. 1970s: MRP
  3. 1980s: ERP
  4. 1990s: ERP 2 (cloud-based)
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5
Q

Initial Investment (2)

A
  1. Large companies: $100m-200m

2. Small companies: $ 1m

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6
Q

Cost breakdown (5)

A
  1. Consulting (30%)
  2. Hardware (25%)
  3. Software (15%)
  4. Deployment team (15%)
  5. Training (15%)
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7
Q

How long does an ERP implementation take?

A

1-4 years

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8
Q

Benefits from ERP systems (7)

A
  1. Inventory reduction
  2. Personnel reduction
  3. Productivity improvement
  4. Order Management improvement
  5. Financial close cycle reduction
  6. IT cost reduction
  7. Procurement cost reduction
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9
Q

ERP Challenges People (3)

A
  1. change management
  2. training
  3. staff adequacy and training
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10
Q

ERP Challenges Process (2)

A
  1. process reengineering

2. requiring ongoing support

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11
Q

ERP Challenges Technology (2)

A
  1. Software functionality

2. Upgrades

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12
Q

SAP (2)

A
  1. SAP: systems applications, products

2. ERP has over 10 core modules: finance, HR, e-commerce, analytics, banking, project management…

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13
Q

Oracle e-Business Suite

A

Includes Oracle database, CRM , financials, logistics, order management, and warehouse management systems

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14
Q

Microsoft - Microsoft Dynamics (2)

A
  1. aimed at smaller companies

2. Includes accounting, finance, HR, and CRM modules

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15
Q

To customize or not?

A
  1. ERP is essentially about integration and standardization

2. despite “best practices” built in ERP and business processes may not fit

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16
Q

Configuration (2)

A
  1. Configuration possibilities range from module selection, master data provision, to adjusting access rights for different users
  2. These configuration settings cover anticipated variability
17
Q

Customization (2)

A
  1. Customizations are source code-based adaptations

2. unanticipated variability

18
Q

Vanilla implementation

A

use system modules as intended (no customization)

19
Q

reasons to consider vanilla implementation (4)

A
  1. relatively straightforward business practices that are not unique
  2. no skill or experience in building or changing systems
  3. all branches of the business run the same version of ERP in a single instance, and enter and retrieve data in a similar fashion
  4. Standardizing: integrating process and IS’ at an enterprise-wide level is less complicated when modules have the same version, without mods
20
Q

Which sort of business can choose for Customization?

A

Business that do have highly skilled IT developers and a proven development process, can change the system to match the processes (e.g. code; interfaces; screens)

21
Q

Customization Benefits

A

Helps minimizing the risk of a project failure

Addressing organizational change may require modifying the system in order to meet the needs of the business, and will help to minimize risk of project failure

22
Q

Drawbacks of customization (3)

A
  1. In case of an upgrade, each modification will need to be analyzed to see if it needs to be incorporated or not
  2. An upgrade can turn into a re-implementation, which requires more resources and time
  3. Much of IS literature suggests: no customization
23
Q

Package-Organization Misalignments

A

Even for companies that follow “best practices”, vanilla implementation is often not feasible

24
Q

Siah and Soh’s Research Objective (2)

A
  1. Provide a theoretically grounded framework for systematic assessment of the extent and severity of misalignments
  2. Understand when customization and when organizational adaptation is more appropriate to resolve misalignments
25
Q

Institutional theory (3)

A
  1. Siah and Soh (2007) used institutional theory and systems ontology
  2. misalignments arise when institutional structures in packages differ from those of the implementing organizations
  3. Ontology as a branch of philosophy that is used to describe the nature of these institutional concepts, and can be used to study misalignments.
26
Q

Imposed Structures

A

are the result of external demands made one the organization by authoritative sources such as government, professions, and established industry practice

27
Q

Voluntary Structures

A

developed as a result of an organization’s history and experience, strategy, and management preferences

28
Q

Ontology and misalignment (2)

A
  1. Premise: for an information system to be stable, its structure must represent a “good” mapping to the real world it seeks to model
  2. From an ontology perspective, misalignments are instances where crucial aspects of the real world are not adequately represented by the model embedded in the package
29
Q

Deep-structure misalignment

A
  1. Deep structure conveys the core meaning of the real-world system that the information system is intended to model
  2. Deep-structure package-organization misalignments
  3. db structure of children’s hospital > mother and child
30
Q

Surface-structure misalignment (3)

A
  1. Surface structure is concerned with how real-world meanings are conveyed through the interface between the information system and its users
  2. surface-structure misalignments arise when the way users in the real world use information, differs from the interface
  3. customer service need to see client transaction and past transactions on the same screen
31
Q

Imposed-Deep

A

missing or inappropriate thing, property, state or transformation arising from different country or industry assumptions

32
Q

Imposed-Surface

A

Missing or inappropriate access, input, presentation, or output arising from different country or industry assumptions

33
Q

Voluntary-Deep

A

Missing or inappropriate thing, property, state, or transformation arising from organization-specific assumptions

34
Q

Voluntary-Surface

A

Missing or inappropriate access, input, presentation, or output arising from organization-specific assumptions

35
Q

Imposed-Deep Example (critical)

A

Failed SAP implementation at Fox Meyer partly attributed to critical mismatches between an early ERP system designed for manufacturing but implemented in a wholesale business

36
Q

Imposed-Surface Example (less severe)

A

Non-negotiable external requirements preclude changing organizational requirements to conform to the package > reporting format for compliance

37
Q

Voluntary-Deep Misalignments (can be modified, but takes effort)

A

Hershey hired temporary storage for dealing with cyclical demand for candy. The ERP implementation cost Hershey $150 million in lost sales because the temporary storage locations were not represented as storage entities in the EPR’s data model

38
Q

Voluntary-Surface (relatively mild)

A

e.g. management reporting formats; habits

39
Q

Siah and Soh results (4)

A
  1. The majority of imposed-deep were resolved via package customization
  2. Imposed-surface and voluntary-deep misalignments were more often resolved via organizational adaptation
  3. Voluntary-surface misalignments are almost always resolved via organizational adaptation
  4. the extent of project success also appeared to be influenced by the number of misalignments and the proportion of imposed-deep misalignments