1. Why an ERP could be the magic
dust organisations need to
succeed.
Naeem Arif
26th February 2009
Arif Intelligence Ltd

2. Agenda
•
•
•
•
•
Why Implement an ERP
When to Implement an ERP
How to Implement an ERP
Other sources of CA
Associated Issues and Risks, including the aspect of
Change Management

3. Agenda
•
•
•
•
•
Why Implement an ERP
When to Implement an ERP
How to Implement an ERP
Other sources of CA
Associated Issues and Risks, including the aspect of
Change Management

4. What is an ERP
• ERP = Enterprise Resource Planning (Gartner 1990)
• A system for the entire organisation
• Move from the best of breed to a single software, sharing
a common database and common design
• Covering more than 1 business function, including;
–
–
–
–
–
–
Financials
Human Resources
Manufacturing
Supply Chain
Warehouse Managements
Customer Relationship Management

5. Before ERP
• Departments build and support their own “best of breed”
systems.
• Work on the different databases
• Various views of the truth, different tools for planning and
management of the organisation
• Multiple support contracts, reliance of interfaces and luck

6. After ERP
•
•
•
•
Departments work on the same database
Single View of the truth
Single view of customer
Reduced support costs, less Interfaces

7. Benefits & Purpose of an ERP
•
•
•
•
•
•
•
Improve efficiencies
Knowledge is Power
Single version of the truth
Supports the business process
Reduce time delays in processing information
Hold large volumes of data to support decision making
Provides an integrated solution to an organisations
“computer system” needs.

8. What Is Integration?
• Integration is the seamless interaction of technology,
processes, and thinking
– Process integration
• Business process alignment
– Technical integration
• Interfaces, third-party products
• Avoid bad/non-integrated solutions
– Process breakdown
– Passing of bad information within your system
landscape

9. A good ERP satisfies a number of people
Shareholders
Suppliers
MY ORGANIZATION
People
Process & Technology
Managers
Customers

10. Examples of ERP Software
•
•
•
•
•
•
JD Edwards Enterprise One & JD Edwards World from Oracle
Microsoft Dynamics GP (formerly Great Plains) from Microsoft
Paradigm from Consona Corporation
PeopleSoft from Oracle
SAGE ERP X3 from The Sage Group
SAP R/3 from SAP

11. Agenda
•
•
•
•
•
Why Implement an ERP
When to Implement an ERP
How to Implement an ERP
Other sources of CA
Associated Issues and Risks, including the aspect of
Change Management

12. Where do Projects come from?
• Formal strategy to gain the tools
• System replacement
• Emergent projects just happen
Deliberate strategy
Intended strategy
Realised strategy
Unrealised
strategy
Emergent
strategy
(Mintzberg & Waters, 1985)

13. Definitions of strategy
“…the
determination of the basic long-term goals and
objectives of an enterprise, and the adoption of
courses of action and the allocation of resources
necessary for those goals.”
(Chandler, 1962)

14. Management of Technology … Why are you here?
• Technology Management has been described as the
“key to success for companies anywhere in the world in
the coming years”
(Morita, 1987, p246)
• “Failure to exploit technological innovation leads to a loss
of competitiveness which in turn has an impact on
general economic development”
(Durham, 1986)

15. TM and the organisation
• TM is concerned with systems that transform inputs into
outputs
• A Tech system includes software, people, processes etc
• TM systems can be categorised in terms of input, output,
transformation, administrative, control
• aim of TM is make use of Tech to obtain CA
• TM needs to be aligned to the near and far environments

16. So ERP can provide a Control Mechanism

17. The ERP can do only do so much ….
Source of Competitive Advantage
Competitive Scope
Narrow target Broad target
Lower cost

Cost leadership
Cost
focus
Differentiation
Broad
differentiation
Differentiation
focus
(Porter, 1985)

18. Resources and capabilities
Resources comprise the tangible and
intangible assets of the firm.
Capabilities are the processes through which
resources are combined and co-ordinated.

19. Linking resources and capabilities
Industry key success factors
Competitive advantage
Strategy
Organisational capabilities
Resources
Tangible
- Financial
- Physical
Intangible
- Technology
- Reputation
- Culture
Human
- Skills/know-how
- Capacity for communication
and collaboration
- Motivation
Resources & Capabilities
(Grant, 2002)

20. Key Success Factor for your ERP
Prerequisites for success
How does the firm
survive competition?
What do customers want?
Analysis of competition:
•What drives competition?
•What are the main dimensions of
competition?
•How intense is competition?
•How can we obtain a superior
competitive position?
Analysis of demand:
• Who are our customers?
• What do they want?
Key success factors
(Grant, 2005)

21. Agenda
•
•
•
•
•
Why Implement an ERP
When to Implement an ERP
How to Implement an ERP
Other sources of CA
Associated Issues and Risks, including the aspect of
Change Management

22. How to Implement
• Numerous ERP implementation strategies
• Built on the basic principles of
–
–
–
–
–
Design
Build
Test
Go-live
Support (what happens after we go live?)
• Prince2, PMBOK, GDPM
• SAP has its own version

23. Project Managers Body of Knowledge (PMBOK)
Plan Do Check Act
Shewart-Deming
1.
2.
3.
4.
5.
Initiating process group – start of the project phase
Planning process group – planning objectives
Executing process group - delivery
Monitoring and Controlling process group – management team
Closing process group –
PMI

24. Characteristics of Projects
(1) Temporary
(2) Unique (different from a Steady State)
(3) Progressive elaboration, which is the evolution of the
original scope, process, requirements etc. This is
different to scope creep, this is more to do with process
and methodology.

25. Project Characteristics
•
•
•
•
•
•
Participant mix (internal, external, mixed)
Degree of standardisation
Project visibility
Business need
Size & complexity
Industry
(Gardiner)

26. Symptoms of Poor Project Mgt
• Project staff not seeing how their project fits in within the
‘bigger picture’
• Project staff being ambivalent about their projects
• Decision-making processes being unclear or slow
• Senior management unsupportive when problems with
project occur
• Staff equipped with inappropriate skills being recruited
into projects
• Working on projects and programmes being seen as a
poor career path
(Williams and Parr, 2004)

27. Benefits Management
• Identify expected benefits that will be delivered by a
programme
• Establish a benefits management structure defining
processes, relationships, communications, roles and
responsibilities
• Develop models to structure the programme benefits,
including immediate and final outcomes
• Asses how the benefits are interrelated
• Develop a realisation plan
• Define accountability
(Williams and Parr)

28. Agenda
•
•
•
•
•
Why Implement an ERP
When to Implement an ERP
How to Implement an ERP
Other sources of CA
Associated Issues and Risks, including the aspect of
Change Management

29. BPR
•
•
•
•
Business Process Re-Engineering
Reviewing and re-creating the business process
Driven by issues or need to become more efficient
Process driven or System driven?
• Business Transformation is Process Driven
• Technology projects are System Driven
• BPR doesn’t need a system project

30. Sharpbenders
Companies achieving a sharp and sustained improvement
in performance by means of:
•
•
•
•
•
•
Major changes in management
Stronger financial controls
New product-market focus
Improved marketing
Significant reductions in production costs
Improved quality and service
(Grinyer, Mayes and McKiernan, 1988)

31. Agenda
•
•
•
•
•
Why Implement an ERP
When to Implement an ERP
How to Implement an ERP
Other sources of CA
Associated Issues and Risks, including the aspect of
Change Management

32. Project Failures
• Beware of “ambitions for a better society” – people want
what they want.
• New technology produces new trajectories and new
horizons – but people still want to be in control (e.g. pilots still
want to control the plane, even thought the information is there).
• New technology may replace old, but not always for the
good? Sometimes old needs to sit with new (e.g. Paperless
office not possible, but we have certainly reduced the need for paper records).
• New technologies may have other side effects –
e.g. online
shopping (change of employment profile, delivery van still needed to deliver your products)
• You can’t replace everything – e.g. people may still want to go into town and have
a wonder around the shops
• Sometimes the innovation does not meet all that was
specified at the outset – you maybe let down by it.
Geels and Smit (2000)

33. Why manage Change
• Implementing a change to a system or a process
requires a review of associated Change
• Its basic common sense, if you changing the colour of
the curtains – check with your wife first
• User Acceptance
• Reduce delays to getting the benefit
• Use the system for what was designed

34. Knowledge Acquisition
• Experience Accumulation – e.g. learning by doing lots of
something
• Knowledge Articulation – after the project, running a
review of the project, appraisal etc.
• Knowledge Codification – project experience in
converted in documentation/procedures etc.
(Prencipe & Tell)

35. Agenda
•
•
•
•
•
Why Implement an ERP
When to Implement an ERP
How to Implement an ERP
Other sources of CA
Associated Issues and Risks, including the aspect of
Change Management

36. Why an ERP could be the magic
dust organisations need to
succeed.
Naeem Arif
26th February 2009
Arif Intelligence Ltd