Assessing and Managing the Benefits of Enterprise Systems

1. Assessing and Managing the Benefits of Enterprise Systems Mike Mazza BUS-550

2. Customer Relations Management

3. Human Resources Management

4. Financial Resource Planning FRP

5. Manufacturing Resource Planning

6. Supply Chain Management

8. Criteria for Assessment Q: From who’s perspective? Senior Manager? Business Unit Manager? A: Depends on which business factor

9. Criteria for Assessment Q: Domain of Study, Level & Purpose A: ES impact on firm’s organizational and functional levels for the purpose of managing and improving ES 3-Year time frame for the upcoming study

10. Criteria for Assessment Q: What types of data will be used and against which referent A: SubjectiveData (ie..financial ratios) A: Perceptual (OOI) = Overcoming Organizational Inertia A: Optimal Success or Stated Goals

11. OBES Model Organizational Benefits from system use of Enterprise System

12. OBES Model Overview LONG TERM BENEFITS MODEL can be achieved by following SHORT TERM BENEFITS MODEL

13. Short-Term ModelDependent Variable • Dependent variable (what we want to achieve) • Organizational benefits from system use from perspective of management *For This Project*

14. Short-Term ModelIndependent Variable I • Functional Fit (FF) is the extent to which the functional capabilities embedded and configured within an ES package match the functionality that the organization needs to operate effectively. Example - Features and Fields • Delivered and measured project by project

15. Short-Term ModelIndependent Variable II • Overcoming organizational inertia (OII) is the extent to which members of the organization have been motivated to learn, use, and accept the new system. • Change management important • Concentrate on measuring project by project

16. Long-Term ModelDependent Variable • Dependent variable (what we want to achieve) • Organizational benefits from system use from perspective of senior management

17. Long-Term ModelIndependent Variable I Integration of Information Systems: Unification of processes, systems, and/or data from multiple systems…not necessarily in the ONE organization. Links efforts of units through shared data. Has sufficient integration occurred?

18. Long-Term ModelIndependent Variable II Process Optimization: Have the projects improved the efficiency and effectiveness of the organization’s processes?

19. Long-Term ModelIndependent Variable III Improved access to informationto key organizational decision makers. Does ES provide quicker access to relevant, accurate information?

20. Long-Term ModelIndependent Variable IV On-going major ES improvement The number and extent of investment in major business improvement projects for improving and extending its ES. Implementation -> Customize -> Upgrade-> To other business units ->

21. OBES Model

22. Strength of Evidence

23. Perceived Net Benefit Flow PNBF: Reflects manager’s assessment of Net Benefit progress over initial 3 Year period from “Go Live”

24. Operational PNB • Operational Benefits include: • Labor, Inventory and Administrative cost reduction • Customer and Employee Support cycle time reduction • Productivity, Quality and Customer Service Improvement FROM: Business managers asked about value chain benefits

25. Managerial PNB • Improved resource management • Improved decision making and planning – Real time analysis for effective strategic planning • Overall performance improvement - Financial, manufacturing, overall efficiency and effective management. FROM: Business managers asked about goal achievement

26. Strategic PNB • Support business growth • Support business alliance via easy consolidation and integrated resources • Enhance innovation • Build cost leadership via streamlining operations • Enabling world wide expansion • Support e-commerce FROM: Senior Mangers asked about strategic goal achievement

27. IT Infrastructure PNB • Provide immediate flexibility and extendibility to external stakeholders • Lower cost of change • Reliable single platform • Continuous, customizable improvements FROM: IT managers asked about cost and technology changes

28. Organizational PNB • Improved work patterns via coordination and harmonization between departments • Shortened learning curves • Overall improvement in organizational skill level • Building common/consistent vision across organizational levels FROM: Business managers asked about attitudes and cross-functional successes

29. Organizational PNB cont. • Shifting work focus to customer, market and process • Increased moral and satisfaction due to improved access to information, increased efficiency and knowledge FROM: Business managers asked about attitudes and cross-functional successes

30. PRESENTATION QUESTION #1 Q - What acronym did Lee, Wrangler, Northface & Reebok assign to their customized ES? • (CAS) Consolidated Apparel Solution • (APS) Apparel Production Solution • (AFS) Apparel Footwear Solution

31. PRESENTATION QUESTION #2 Q - Which independent variable does not belong in the Long Term Benefits Model ? • Process Optimization • Integration • Functional Fit • Improved Access to Information

32. PRESENTATION QUESTION #3 Q (3a) What kind of graph is this  Q (3b) For what domain? • Organizational • Strategic • Managerial • Operational Perceived Net Benefit Graph

33. Sources Seddon & Shang, (2002). Assessing and managing the benefits of enterprise systems: the business manager’s perspective. Information Systems Journal, 12, 271-299 http://cba.uah.edu/guptaj/m680/erpbenefits.pdf Seddon, Calvert & Lang, (2010). A Multi-Project Model of Key Factors Affecting Organizational Benefits From Enterprise Systems. Management Information Systems Quarterly, (34)2, 305-328 http://aisel.aisnet.org/misq/vol34/iss2/7/