Successful IS Project Implementation Strategies in ERP Systems

1. MIS 746 IS Project Management Dr. Honghui Deng Associate Professor MIS Department UNLV

2. Session 10: Project Implementation & Quality State of IS project success critical success factors key IS project factors Need for User Training Managing Quality

3. State of IS Projects • Most IS projects fail to some degree • time, cost, technical performance • Usually don’t know until late in the project • testing the least predictable project element • everything seems fine until the end

4. ERP & Hershey’s Supply Chain Stedman [1999] Osterland [2000] Songini [2000]

5. History • 1997 Hershey’s adopted a $110 million ERP system • SAP R/3 • Siebel CRM • Manugistics logistics package • To replace many legacy systems • Original 4 year project • Compressed to 30 months to precede Y2K • July 1999 three months behind schedule • Adopted big-bang approach to beat deadline

6. Hershey Business • Very seasonal • Halloween, Thanksgiving • Sept 1997 serious order processing & shipping problems • Shipping delays • Sent incomplete deliveries • Delivery time formerly 5 days, with ERP 12 days • Sales revenue dropped 12% from prior year • Inventory piled up at Hershey warehouses

7. Problem Diagnosis • Attempted ERP implementation in supply chain environment • That can be done • Confounding factors • During peak season • Tried to do too much as once • Complexity from CRM & Logistics Planning add-ons • Time pressure

8. Supply Chain & ERP • Can be done • Hershey’s was a bleeding edge pioneer • Hershey’s seems to have solved problems

9. Failure Types • Corresponding Failure • fail to meet design objectives • Process Failure • on time & within budget • Interaction Failure • system not used • Expectation Failure • doesn’t meet stakeholder expectations

10. Reasons for IS Project Failure Engler (1996) • Lack of Client Involvement • Lack of Top Management Support • project champion helps • Lack of Project Definition • includes clear plan, goals • also standards for testing

11. Implementation Planning Boehm (1981) • Stage Relative cost of defect removal requirements definition 1 design stage 3.5 coding stage 10 testing stage 50 after delivery 170

12. Key factors for software quality Phan, et al. (1995) • well defined quality goals • good management of reusable code • good quality assurance planning & control • effective feedback

13. Outsourcing • Avoid problems by hiring specialists • Becoming more popular • Faster, less expensive • Lose a great deal of control • Tradeoff: cost & time versus control • Don’t outsource core competencies

14. User Involvement • Meetings to specify design features • Meetings during project • Training • a key part of many projects

15. User Training • Can build great system • If users don’t use, system a failure • Sound training helps explain benefits of system • Common pitfalls • Focus on software rather than business processes • Focus on command sequences without discussing why • Skimping on training time • Tendency of users to solve problems the old way rather than learn the new system

16. Options to Deliver Training • Web-based virtual training • Computer-based training • Video courses • Self-study books • Pop-up help screens

17. Installation Options • Parallel Installation • very expensive • Pilot Operation • Cold Turkey • not recommended

18. Caveat Kirby (1996) • requisitioning information system • food producer, interact with 36 existing systems • High top management support • Heavy user involvement • Cost $3 million est., $5 actual; late • accountants saw system would replace them • plant people saw greater control by HQ • sales force saw imposition, monitoring

19. Summary for successful Implementation Top management support User involvement Clear system objectives • for successful implementation, need • implementation planning • early system testing • user training

20. Session 10. Managing quality • Many people joke about the poor quality of IT products (cars and computers joke) • People seem to accept systems being down occasionally or needing to reboot their PCs • There are many examples in the news about quality-related problems

21. 10. Managing quality • In one of the biggest software errors in banking history, Chemical Bank mistakenly deducted about $15 million from more than 100,000 customer accounts one evening. The problem resulted from a single line of code in an updated computer program that caused the bank to process every withdrawal and transfer at its automated teller machines (ATMs) twice. For example, a person who withdrew $100 from an ATM had $200 deducted from his or her account, though the receipt only indicated a withdrawal of $100. The mistake affected 150,000 transactions from Tuesday night through Wednesday afternoon. • In 1996 Apple Computer's PowerBook 5300 model had problems with lithium-ion battery packs catching fire, causing Apple to halt shipments and replace all the packs with nickel-metal-hydride batteries. Other quality problems also surfaced, such as cracks in the PowerBook's plastic casing and a faulty electric power adapter.

22. 10. Software quality – Gates & GM • At a COMDEX exposition, Bill Gates stated, “If General Motors had kept up with technology like the computer industry has, we would all be driving twenty-five dollar cars that got 1000 miles to the gallon.” • In response to Gates’ comments, General Motors issued a press release stating, “If GM had developed technology like Microsoft, we would all be driving cars with the following characteristics:

23. 10. Software quality – Gates & GM • For no reason whatsoever your car would crash twice a day. • Every time they repainted the lines on the road you would have to buy a new car. • Occasionally your car would die on the freeway for no reason, and you would just accept this, restart, and drive on. • Occasionally, executing a maneuver such as a left turn, would cause your car to shut down and refuse to restart, in which case you would have to reinstall the engine. • The airbag system would say ‘Are you sure?’ before going off.

24. 10. Software quality – Gates & GM • Occasionally, for no reason whatsoever, your car would lock you out and refuse to let you in until you simultaneously lifted the door handle, turned the key, and grabbed hold of the radio antenna. • Every time GM introduced a new model car, buyers would have to learn how to drive all over again because none of the controls would operate in the same manner as the old car. • You would press the Start button to shut off the engine.

25. 10. Quality matters • Several factors influenced system developers to consider system quality: • End user computing environment • User friendly tools • User satisfaction as surrogate for system success • Fourth generation languages/products

26. 10. Quality advantage • Emphasis on quality has several advantages: • Financial – maintenance, time • Operational – rework, bugs • Legal – privacy, security • Contractual – compliance • Customer relation – CRM • Reputation – image • Moral – being part of a winning team • Appraisal – performance evaluation

27. Motorola

28. 10. What is quality? • The International Organization for Standardization (ISO) defines quality as the totality of characteristics of an entity that bear on its ability to satisfy stated or implied needs • Other experts define quality based on • conformance to requirements: meeting written specifications • fitness for use: ensuring a product can be used as it was intended

29. 10. Quality management • Modern quality management • requires customer satisfaction • prefers prevention to inspection • recognizes management responsibility for quality • Noteworthy quality experts include Deming, Juran, Crosby, Ishikawa, Taguchi, and Feigenbaum

30. 10. Quality pioneers • Deming was famous for his work in rebuilding Japan and his 14 points • Juran wrote the Quality Control Handbook and 10 steps to quality improvement • Crosby wrote Quality is Free and suggested that organizations strive for zero defects • Ishikawa developed the concept of quality circles and using fishbone diagrams • Taguchi developed methods for optimizing the process of engineering experimentation • Feigenbaum developed the concept of total quality control

31. 10. Quality awards • The Malcolm Baldrige Quality Award was started in 1987 to recognize companies with world-class quality • ISO 9000 provides minimum requirements for an organization to meet their quality certification standards

32. 10. Quality management • Plan it: identifying which quality standards are relevant to the project and how to satisfy them • Implement it: evaluating overall project performance to ensure the project will satisfy the relevant quality standards • Monitor it: monitoring specific project results to ensure that they comply with the relevant quality standards while identifying ways to improve overall quality

33. 10. Pareto analysis • Pareto analysis involves identifying the vital few contributors that account for the most quality problems in a system • Also called the 80-20 rule, meaning that 80% of problems are often due to 20% of the causes • Pareto diagrams are histograms that help identify and prioritize problem areas

34. 10. Sample Pareto diagram

35. 10. Statistical sampling and standard deviation • Statistical sampling involves choosing part of a population of interest for inspection • The size of a sample depends on how representative you want the sample to be • Sample size formula: Sample size = .25 X (certainty factor/acceptable error)

36. 10. Six sigma and seven run rule • Operating at a higher sigma value, like 6 sigma, means the product tolerance or control limits have less variability • The seven run rule states that if seven data points in a row are all below the mean, above the mean, or increasing or decreasing, then the process needs to be examined for non-random problems

37. 10.Sample Quality Control Chart

38. 10. Fishbone diagram

39. 10. Testing • Many IT professionals think of testing as a stage that comes near the end of IT product development • Testing should be done during almost every phase of the IT product development life cycle

40. 10. Gantt Chart for building testing into a systems development project plan

41. 10. Improving IT project quality • Several suggestions for improving quality for IT projects include • Leadership that promotes quality • Understanding the cost of quality • Focusing on organizational influences and workplace factors that affect quality • Following maturity models to improve quality

42. Session 10: Project Quality & Implementation

43. 10. Discussion questions • Describe three factors that influence quality. • How would you plan for quality control? • Does statistical quality control make sense in all situations? • Do you find quality charts useful to your monitoring of quality. • Does seven run rule make sense to you?

44. 10. Discussion questions • The study by DeMarco and Lister showed that organizational issues had a much greater influence on programmer productivity than the technical environment or programming languages • Programmer productivity varied by a factor of one to ten across organizations, but only by 21% within the same organization. • Does this make sense?

45. 10. Discussion questions • The study found no correlation between productivity and programming language, years of experience, or salary • A dedicated workspace and a quiet work environment were key factors to improving programmer productivity • Does this make sense to you?