Digging deeper into ERP

1. Digging deeper into ERP Leveraging the material to date

2. Analogy with Taylorism • first attempt to systematically analyze human behavior at work • attempt to make organizations look like machines – easier to fix and update • look at interaction of human characteristics, social environment, task, and physical environment, capacity, speed, durability, cost • reduce human variability

3. The two levels of Taylorism • Practical intelligence – workers • Conceptual intelligence – managers • Mediated by the administration function of the firm

4. Principles of Scientific management • describe and bread down a task to its smallest unit; science for each element of work • restrict behavioral alternatives facing worker • remove worker discretion in planning, organizing, controlling • use time and motion studies to find one best way to do work • provide incentives to perform job one best way -tie pay to performance • use experts (industrial engineers) to establish various conditions of work

5. Impacts and problems • new departments- • industrial engineering, personnel, quality control • growth in middle management • separation of planning from operations • rational rules and procedures • increase in efficiency • formalized management, mass production • human problems • dehumanization of work; sabotage, group resistance, hated by workers

6. IS and Taylorism “One reason, then, that we expect top acceptance of information technology is its implicit promise to allow the top to control the middle just as Taylorism allowed the middle to control the bottom.” Leavitt and Whisler (1958) The computer and the new decision-making techniques associated with it are bringing changes to white-collar, executive and professional work as momentous as those that the introduction of machinery has brought to manual jobs. Simon (1977)

7. ERP is the closest we have come • Earlier forms of systems have not had such an impact on middle management • No one has studied to what extent these changes are positive • Taylor has been somewhat discredited after all One must consider the impact of IT in terms of a "radical re-organisation of middle management [...], with certain classes of middle management jobs moving downward in status and compensation (because they will require less autonomy and skill), while other classes move upward into the top management group.“ Leavitt and Whisler (1958)

8. Parameters in ERP implementations • Integration • Application • Services • Standardisation • Business practices • Centralisation • Decision making • Control • Acceleration • Information flows • Business cycle • Cost reduction And the two levels at play are: Top management Users of ERP system: Managers at local level / Operators It is very similar to Taylorism

9. Second degree impact • Trivialisation of tasks • Automation of decision making • Middle managers should be monitoring How the system is being used – system process versus physical process • How does this fundamentally affect the firm? • HRM / change management • Knowledge management / Know how • Responsiveness • What will the firm look like?

10. Two interpretations of the same story… • Software vendors are like the Sorcerer’s Apprentice • They created software that has dangerous side effects • Managers are ignorant of the impact they are having when implementing ERP • Software vendors have finally delivered on top management everlasting dream of grinding the firm to its simplest form. • Top managers knowingly use ERP as Trojan horse for imposing restructuring of a kind that would not be acceptable otherwise.

11. So is ERP: Or: ?

12. Evidence Scenario 1: • Case studies of reported problems – Hershey / Whirlpool • Belongs in the past? • Scenario 2: • Exemplar case studies – Microsoft / Erickson • Modern scenario?