MBA 570: Info & Knowledge Management Systems

ERP System
Instructor: Frank Ezinga

By James Jung

Enterprise Resource Planning System

Integrating working
environment
Standardized process
Operating benefits

Enterprise Resource Planning System

Enterprise Resource Planning System

Many researchers and practitioners agree that
enterprise resource planning systems are the most
important development in terms of corporate use of
information technology (Jiang, Klein, Shih & Wang,
2008, p. 1609)

Enterprise Resource Planning System

There is a significant risk behind the implementation
of an ERP system
1) Difficult
2) High cost proposition as it places tremendous
demand on organizations time and resources

Enterprise Resource Planning System

UK government scraps the 12 billion National program for
IT in the NHS
In 2012, the largest public IT project of all time, an attempt to
provide electronic health records for all of the country's
citizens.
Failed to produce a workable system, despite massive spending
outlays that have been estimated at about 12 billion (US$18.7
billion).
The U.K.'s Major Projects Authority concluded the project was
"not fit to provide the modern IT services that the NHS needs."

Enterprise Resource Planning System

SAP project woes impact Ingram Micro's
profits
In April, massive technology distributor
Ingram Micro announced that problems with
an SAP project in Australia had made a
significant dent in its first-quarter profits.
Primarily attributable to difficulties
transitioning to a new enterprise system in
Australia"

$70.3
million

$50.3
million

Critical Failure Factors

It has been found that the mismatch between ERP and
organization can have significant impacts on
organizational adoption, and this could be the main
reason causing the ERP implementation failure.

70%

Failure

Success

Critical Failure Factors

1. Poor project management effectiveness
-. Due to limited ERP knowledge, capability, and poor
project management skills, many companies project
managers could not exercise effective project
management
of ERP implementation.
Monitor
Plan
Lead
Manage

Implementation
Failure!

Critical Failure Factors

2. ERP Software misfit
- Poor ERP selection and evaluation process
For example:
- Inefficiently managing a high volume of product
master files
- Unable to design complicated bills of materials and
production planning formulation

Critical Successful Factors

1. Leadership and Top management commitment
A review of successful ERP impementations has shown that
leadership and top management commitment are the most critical
factors in organizations embarking on ERP implementation.
-. Create clear objectives
-. Development a work plan
-. Carefully monitor progress
-. Manage the budget
-. Assign Responsibilities

Critical Successful Factors

2. Communication
3. Education and Training
- Training and education is vital in implementing an ERP
system because employee (user) knowledge and
understanding is needed in order to create buy-in.
- Employees should be properly trained in order to use
and solve the business processes that are involved
within the ERP system

Questions
SAP project woes impact Ingram Micro's
profits
Question:
- This company implemented ERS into their
organization to improve their operation
effectiveness and competitiveness. However,
their revenue dropped significantly due to the
implementation. What is your recommendation? $70.3

million

$50.3
million