Implementing enterprise systems

www.handels.gu.se

2023-04-09Centre for Business Solutions

Johan MagnussonCentre for Business Solutions

School of Business, Economics and Law

University of Gothenburg

Implementation

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Agenda

After the lecture, you will be able to:

1. Describe the implementation process

2. Evaluate potential pitfalls and risks involved in the implementation process

3. Explain the post-implementation and Second Wave phases of the ES lifecycle

www.handels.gu.se

2023-04-09Centrum för Affärssystem

Implementing Enterprise Systems

• High risk projects• 80% fail to follow set budget and time, 20-35%

are regarded as failures• Most common problems involve:– Lack of Executive Management Commitment– Insufficient or Inadequate Budgeting– Inadequate change management and training– Extensive modifications

Ganly, D. 2008. Address five key factors for successful ERP implementations. Gartner Group

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Change Management

• Multiple normative frameworks (7s, Leavitts diamant, 6 Sigma…)

• John P. Kotter– Establish a sense of need– Form a powerfull alliance – Create a vision– Communicate the vision– Get others to act– Plan for and create short wins– Consolidate improvements– Institutionalize new practice

Kotter, J.P. 1995. Leading Change: Why transformation efforts fail. Harvard Business Review, Mar-Apr.

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Business Process Reengineering

• Michael Hammer (1989)• Don’t automate, obliterate!• 1993: 65% of Fortune 500• Excuse for down/rightsizing• Severely questioned• Contributed to an increased focus on

processes• ”The fundamental ret-hinking and radical re-

design of business processes to achieve dramatic improvements…”

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Introducing a new system

• Installation and implementation• Two sides: technology and processes• Technology can be used as a battering ram• Large projects should be divided into smaller

ones• Project and change programmes• Big bang or Phased

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Case: Implementation at Hestra Inredningar AB

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Learning points

• Consider change• Engage the sub-process owners• Focus on processes• Create process maps that are living

documents• Strive for continuous improvements• The implementation is just the first

step

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A possible framework: ERP Scorecard

• Developed for SAP 2004

• Sold exclusively to SAP 2004/2005

• Targeted for SME

Magnusson, J. ; Nilsson, A. ; Carlsson, F. (2004). A conceptual framework for forecasting ERP implementation success : a first step towards the creation of an implementation support tool. International Conference on Enterprise Information Systems.

Management

Strategy

Leadership

Support

Competence

Project

Team

Management

Plan

External

Organization

Culture

Change

Process

Communication

System

Technology

Education

Users

Empowerment

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The investment

Do we let go too soon?

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Post-Implementation

• Why would you actually want to change your system?

• Added value through cosmetics, 3rd party suppliers and continued training

• Very few good examples of initiatives to drive the return of the investment ex-post.

• Benefits realization could be extended further than to the post-implementation meeting

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What happens after the implementation?

• The organization is tired• Exit the Consultants• Maintenance• Retreat and hybrid routines• No more rewards…• Status Quo

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Organizational change

• Institutionalize the change• Are we programmed for continuous

change? • Do we have the energy to continue?• Do we have the guts to continue?• Can we find support for additional

investments?

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2023-04-09

Post Implementation Evaluation (PIE)

• Ex-post evaluations are dubious• 20% of IT-related projects• Counter arguments– ”No impact…”– ”Obvious results…”– ”Hard to find data…”– ”Hard to find benefits…”– ”Hard to find the resources and time…”– ”Hard to find a base-line…”– ”It will be embarassing…”– ”Then the benefits will be realized…”

Centrum för AffärssystemGwillin, D., Dovey, K. & Wieder. (2005). ”The politics of post-implementation reviews”. Information systems journal, 15: 307-319

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Research Note: How can we measure impact?

• Framework developed by researchers, analysis conducted by Master thesis students

• Five Wholesalers, two years order data• Post-implementation focus • 3% mean-improvement in order

productivity• Read more: Ask et al. 2011

1 3 5 7 9 11 13 15 17 19 21 230.000

40.000

80.000

120.000

Ledtidsutveckling alla företag

Tid

Ledti

d, in

dex

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Second Wave Implementations

• Investments in securing benefits from previous investment

• Initiatives to:– Increase the usage– Increase the usability– Increase the scope of the ES– Adding of additional functionality– Adding of additional integrations– Re-design of processes

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Research Note: Second-wave measurements

• Study to be conducted…• Large Packaging solution company• ERP Go-live June 2009• All data from the business

opportunity-to-offering process for the first year

• Complemented with Margin Index and Hit-rate

• Study of Productivity and Efficiency• Second-wave project November

2010-January 2011• Re-take on PI-study after Second-

wave

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Recapitulation

1. Describe the implementation process

2. Evaluate potential pitfalls and risks involved in the implementation process

3. Explain the post-implementation and Second Wave phases of the ES lifecycle

Implementing enterprise systems

Business

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