Large enterprise system implementation challenges

Matti Rossi – Inaugural lecture 3.10.2012

Aalto University School of Business

Excerpts from Bio

• Editor in chief of Communications of the Association for Information Systems

• One year visits to Georgia State Univ., RSM Erasmus and Claremont Graduate College

• Minority owner and former board member of MetaCase Consulting (www.metacase.com) a spin off of the thesis project

Introduction

Enterprise system (ES): • Integrates and standardizes the core business processes

and information resources of the whole organization• Provides a single system that allows information to be shared

across all functional and management levels• Provides unified data definitions and semantics across an

organization• Provides standardized processes and user interfaces across

the organization

Major disasters and challenged projects

• Finnish national railways ticketing system (2011)• Finnish national electronic patient record system and

database (2002 – )• Ajoneuvorekisteri (2000 – 2011)• …

• Taurus: London Stock Exchange System, developed for 10 years, at the cost of 700 mil £, and never deployed (1983 – 1993)

• Nearly all major public sector IT initiatives in last 10 years have been seriously delayed and/or have exceeded their budgets

Typical problems

• Delayse.g. New Taurus project manager after 5 years of

development: “are we any closer to the end?”Project was scrapped in the end

• Cost overrunse.g. Taurus initial estimate 11mil. £, final costs somewhere

between 400 – 800 mil. £• Performance underruns

e.g. Finnish national railways ticketing system problems

• Delivering in time and on budget, but wrong systeme.g. Finnish e-health records

Why this matters?

• Systems developed, but not delivered, can cause tens or hundreds of millions of € worth of losses

• E.g. Taurus• Poorly functioning systems can cause delays, poor morale or

even absenteeism or early retirements• E.g. Healthcare systems

• There are cases where an ES implementation gone bad has bankrupted companies

• E.g. FoxMeyer logistics*

*Scott, Judy E., & Vessey, Iris. (2002). Managing risks in enterprise systems implementations. Commun. ACM, 45(4), 74-81.

Can something be done for this?

• Generally technology is not an issue• Large scale change processes are always difficult• Change and project management are critical for such

projects• Project and system scope and fit with the organization have

to be matched in early phases of the project• Projects should be made more manageable by:

• Dividing them into manageable pieces• Sequencing the implementation

• Being better buyers• Demanding more from the sellers

Suggested solution seeking:ENACT – ERP Development Networks in Action

4 year Academy of Finland project

See enact.lut.fi for more info

Research consortium

Systems development methods and practicesAalto University, Department of Information and Service Economy

Prof. Matti RossiPost Doc Researchers Hilkka Merisalo-Rantanen and Riitta Hekkala

Doctoral candidateErkka Niemi

Software engineering related requirements, quality factors, metrics and feedback mechanisms

Lappeenranta University of Technology, Software Engineering LaboratoryProf. Kari Smolander

Knowledge management and knowledge transfer, human communication and interactions

Tampere University of Technology, Department of Business Information Management and Logistic

Prof. Samuli Pekkola

Research objectives

Empirical identification of actors in selected ERP development projects

Observation of communication and knowledge exchange between the identified actors: e.g. ERP core developers, ERP consultants, local ERP administrators and users, facilitates,

Building an empirically grounded theoretical model to support ERP development in the network

Identification of important quality factors in ERP projects and development of metrics based on these factorsActive deployment of new development methods and practices

including but not limited to ERP core developers, ERP consultants, and local ERP administrators

Research approach

Action Design Research (ADR) to build new tools, methods, and practices

Sein, Maung, Henfridsson, Ola, Purao, Sandeep, Rossi, Matti, & Lindgren, Rikard. (2011). Action Design Research. MIS Quarterly, 35(2)

Expected results 2012-2016

Theoretical:

• Identification of ERP development network actors and practices• Model of communication and interaction practices in ERP development

networks• Model of information flows, including quality metrics

• Integrated and scientifically evaluated tools and methods for ERP development• Improved and validated ERP development processes

• Understanding of the alignment of development methods in complex ERP development networks

Practical:

• Improved competence of ERP implementers through project result dissemination

• Avoidance of wasted effort!

How can this help?

Identification of ES development network actors and practices• Clearly identified roles and responsibilities

• Less finger pointing afterwards• Improved accountability

Improved competence of ES implementers • Fever disasters

• A slightly better chance of success• In some cases systems that actually make life easier

• E.g. Finnish tax systemsAvoidance of wasted effort

• Lot of tax payer or company money saved• Hugely improved quality of life for all stakeholders

burdened with ES/ERP implementation projects

Thank youfor your attention!

Contact information

• Matti RossiE-mail matti.rossi@aalto.fiGSM 050-3835503

Visiting address:Aalto University School of BusinessChydenia buildingRuneberginkatu 22-24

Further reading

• Nandhakumar, J., M. Rossi, et al. (2005). "The Dynamics of Contextual Forces of ERP Implementation." Journal of Strategic Information Systems 14(2): 221-242.

• Mattila, M., Nandhakumar, J., Hallikainen, P., and Rossi, M. (2010) “Reorganizing Projects through Enterprise System, Emerging Role of Enterprise System During Radical Organizational Change”, Proceedings of HICSS-43, IEEE Computer Society, Koloa, HI, 2010 (Best research paper award)