Research identifies the areas where problems occur with
enterprise software roll-outs, says Chris
Westrup
Enterprise resource planning systems are often
associated with delays, missed targets and negative publicity in
the press.
However, initial findings from a qualitative research project being
conducted by a joint research team from Manchester Business School
and the Lancaster Management School indicate that concerns that ERP
can be "digital concrete" for business processes are
misplaced.
Over the past two years the research team has explored the
European-wide operations of two large multinational organisations
and a UK-based national utility company which have recently
implemented ERP systems.
In addition, the researchers are studying the internal sales and
organisational practices of a large European ERP software
supplier.
Their research has highlighted four key challenges that
organisations must overcome if they are to get better value from
ERP projects.
The first challenge is making the most of information extracted
from the ERP system.
Users of ERP systems must work out how to make optimal use of the
information that resides in the system. Despite the widespread use
of tools such as SAP Business Warehouse, managers often face
problems getting information from ERP systems beyond what is
provided by standard reports.
The datawarehouse application is viewed by many as being both too
complicated and overly flexible.
For instance, one of the companies analysed, a global manufacturing
firm, had dedicated staff in each region whose job it was to
produce reports out of the datawarehouse tool. People working at
the centre, however, then found themselves having to collate
non-comparable reports produced by people with different levels of
expertise at different regional centres.
Finance staff had a different problem because the datawarehouse was
producing data that was far too generic and simplistic to be of any
use to them.
One survey respondent said, "The system generates variances which
are not very helpful. In fact, they are no help at all. One of the
problems we have had is that we have not been able to find anybody
to tell us how the system is calculating these variances."
Challenge number two is using ERP across a large geographical area
and satisfying different business units.
Much work is being expended on trying to work around local cultural
and institutional differences. National legal differences and local
market conditions are key constraints.
Challenge three is the ongoing development of ERP systems and
dealing with end-user requests.
Managers find that the ideal of an initial implementation followed
by a period of stability is difficult to achieve. Attempting to
pursue this goal can even be detrimental, jeopardising user
experiences of the system.
The research found that user requests originally written into the
first phase of implementation are often deferred because of time
pressure.
In turn, upgrades typically entail a freeze on these ongoing
requests for enhancements. Deferment of improvements creates
tensions between IT and users which managers need to be aware of if
the ERP system is to be utilised to its full potential.
Furthermore, users are sometimes unable to identify the value of
upgrades, particularly when there is little obvious and immediate
benefit to them.
It would be easy to argue that suppliers need to better explain the
value of upgrades to users. However, in practice this task falls on
information officers employed by ERP user organisations. That is to
say IT managers have the extra burden of speaking for the ERP
software supplier as they negotiate and manage upgrades,
enhancements, and cost reductions.
Chris Westrup is a senior lecturer at Manchester Business
School
- A workshop entitled Knowledge, beyond business transformation
will tackle the issues discussed above in more depth. It will be
held on 4 May at the Manchester Business School
www.mbs.ac.uk/ebk
