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