Week 10

Q2. Using Sumner (2005) read the article on pages 149 – 150. Answer the following:

A. What aspects of BI have been employed in this case example?

The case study of Dow Corning states that in Phase 2, Dow Corning’s business intelligence strategy, takes advantage of SAP’s business information warehouse (BW).

SAP Netweaver Business Intelligence (SAP BI) is the more recent name of the analytical, reporting and data warehouse solution developed by SAP AG. The name was originally SAP BIW (Business Information Warehouse) and abbreviated to SAP BW as noted in Sumner’s featured article, but is now known as “SAP BI” at the end user level. BW is used to describe the underlying data warehouse area and accelerator components and is an operational system used to run the business.

The layers that make up the structure of the SAP BI solution are as follows:

• Extraction, Transformation and Load (ETL) layer – this layer extracts the data, applies rules and loads the information into the data warehouse. The (middle layer) BW Server administers the BW system, stores the data and retrieves data upon user request.

• Data Warehouse Area – (bottom layer) R/3 source systems – this area stores information in various types of structures, for example, Data Store Objects, InfoObjects and multidimensional structures called InfoCubes (middle layer) star schema design. Many analysis cubes for specific business purposes may be very costly and time-consuming.

• Reporting – (top layer) uses Business Explorer to access the information in the data warehouse and presenting it in a user-friendly format to the user.

• Planning and analysis – (middle layer) Data Mart – provides tasks such as budget calculation capabilities for the user

• Data warehousing with SAP BW provides integration, consolidation, storage, transformation, cleanup and retrieval for analysis and interpretation. The tool used for data warehousing tasks in SAP BW is the Administrator Workbench.

In summary, Dow Corning uses SAP BW that is a data warehouse that has a data mart which is a subset of the data warehouse information. A data warehouse will not work if information is missing, inconsistent or inaccurate. Data integrity is assured through resolving inconsistencies, performing a gap analysis and using consistent formats for data entry. Business analysts at Dow Corning may use SAP BI data mining to predict product and market trends in the future.

B. What would you expect to be the challenges facing the development of a BI approach for such a large organisation?

According to Atre (2003), “Organizations must understand and address these 10 critical challenges for BI success”.

Business Intelligence (BI) projects fail for the following reasons:

1. Failure to recognize BI projects as cross-organisational business initiatives and understand the differences from typical standalone solutions;
2. Unengaged business sponsors;
3. Unavailable or unwilling business representatives;
4. Lack of skilled and available staff, or sub-optimal staff utilisation;
5. No software release concept (no iterative development method);
6. No work breakdown structure (no methodology);
7. No business analysis or standardisation activities;
8. No appreciation of the impact of dirty data on business profitability;
9. No understanding of the necessity for and the use of meta-data;
10. Too much reliance on disparate methods and tools (i.e the silver bullet syndrome).

Naveen identifies the following BI system critical success factors for business intelligence implementation:

a. Business driven methodology & project management;
b. Clear vision & planning;
c. Committed management support & sponsorship;
d. Data management & quality issues (change management);
e. Mapping the solutions to the user requirements;
f. Performance considerations of the BI system;
g. Robust & extensible framework.

The folllowing are points to increase benefits for a BI project.

• determine the tangible benefits such as eliminated cost of producing a legacy report;
• Enforce access to data for the entire organisation;
• BI project be driven by other business initiatives with the business cases supported by an organisations Enterprise Architects that can identify suitable business projects.

Dow Corning has many large business units and subsidiary units to integrate internal data and has more than half of its global operations with external data that may differ in code and context from each geographical location. BI may be complex and time-consuming if the data structure of the internal data and external data is inconsistent, but if not, BI will provide managers with good decision making information.

C. Would Dow Corning be a suitable candidate for a shared services approach using an ASP? Justify and argue your answer.

It is not likely that Dow Corning will be a suitable candidate for shared services approach using an Application Service Provider (ASP) because the shared service approach is more suited to small to medium sized (SME) companies that have simple and flexible operations. The ASP provides cost efficiencies and ERP products off the shelf for a monthly fee or is rentable over the web, but do not come without risks (i.e. upgrades, stability, reliability, authenticity, privacy, security, downtime, errors, contracts) and with robust ERP solutions that are suited to large organisations such as Dow Corning. In netsourcing, the ERP system runs the business and the IT department maintain responsibility for the ERP development which may be a leadership, control and security risk in a large organisation. Overall, due to the size of Dow Corning, the risks may outweigh the purported cost efficiencies.

Post an entry to your blog that answers the following questions:
Reflections on Course 12073

1. What was the most difficult assessment item you completed so far in COIS12073 this term?

Assignment three (3) was the most exhausting piece of work.

2. What was difficult about it and how would you suggest it could be improved?

Time management for research and finding ERP scholarly information from magazines and publications applicable to Cisco was somewhat difficult and challenging. A suggestion would be to start research in week 1.

Acronyms were too plentiful throughout the course and in many cases had to be reviewed from previous articles/ weeks work for memory. There are many acronyms in context of a particular workplace that become familiar to one in time, but it is difficult to learn and remember so many in such a short time frame. This situation resulted in more time required to complete the work with a comfortable level of understanding.

In a real world, cases would need to be done in a short timeframe, however it would not be as difficult if one was a practicing consultant in this type of industry. Improvements would be to narrow the case study for students, as the direction was too broad and therefore involved over extensive research and time needed to collate useful information for justifying a real and meaningful argument for the chosen option.

3. If you could provide three (3) pieces of advice to a student who will be doing this course next term what would they be?

1. Start research in Google Scholar, Emerald and Proquest in week one (1) for your annotated bibliography and relate it to the case study criteria using excellent time management skills.

2. A few extra hours per week for reading, research and blogs are critical to your success in this course.

3. Read the lecturer weekly notes for additional useful information prior to completing your weekly blogs. Read the chapters, module notes, course profile and case study marking schedule outline before attempting assessable pieces of work and try not to be overwhelmed by acronyms. Perhaps develop a glossary of terms/ acronyms for your benefit.

4. How will you be able to use this knowledge/these skills in your future career?

The knowledge and skills gained in this course will be valuable in my current workplace. It will be interesting to watch the organisation opting for an ERP solution to reengineer the business processes, develop a project management plan and progress further along after the vendor and their best practices have been selected. The IT enterprise architect of the organisation suggests a vanilla ERP solution, however after research and investigation and the knowledge gained from this course, it is the writer’s thoughts that the organisation is more suited to the ERP module approach. In the long term, the benefits will exceed the costs. Further, it will be interesting to further research and compare new ERP technology systems models, development and business trends in future years.

Atre, S 2003, The Top 10 Critical Challenges for Business Intelligence Success, White Paper, Computer World Custom Publishing, viewed 30 December 2009,
http://www.computerworld.com/computerworld/records/images/pdf/BusIntellWPonline.pdf

Burns, M: 2005 Business Intelligence Survey, CA Magazine, vol.138, no. 5, p.18, Toronto viewed 30 December 2009,
http://proquest.umi.com.ezproxy.cqu.edu.au/pqdweb?index=7&did=865601201&SrchMode=1&sid=2&Fmt=4&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1262132642&clientId=20863

van Dyk, L & Conradie, P 2007, Creating Business Intelligence from Course Management Systems, Campus-Wide Information Systems, vol.24, no.2, pp.120-133, Emerald Group Publishing Limitedviewed 30 December 2009,
http://www.emeraldinsight.com.ezproxy.cqu.edu.au/Insight/viewPDF.jsp?contentType=Article&Filename=html/Output/Published/EmeraldFullTextArticle/Pdf/1650240204.pdf

Wikipedia 2009, Business Intelligence, viewed 30 December 2009,
http://en.wikipedia.org/wiki/Business_intelligence

Wikipedia 2009, SAP NetWeaver Business Intelligence, viewed 30 December 2009,
http://en.wikipedia.org/wiki/SAP_NetWeaver_Business_Intelligence

Week 9

Q3. What external factors (non-implementation project related) could affect how and when an ERP goes live? Explain and justify.

External factors affecting ERP go live may be as follows:

• Contractual project managers and technical staff are not funded by the company to assist and support key users after implementation. Failure happens when systems are not used the way that they are intended (i.e. a system is as good as the user that inputs into it and adversely is caused by limited user training) and the risks relating to managing information does not fall solely on IT Managers.

• Technical staff should be available for any systems program errors, business process issues and user support. Top management and business owners should take responsibility to ensure adequate training is given in the ERP post implementation phase to fully achieve benefits;

• Lack of funding to support the above and project costs already exceeded budget will impact on the success of the project;

• Unexpected poor system performance causes user frustration and resistance to the new system and processes and delays meeting consumer demand;

• Risks’ relating to financial, political, manmade and natural disasters (i.e. bankruptcy, labour disputes, fire, flood, bomb, earthquake and tsunami) without management and business continuity plans in place, the effect and likelihood may be catastrophic;

• Not meeting Legal and Regulatory compliances (i.e. top management must ensure staff, policies, standards, procedures and systems structure are compliant with legal and regulatory requirements and industry best practice). Strategies should be in place to conduct compliance audits and policy health checks of the business to mitigate corporate risk;

• Poor communication between the functional areas.

Have a look at assignment five (5). Search the web or go to some other source to find some hints and tips on giving presentations. Post to your blog what you think was the most helpful and why.

Having a working knowledge with Microsoft PowerPoint and in addition to the notes supplied in COIT12073 course profile (page 20-21), below are other useful hints and tips to aid in giving a successful presentation:

• Dress for the occasion appropriate to the type of audience
• Start with a quotation to get audience attention
• Keep It Simple at a good pace
• Avoid jargon
• Maintain eye contact and engaging facial expressions
• Room size to fit the audience and the right ambience
• Pictures that are fitting to the topic
• A short presentation is not boring
• Write and rehearse the speech
• Supply handouts

A useful guide written by Marcus Puschel named “Small Guide to Giving Presentations” provides useful grammatical pointers and an understanding of the following principles:

• alignment;
• contrast;
• layering;
• consistency;
• visualisation; and,
• acknowledgment of co-authors.

References

Ifinedo, P 2008, Impacts of business vision, top management support, and external expertise on ERP success, Business Process Management Journal, Canada, vol.14, no.4, pp.551-568, Emerald Group Publishing Limited, viewed 29 December 2009,
http://www.emeraldinsight.com.ezproxy.cqu.edu.au/Insight/ViewContentServlet?contentType=Article&Filename=Published/EmeraldFullTextArticle/Articles/1570140407.html

Lozinsky, S 1998, Enterprise-wide software solutions: integration strategies and practices, 1st edn, Addison Wesley, Reading.

Peng, GC & Nunes, MB 2009, Identification and assessment of risks associated with ERP post-implementation in China, Journal of Enterprise Information Management, vol.22, no.5, pp.587-614, Emerald Group Publishing Limited, viewed 29 December 2009,
http://www.emeraldinsight.com.ezproxy.cqu.edu.au/Insight/viewPDF.jsp?contentType=Article&Filename=html/Output/Published/EmeraldFullTextArticle/Pdf/0880220506.pdf

Presentation Magazine 2009, Presentation Hints and Tips, viewed 29 December 2009,
http://www.presentationmagazine.com/presentationtips.htm

Puschel, M 2008, Small Guide to Giving Presentations, viewed 29 December 2009,
http://www.ece.cmu.edu/~dbrumley/courses/18732-f09/guide-presentations.pdf

Sumner, M 2005, Enterprise Resource Planning, 1st edn, Upper Saddle River, New Jersey.

Week 8

Q1. Many people argue that MRP is a precursor to ERP, and ERP systems were designed to integrate MRP systems with financial and accounting systems.

Materials Requirement Planning (MRP) was developed around the 1960’s by Joseph Orlicky and was enhanced to become known as Manufacturing Resource Planning (MRP 11) by Oliver Wight around 1975 and from there emerged the Enterprise Resource Planning (ERP) and (ERP 11), a computer technology method used to link various business functions such as accounting, human resources and inventory control across the entire organisation. The Y2K problem and internet interfaces motivated various companies to adopt an ERP system and are still continuing to learn and strive to achieve full system capabilities to harvest benefits of integrating their systems and processes.

a) Given the interrelationship between MRP and ERP, does it make sense for a non-manufacturing company to adopt an ERP system?

Considering that all businesses have common core functions (i.e. financial, cost and managerial accounting, human resources, sales, quality management and customer services), it would make little difference whether or not the organisation is a manufacturing type, therefore it would make sense for a non-manufacturing company to consider adopting an ERP system. Any company may benefit from implementing a successful ERP system through having centralised integration capability (instead of data entered at multiple stages), re-engineering their activities, improving accounting and management practices and in turn, lower their operating costs and the ability to provide efficient and effective customer relationships and services.

b) Have manufacturing systems been the basis for all ERP systems?

Manufacturing systems have not been the primary focus of Enterprise Resource Planning (ERP) systems. The ERP initial focus was to implement and integrate internal applications that support finance, accounting, manufacturing, procurement and human resources and the internet has now revolutionised supply chain way of thinking. Manufacturing systems lacked flexibility for changing customer needs and integration capabilities such as production planning, sales, procurement and accounting whereas ERP manages supply chain processes and provides operational efficiency through data integration to meet customer needs and expectations.

Q3. The Production Planning and Materials Management modules within ERP have interfaces to other modules, including Human Resources, Sales and Distribution, and Financial Accounting. Describe these interfaces and what information is shared with Production Planning and Materials Management.

According to Sumner (2005), The Production Planning and Manufacturing modules support Materials Requirement Planning (MRP), inventory management, capacity planning and shop floor control. The Materials Management module supports functions for procurement and inventory such as purchasing, inventory management and reorder point processing. The finance, marketing, human resources management and other functions are integrated to access the data requirements with the concept eliminating paperwork and bottlenecks associated with non-integrated data.

Human Resources

The Human Resources module supports the planning and control of personnel activities and stores secured and unsecured data relating to current and terminated individual employees. The module additionally provides capacity planning estimates of human resources required to meet master production plans and needs. Manufacturing Execution Systems (MES) support many functions including labour management to provide feedback on a real time basis from the factory floor.

The Human Resources module interfaces with the accounting module components (i.e. Management Accounting) sharing information with Production Planning and Materials Management. For example, the Human Resources payroll component interfaces employee costs to the Accounting module component, mapping individual cost centres relating to labour costs (i.e. time, attendance, hours). Other internal and external interfaces/ mappings include leave provisions, taxation, compensation, reimbursements, pay deductions, superannuation, fringe benefits and payroll bank transfers.

Sales and Distribution

Sales and Distribution is a subsystem that assists with sales tasks and activities, delivery and billing and is a subsystem that integrates with the ERP Materials Management module. The subsystem interfaces to the Financial Accounting module, accounts receivable – cost of goods sold, when a purchase requisition is created and assigned to a sales order, provided that the sales and operations subsystem that supports Production Planning produces the right information to determine if production supply can meet consumer demand.

The Sales and Operations Plan determines manufacturing resources required to support the forecast input into the Demand Management module for Production Planning that links the forecast to the Master Production Schedule (MPS), Material Requirement Planning (MRP) that uses inputs from the MPS, Manufacturing Execution that creates production from planned orders and Order Settlement confirmation. Each production planning module has important inputs for next module to produce sales orders.

Financial Accounting

Financial Accounting is a component of the ERP Accounting module that is typically designed for automated management and reporting. Financial Accounting manages labour, purchase orders to acquire raw materials and direct manufacturing costs from production planning and materials management, sharing common vendor data with purchasing. Invoices are integrated from Sales and Distribution events to Accounts Receivable costs of goods sold. Data entry relating to the sales production and payments journal entries reflect a real live journal posting of the situation to produce external reporting of the following:

• General Ledger
• Cash Management
• Accounts Receivable
• Accounts Payable
• Fixed Assets
• Other sub-ledger accounts

References:

Lozinsky, S 1998, Enterprise-wide software solutions: integration strategies and practices, 1st edn, Addison Wesley, Reading.

Davenport, TH & Brooks, JD 2004, Enterprise Systems and the Supply Chain, Journal of Enterprise Information Management, vol.17, no.1, pp.8-19, viewed 27 December 2009,
http://www.emeraldinsight.com.ezproxy.cqu.edu.au/Insight/viewPDF.jsp?contentType=Article&Filename=html/Output/Published/EmeraldFullTextArticle/Pdf/0880170101.pdf

Sumner, M 2005, Enterprise resource planning, 1st edn, Pearson Prentice Hall, Saddle River.

Spathis, C &Constantinides, S 2003, The usefulness of ERP Systems for effective management, Industrial Management & Data Systems Journal, vol.103, no.9, pp.677-685, viewed 27 December 2009,
http://www.emeraldinsight.com.ezproxy.cqu.edu.au/Insight/viewPDF.jsp?contentType=Article&Filename=html/Output/Published/EmeraldFullTextArticle/Pdf/0291030904.pdf

Week 7

Q.3 Imagine that in the ERP implementation you are involved with, users that are reluctant to get involved with phase 2. What issues, problems and risks, both short and long term, does this present?

If there are doubts about moving a project to Phase two (2) because Phase one (1) has a problem, risks are high and it may be because the project consultants lack enough experience to draw necessary conclusions. Uncertainty may cause delays, reworking, user frustration, underutilisation of the chosen package and potentially package rejection.

Phase 2 puts ideas and theory into practice and is about doing the necessary activities to get the ERP system from acceptance into production. If all is transitioning smoothly from Phase 1 to Phase 2, the project team deploys the software, re-engineers the business processes and ideally involves the key users to participate. The users are involved to watch the way the system processes the data step-by-step and how the new work tools will deal with their daily activities in order to help them gain an understanding and their acceptance for implementing changes.

The short term issues, problems and risks:

There are risks if the employees are not prepared and trained and consequently users are reluctant to get involved with phase 2. The user expectations of the system may not be what expected, for example, how the system deals with the information and their current procedures not fitting to the new information flow and this may likely cause dissatisfaction. There are other considerations, issues and obstacles some of which are typical to the modeling and simulation process as follows:

• there will not be adequate procedures,
  
• the system has a new way of dealing with the data opposed to the previous,
  
• the expected information may not exist,
  
• not enough budget to cover training costs,
  
• not enough staff in the project team for various simultaneous activities when implementing the system,
  
• access, security and control and business continuity
  
• increased manual labour is necessary; and,
  
• other aspects may not be addressed by the package for the business resulting in potential customisation of the product which is undesirable, however may be necessary.
  

The long term issues, problems and risks:

As an outcome of the short term, the long term effect may be that users are not engaged in the ERP implementation because they do not perceive the system to accommodate their current business processes and eventually become dissatisfied, causing resistance to using the new system. This type of organisational behaviour is considered high risk, because they may reject the system and the project will fail as a consequence.

It is critical for the success of the project to educate users about change and as it happens.

Following on from the previous two weeks provide a rough draft of your introduction and your executive summary. Dot points are fine.

The executive summary will be brief one-two page summary that notes Cisco’s mission and the fundamentals to achieve the mission. It will cover the main issues discussed in the body of the report as well as the conclusions reached.

EXECUTIVE SUMMARY
Cisco Systems vision is to change the way people work, live, play and learn and the latest mission is to ……

In the past, Cisco had adopted an ERP …..

Since 1994, Cisco has upgraded its ERP purchasing module relating to the move from Oracle 10.7 to Oracle 11i software. The scope of the project ……

It is now 2009, 16 years later and the company ……

The effective way of achieving Cisco’s goal is to transition the business towards ……

The options investigated have been considered

• 1.Do nothing
  
• 2.Remain with the current ERP, legacy and other systems
  
• 3.Implement and integrate Best of Breed (BoB) systems for each core functional area,
  
• 4.Implement an ERP hybrid solution combining an ERP solution with BoB solutions for specific functions implemented as modules independently,
  
• 5.Implement a new vanilla ERP solution, taking into account the learnings from the last ERP implementation.
  

The option ?, ERP solution aligns with strategic priorities and provides a foundation for the delivery of others and attracts a number of key drivers for the business as follows:

• Efficiencies gains through best practice business processes
  
• Ability to share common business processes and maintain information
  
• Quality and timely information from a single point of truth
  
• Total quality management through a Customer Relationship Management (CRM) solution
  
• Mitigation of risks relating to the current state of the organisation (i.e. supporting hardware, maintenance)
  
• Reduction in IT and IS costs through system validation and process efficiencies
  

The new ERP 11 solution will service Cisco Systems for xx years

The costs associated with options 1-5 presented in the case study are:

• Option 1 $ etc
  

If the Net Present Value (NPV) is positive, the investment will return a better than market investment rate. The comparison of costs and NPV is calculated using a discounting rate of x.x% for options 1-5 presented in the following table.
Option 1-5
Do Nothing, Upgrade existing systems, Best of Breed Solution, Hybrid ERP best of breed solution, Integrated ERP solution

Procure and Implement a new Solution

• Costs
  
• Benefits
  
• Net Value
  
• NPV
  
• Rank
  

Table 1: Comparison of Costs and NPV

The recommended option in the case study is to proceed with the implementation of option ?:

• Technology costs $xx.mil
  
• Resource Costs (includes contractors) $xxMil
  
• Solution provider implementation costs of $xxMil
  
• Continguincy $xxMil
  
• Operational costs $xxMil
  

Recurrent costs as a result of implementation is approx $xxMil per annum commencing YYYY/YY

• One of and ongoing benefits $xxMil per annum commencing one (1) year after implementation consist of the following:
  
• Efficiency gains of $xx per annum
  
• Bankable Savings of $xxxx per annum prior to an in the year of implementation
  
• Avoided costs of $xx per annum
  
• Cumulated discounted benefits delivered by YYYY are estimated around $xxMil.
  

The NPV for the recommended option ? is $xxMil with an internal rate of teturn (IRR) of approximately xx%. The return on investment (ROI) will be reached by the YYYY/YY financial year.

INTRODUCTION
Cisco’s mission is to …….

The CEO of Cisco Systems, John Chambers has ….

Research shows that global competition is forcing manufacturing and service organisations to use technology to improve information flow, etc….

The ERP systems market is fast growing in the software industry and it is a large and complex system that warrants …

The intended new ERP 11 will be ……

Information, Communication and Technology Strategy and Enterprise Architecture

Cisco Systems initial Information Technology strategy was as follows:

• Let division take care of themselves.
  
• Overall architecture is shared, enabling sharing of data.
  
• UNIX-based software package to support its core transaction processing
  

The ICT strategy opportunities needed to support the business goals of Cisco are as follows:

• Efficient business operation
  
• Improving financial sustainability of Cisco Systems services through improving the ICT environment
  
• Reducing and maintaining future ICT risk within tolerances
  

Background to the ERP Program
Cisco was founded in 1984 in California by a group of computer scientists from Stanford University, publically traded in 1990, the primary product was a router and the company ranked number 5 in the world for return on revenues by 1997. ….

Cisco Systems provides internet business solutions and assists customers with productivity improvements. ….

Cisco contributes a key element in the underlying infrastructure of the internet, ……

AIM/ PURPOSE
The purpose of this report is to …… for expansion into the server industry. The report will provide ……

REFERENCES

Avery, S 2009, Cisco invades partners’ turf, The Globe and Mail, viewed 13 December 2009, http://www.theglobeandmail.com/news/technology/cisco-invades-partners-turf/article1378000/

Beheshti, HM 2006, What managers should know about ERP/ERP II, Management Research News, College of Business and Economics, vol.29, no.4, pp.184-193, Emerald Group Publishing Limited, viewed 13 December 2009,
http://www.emeraldinsight.com.ezproxy.cqu.edu.au/Insight/viewPDF.jsp?contentType=Article&Filename=html/Output/Published/EmeraldFullTextArticle/Pdf/0210290403.pdf

Cisco Systems, Inc 2007, How Cisco IT Systematically Upgrades the Network to Support Future Technologies, viewed 10 December 2009,
http://www.cisco.com/web/about/ciscoitatwork/downloads/ciscoitatwork/pdf/Cisco_IT_Case_Study_FleetManagement.pdf

Huang, S-M, Chang,I-C, Li, S-H Lin,M-T 2004, Assessing risk in ERP projects: identify and prioritize the factors, Industrial Management & Data Systems,vol.104,no.8,pp,681-688, Emerald, viewed 13 December 2009,
http://www.emeraldinsight.com.ezproxy.cqu.edu.au/Insight/viewPDF.jsp?contentType=Article&Filename=html/Output/Published/EmeraldFullTextArticle/Pdf/0291040807.pdf

Lozinsky, S 1998, Enterprise-wide software solutions: integration strategies and practices, 1st edn, Addison Wesley, Reading.

Møller, C 2005, ERP II: a conceptual framework for next-generation enterprise systems?, Journal of Enterprise Information Management, vol.18,no.4, pp. 483-497, viewed 13 December 2009, http://www.emeraldinsight.com.ezproxy.cqu.edu.au/Insight/viewPDF.jsp?contentType=Article&Filename=html/Output/Published/EmeraldFullTextArticle/Pdf/0880180406.pdf

Selvaraj, N 2009, Cisco Reveals Makeover Plans, As Network Spending Recovers, Gridstone Research, CA, viewed 13 December 2009,
http://seekingalpha.com/article/171925-cisco-reveals-makeover-plans-as-network-spending-recovers

Sumner, M 2005, Enterprise Resource Planning, 1st edn, Upper Saddle River, New Jersey.

Vathanophas, V 2007, Business process approach towards an inter-organizational enterprise system, Business Process Management Journal, vol.13, no.3, pp. 433-450, Emerald, CQU, viewed 13 December 2009,
http://www.emeraldinsight.com.ezproxy.cqu.edu.au/Insight/viewPDF.jsp?contentType=Article&Filename=html/Output/Published/EmeraldFullTextArticle/Pdf/1570130307.pdf

Week 6

Q.3 Can an informed ERP adoption and selection decision be made without fully understanding the problem? Why or why not – justify your answer.

The answer to this question is no, because it would be difficult to make a selection and adoption decision without having a fundamental understanding of the state of the organisation, the change management impact, acceptance and the macro environment.

ERP selection decisions are difficult to make without consideration of financial position, size, structure, critical success factors, experienced human resources and assessing market competition. Depending on the scope and complexity of the business processes, the project manager should explore the system’s software functions in order to maximise the selection of the software that was chosen by the contractual company (Lozinsky 1998).

Top management need to identify if there really is a problem and a need for change and if so, they need to effectively communicate any forthcoming change to all involved. Without careful planning, modeling, learning and understanding the fundamental business processes, systems and legacy systems and functions within the organisation, it may be difficult to best match the current business with the ERP best practice vendor to best fit the organisation. Systems problems are not always detected immediately and corrected, however problems are more likely to be identified if the business processes are understood.

Re-engineering the business process is important for implementing an ERP but there is no guarantee of success because research shows that an ERP system is a high risk project for any organisation. Forward planning and a current work plan will assist in meeting milestones for the life of the project, but everyone needs to be enthusiastic and committed to make the chances of future successes higher.

Even the best of the decision makers available must be careful in selecting an ERP, because the same one system does not fit all markets in the world. The involvement in implementing an ERP should not be underestimated and there must be no misunderstanding of what steps need to be taken. Plan first, not later only to find problems requiring customisation will cost the organisation time and money.

Following on from the previous week provide a rough skeleton of what you are going to put in your conclusions and recommendations.

CONCLUSION

Cisco is a financially stable company that is capable of expansion risks. The research indicates that technology markets are continuing to innovate and the global affects will force growth in order to survive. Cisco’s executives will need to unify and work towards the vision in order to grow and stay afloat in rigid economic times. This also means that Cisco will need internal robust and efficient information technology systems to provide effective and efficient internal and external customer service.

The successful ERP implementation may provide many benefits……..

• a foundation for improved business processes and consolidate Cisco’s information services that enhance internal and external flow;
  
• cost reductions of future efficiency initiatives through a restructured and consolidated environment;
  
• a single source of truth;
  
• organisational behaviour;
  

Cisco’s shift to the server market will require the training and development of internal human resources and other resources that are capable of innovating products that are differentiated, rare, valuable, non-substitutable and costly to imitate. The company will need to develop best-cost provider strategies for their quality products to keep abreast with global change in order to leverage competitive advantages that achieve long term sustainable above average returns.

Cisco Systems has been successful after the implementation of its first ERP system with noted improvements in customer service, sales productivity, financial management and partnerships, but the risks of implementing ERP II must not be underestimated.

RECOMMENDATIONS

That Cisco Systems select and adopt an ERP system subject to the following,

• a) A value proposition and risk analysis is undertaken for a big picture view of the current state of the organisation to measure against re-engineering the current or re-engineering to a new ERP solution. Cisco’s current ERP technology is around fourteen (14) years old and may be at the end of its useful life. It may incur increased ongoing information technology maintenance and upgrade costs if the “do nothing” option is taken;

• b) An evaluation be undertaken to assess that a new standard ERP system cost compares favourably against Best of Breed systems and/ or reengineering the current Cisco ERP system;

• c) Expansion into the server market is proved a viable option and consideration given for the benefits, the competition and market stability;

• d) Key stakeholders including a change manager be identified and involved in all the above.
  

The following to be further investigated,

• Research strategies are developed (i.e. employee’s idea of the company vision, change, cultural issues);
  
• Emergent strategies are developed (move quick for rapid change)
  Research and development (drivers for change);
  
• The outsourcing cost viability be conducted for vertical integration options (review vertical integration options for economies of scale). Cisco does not own all products in the value chain. Investigate the feasibility of acquisitioning a fully integrated service company to strengthen competitive position;
  
• an analysis of viability and continued sustainability be examined;
  
• a confrontational marketing and advertising strategy be developed with a view to maximize customers to maintain competitive edge over rivals;
  
• Best-cost strategies be developed for quality at the best price and tatics to maximise customers;
  
• an ERP Information Systems (IS) auditor is appointed that has technical expertise to efficiently utilise the ERP functions in an audit engagement. The IS auditor is to play an active role in the emerging audit process change at the implementation phase to ensure controls are not compromised during the early phase and risk controlled after the implementation phase;
  
• Competitive strategic decisions, securing and sustaining competitive advantage
  
• Strategies using partnerships
  
• Implementation and action plan for Cisco
  
• Establishing standards and reinforcing Cisco’s quality control system
  
• Evaluating and modifying Cisco’s current strategies
  
• Human resource functions
  

REFERENCES

Avery, S 2009, Cisco invades partners’ turf, The Globe and Mail, viewed 13 December 2009, http://www.theglobeandmail.com/news/technology/cisco-invades-partners-turf/article1378000/

Beheshti, HM 2006, What managers should know about ERP/ERP II, Management Research News, College of Business and Economics, vol.29, no.4, pp.184-193, Emerald Group Publishing Limited, viewed 13 December 2009,
http://www.emeraldinsight.com.ezproxy.cqu.edu.au/Insight/viewPDF.jsp?contentType=Article&Filename=html/Output/Published/EmeraldFullTextArticle/Pdf/0210290403.pdf

Cisco Systems, Inc 2007, How Cisco IT Systematically Upgrades the Network to Support Future Technologies, viewed 10 December 2009,
http://www.cisco.com/web/about/ciscoitatwork/downloads/ciscoitatwork/pdf/Cisco_IT_Case_Study_FleetManagement.pdf

Donovan, M 2001, “Successful ERP Implementation the First Time“, Performance Improvement, viewed 12 December 2009, http://idii.com/wp/donovan_erp_success.pdf

ERP Implementation 2007, Cisco ERP Implementation, viewed 13 December 2009, http://www.implement-erp.com/cisco-erp-implementation.html

Huang, S-M, Chang,I-C, Li, S-H Lin,M-T 2004, Assessing risk in ERP projects: identify and prioritize the factors, Industrial Management & Data Systems,vol.104,no.8,pp,681-688, Emerald, viewed 13 December 2009,
http://www.emeraldinsight.com.ezproxy.cqu.edu.au/Insight/viewPDF.jsp?contentType=Article&Filename=html/Output/Published/EmeraldFullTextArticle/Pdf/0291040807.pdf

Lozinsky, S 1998, Enterprise-wide software solutions: integration strategies and practices, 1st edn, Addison Wesley, Reading.

Markus, ML & Tanis, C 2006, The Enterprise System Experience—From Adoption to Success, Free University of Bozen, viewed 10 December 2009, http://pro.unibz.it/staff/ascime/documents/ERP%20paper.pdf

Møller, C 2005, ERP II: a conceptual framework for next-generation enterprise systems?, Journal of Enterprise Information Management, vol.18,no.4, pp. 483-497, viewed 13 December 2009, http://www.emeraldinsight.com.ezproxy.cqu.edu.au/Insight/viewPDF.jsp?contentType=Article&Filename=html/Output/Published/EmeraldFullTextArticle/Pdf/0880180406.pdf

Selvaraj, N 2009, Cisco Reveals Makeover Plans, As Network Spending Recovers, Gridstone Research, CA, viewed 13 December 2009,
http://seekingalpha.com/article/171925-cisco-reveals-makeover-plans-as-network-spending-recovers

Sumner, M 2005, Enterprise Resource Planning, 1st edn, Upper Saddle River, New Jersey.

Vathanophas, V 2007, Business process approach towards an inter-organizational enterprise system, Business Process Management Journal, vol.13, no.3, pp. 433-450, Emerald, CQU, viewed 13 December 2009,
http://www.emeraldinsight.com.ezproxy.cqu.edu.au/Insight/viewPDF.jsp?contentType=Article&Filename=html/Output/Published/EmeraldFullTextArticle/Pdf/1570130307.pdf

Week 5

Q.2 Provide examples of events that you think may trigger alterations in a work plan. What would the consequences of such events be?

According to Sumner (2005 p.114) there are many events that may trigger alterations and consequences in a work plan. Work plans may be termed as various detailed activities that are defined to deliver a project/ program of work. The work plan has allocated resources, timelines and milestones and is typically developed around the project size, scope, resources and budget and considers technological, organisational and people risks. Time is money and changes in scope, budget and project manager/s are likely to trigger alterations to a work plan. Listed as follows, is a mixture of technological, social and organisational theories that may potentially alter a work plan.

• Resources without capabilities that match the nature of the work may cause over expenditure which causes inefficiencies to deliver on time and estimated budget in accords with the work plan.
• Skilled resources that are scarce or unavailable due to other assigned or priority activities may cause continuity setbacks in alignment with the milestones of a work plan.
• The project manager fails to track, follow up and communicate to each responsible person/ position their deliverable in the work plan. The consequence in not doing will delay the project or may even result in project failure.
• If the project is not scoped out by the right stakeholders at the business case or project management plan stage, (e.g. an information technology project with business definitions gaps), subsequently the work plan to implement the system may not be successful at post implementation and consequently not deliver on the business planned benefits.
• User Acceptance Testing (UAT) plan gaps, poor interpersonal skills or un-encountered issues may cause timeline delays for systems go live due date in accords with the work plan.
• Unexpected volatile systems performance may cause timing delays and lack of qualitative benefits.
• Software bugs may cause incorrect output or even project failure.
• Work plans that do not include top management and steering committee member’s commitment for monitoring scope changes and/ or concerning issues or causes may prevent the project from finishing as scheduled.
• Each phase or stage of a project’s expenditure may exceed budgeted costs that trigger a review of scope, methodologies, resources and time needed to get the project on back on track.
• ERP software installed in modules may experience time delays with implementing the business processes if the employees have not received sufficient training of the software and consequently overlap work deliverables.
• Technology issues such as poor project specifications, for example, changes to systems code in one business area may put another business areas at risk if the flow-on of interfaces are unknown by the systems developer. (i.e. changing a vanilla ERP package to suit the organisation, legacy systems may cause future upgrades complexity).
• Equipment needed, at the last minute is found to only be available off shore (e.g. a data centre suppliers not available in Australia to host Customer Relationship Management (CRM) software) and consequently may cause time delays due to privacy laws, standards, policies and funding, resources and risks that need to be further analysed and considered by the steering committee and top management.
• Social issues such as poor leadership, people management, communication and relationships with stakeholders/ users have consequences that will cost the organisation time. The costs will eventually exceed budget and the risk of failure becomes more than likely.
• Too many frameworks and inconsistent methodologies that are followed as part of achieving the milestones in a workplan cause confusion and are time wasters. For example an organisation may have too many frameworks to understand and follow, that perhaps should be business processes following one (1) overarching framework using generic methodologies that follow applicable quality standards and align to strategic priorities. There may be different business areas of the organisation that have different variations of templates collecting the same information and the designs are unfamiliar to each other.

References

Lozinsky, S 1998, Enterprise-wide software solutions: integration strategies and practices, 1st edn, Addison Wesley, Reading.

Sumner, M 2005, Enterprise Resource Planning, 1st edn, Upper Saddle River, New Jersey.

Have a look at assignment 3. The purpose of this assignment is to provide a case study report. Provide a rough skeleton (dot point form if you wish) of what you are going to put in the main body of your report. You should make clear what the problem is and also outline what the options are.

• 3.1 Need for Change.


• 3.1.1 Business Capability.


• 3.1.2 Server Market Provision.


• 3.1.3 Information Needs, Strategic Resource Planning Requirements.


• 3.1.4 ICT Capability.
• 3.2 Desired Outcomes.


• 3.2.1 Goal
  The best organisation in the world.
  Operational Readiness


• 3.2.2 Enterprise Resource Planning
  Definition of an ERP is….


• 3.2.3 Vision.

The network as the platform for life’s experiences

• 3.2.4 Innovative Business Capability
  Foundation for improved business processes, efficiency gains…


• 3.2.5 Innovative Information Capability

Planning imperatives and real time relevant information for decision makers.

DISCUSSION
Motivation and driver for change
Aims to supports conclusion and recommendations.

• 4.1 Options and Scope
  
• 4.1.1 Options Analysis
  
• 4.1.1.1 Do nothing
  Remain with the current ERP, legacy and other systems
  
• 4.1.1.2 Evaluation of the existing ERP
  
• 4.1.1.3 Upgrade existing core systems
  Best of Breed system
  
• 4.1.1.4 Implement an ERP solution
  A new ERP system, taking into account the learnings from the last ERP implementation
  
• 4.1.1.5 Cost comparison options
  
• 4.1.1.6 Re-engineering verses Customisation
  Develop an ERP system to suit the business needs

• 4.2 Proposed Scope
  
• 4.2.1 In Scope
  
• 4.2.1.1 Project and change management
  
• 4.2.1.2 Initiation activities
  
• 4.2.1.3 Procurement activities
  
• 4.2.1.4 Implementation initiatives

• 4.2.2 Out of Scope

• 4.3 Strategic Alignment
  
• 4.3.1 Strategic Priorities
  
• 4.3.2 Alignment of the businesses to Cisco’s Company Plan

• 4.4 Information, Communication, Technology (ICT) Alignment and Impact
  
• 4.4.1 Resource and Cost Estimates
  Consultants
  
• 4.4.2 Technology Details
  
• 4.4.3 Strategic Alignment
  
• 4.4.4 ICT Portfolio Management Committee
  
• 4.4.5 Re-engineering

• 4.5 Capacity
  
• 4.5.1 Business Area Impacts
  
• 4.5.2 Links and Interdependencies
  
• 4.5.3 Capability

• 4.6 Value Profile
  
• 4.6.1 Background to Benefits Realisation Plan & List of Benefits
  
• 4.6.2 Maximising return on investments (ROI)
  
• 4.6.3 Strategies for the realisation of benefits
  
• 4.6.4 Performance Measures & Expected Outcomes
  
• 4.6.5 Risks and Issues
  Business continutiy
  Contingency
  Security
  Controls
  
• 4.6.6 Cost Estimate
  
• 4.6.6.1 Estimated Project Costs and Benefits
  
• 4.6.6.2 Cost Assumptions
  Ongoing annual costs

• 4.7 Critical Factors
  
• 4.7.1 ERP Successes
  
• 4.7.2 ERP Failures
  
• 4.7.3 Current Trends
  
• 4.7.3 Lessons Learned

• 4.8 The Macro Environment
  
• 4.8.1 Cultural
  
• 4.8.2 Political
  
• 4.8.3 Economic
  
• 4.8.4 Technological
  
• 4.8.5 Challenges & Outcomes
  

COMPANY PLAN

POLICIES
Identify relevant policies

BUDGET/FUNDING
Available budget allocation

COMPLIANCE

PARTNERSHIP OPPORTUNITIES

TIMING
Customisation

STAKEHOLDER IMPACTS

MANAGEMENT SUPPORT

Cisco Systems Inc. 2009, Cisco 2009 Annual Report, Cisco Systems, viewed 4 December 2009,
http://www.cisco.com/web/about/ac49/ac20/about_cisco_annual_reports.html

Week 4

Q.2 Read the Sumner (2005) case study on pages 52 – 56. Address the following questions: b. What advantages would an ERP provide to Wingate Electric? What other options does Wingate Electric have instead of adopting an ERP?

Wingate Electric is a mid-sized company using a home grown system and their back office systems are in disarray Sumner (2005). It is the writer’s opinion that they cannot afford to keep using a Band-Aid approach for upgrading their systems to compete with new technology in an ever changing global market.

The company’s top management is not all in favour of adopting an ERP system and without synergy for the vision, there may be risks. As part of the implementation strategy, there will need to be a risk assessment and analysis conducted. Once all agree and it is financially viable, then a radical decision needs to be made to adopt an ERP system, because other competitor’s have implemented their ERP system and are already gaining a competitive edge against Wingate (Sumner, 2005).

The advantages that Wingate Electrics would gain through successful ERP implementation of the accounting and financial modules are:

• Centralisation and integration
  (i.e. accounts payable, receivable and General Ledger & financial functions integrate, data updates, data sharing, reduced data redundancy, improved data integrity, consistency, security customised to the user level of responsibility);


• Automated business processes with best practices (i.e. discarded inapplicable business processes);


• Time & Inventory cost reductions (i.e. less excess inventory);


• IT cost reductions;


• Personnel cost reductions (i.e. cross-functional access to the same data for planning & control);


• Increased profitability;


• Productivity improvements (i.e reduced processing time, customer service, financial management);


• Cash management improvements;


• Web-based application (i.e. order processing and order tracking capabilities, front end to integrated systems);


• Performance improvement (i.e. faster access & transactions using common data);

Competitive advantages of similar companies to Wingate Electrics who have successfully implemented an ERP system may already have or are achieving:

• Customer satisfaction (i.e. efficiency gains, avoided costs);


• Timeline efficiencies (i.e. service & product delivery);


• Web-based applications (i.e. e-business, ordering, data storage, customer relations);


• Low maintenance through integration and automation and inventory levels;


• Reporting efficiencies;


• Flexibility and Standards;


• Integrity of the data;


• Uniform maintenance (i.e. one change affects multiple systems);


• Reduced direct operating costs & decreased financial close cycle;
  

Windgate’s other implementation systems options may be:

• Best of Breed (BoB) system from several ERP packages;


• Totally in-house developed;


• In-house plus specialised packages;


• Single ERP package;


• Single ERP package with other systems;


• Multiple ERP packages with other systems;


• Customise the ERP software package to suit Wingate’s business processes;


• Develop and train internal employees to have information management and technology capabilities to upgrade and support the systems;


• Employ contractors to do the work;


• Keep using the Band-Aid approach on legacy and other systems.
  

The strategic direction of ERP big bang, mini big bang or phased by module are debatable options for Wingate and further investigation into the critical success factors and benefits realised of other similar competing companies that have implemented ERP systems should be considered before fully committing to a particular vendor’s best practice models of ERP software. (Sumner, 2005)

References:

Lozinsky, S 1998, Enterprise-wide software solutions: integration strategies and practices, 1st edn, Addison Wesley, Reading.

Sumner, M 2005, Enterprise Resource Planning, 1st edn, Upper Saddle River, New Jersey.

Week 3

Q.3 If an organisation has business processes that do not match any commercially available ERP, should the organisation adopt an ERP? Provide factors for and against and suggest other possible considerations that would factor in your reasoning.

There are many varied definitions of “business processes” that each organisation adopts formally and informally and there is evidently continual global change with competition and technology in the workplace, however it is through knowing the state of the organisation whether or not there is scope or budget for change (Sumner, 2005).

Analysis, models, rules and current business process need to be clarified and documented to order to compare with ERP commercial products. Business improvements may also be identified throughout the process of conceptualising and planning the business processes to be suitably centralised with ERP vendor choice. A relational entity model of the current status will identify what and how legacy, other systems, business processes and rules if any are in place to integrate a vendor best practice ERP. After all the supporting documentation has been collated to justify the current state, the business plan along with the facts, scope, models, risks, budget, costs and benefits will inform stakeholders/ decision makers to critically analyse and discuss the situation in order to make a decision and commit to positive change or not. Without strategies, policies, models, facts and data it is unknown if the business processes may potentially match or not and if so, what are the risks of change is to match a commercially available ERP (Sumner, 2005).

Assuming that all of the above has been thoroughly investigated and documented, the organisation is now at the business case stage and the decision makers are in the position to say that its business processes do not match, but there are criticalities to consider such as the business process re-engineering risks that need to be assessed, information technology that supports the re-engineering of business processes, training employees with new behaviours, outcome measures and the benefits for and against a clean slate approach (Sumner, 2005, p.31) ERP. Using a clean slate approach may potentially simplify business processes, improve business rules, user interfaces and productivity, increase efficiency to reduce costs and attain best practice, but the concerns are that the chosen ERP vendor may not turn out to be a vendor that has best practices that are suited to the current business and budget (Sumner, 2005).

To enable success through radical change, the communication channels are critical to the success of implementing ERP and the employees need exceptional interpersonal skills and adequate training, else there may be failure for the organisation and all the employees in it. Everyone in the organisation must be willing to commit to the project management plan and change that follows as it may potentially be a crisis area at the implementation stage if not addressed by the organisation early. Selective commitment may have adverse result such as conjuring up employee union movement. (i.e. fear of employee positions made redundant), however if handled appropriately, one of the benefits out of successful ERP implementation is the efficiency gains made through system integration and consequently a cost reduction of human resources for the organisation (Sumner, 2005).

The benefits of adopting an ERP is that the databases are integrated, it provides data sharing, independence, improved data consistency and integrity and reduced redundant data. All these improvements combined may offer competitive strategic advantages, efficiency gains and returns through re-engineering of the business processes (Sumner, 2005).

Each business has functions that of which some may match ERP commercial alternatives, however each off the shelf package comes with risks. Nominally there are organisations that lack synergy of the vision across the organisation and there are organisations that do not have best practices and there are organisations that have no strategic priorities or qualitative frameworks and methodologies. Without buy in across all areas, ERP may not achieve the benefits and as a consequence will cost the organization dearly. Dependent on the organizations status and positioning, adopting an ERP would be an opportunity to redesign for more simplified processes that are improved, aligned and integrated business processes that may have long-term potential gains that are sustainable (Sumner, 2005).

It is the writer’s thoughts after research and investigation that if the organisation is positioned well for example, it has all of the following organisational capabilities and more, the appropriate decision in this case is to become a risk taker because there is a higher risk and price to pay if left behind the times of the global forever changing technological world, changing markets and competitor strategies.

The questions of the success of an organisation transitioning to ERP are dependent whether,

• it is financially sound;
  
• it has time for lengthy projects;
  
• it has trained resources that have exceptional interpersonal skills and are adaptable to change;


• it has effective user acceptance test plans;
  
• it has targeted measurable benefit realisation plans
  
• it is prepared to train employees to sustain positive business outcomes;


• it is able to mitigate risks through re-engineering and consequently the development of new policies and strategies; and


• it has the ability to develop and test incident and business continuity plans in the event of disruption, shutdown or failure.
  

Another option is to go with ERP even if it does not fit with the current business processes or vice versa with the ERP best practices. The organisation may strive for the competitive advantages that ERP offer, however this option does not happen without high risks such as the ERP code being changed to fit into the existing practices and the danger of legacy systems being altered (Sumner, 2005).

If the organisation, no matter what its size, is not positioned well and has budget constraints, the logical choice would be to avoid high risk projects that have potential failure and perhaps look at merging with a robust similar market to keep in line with the changing times. One option may be to upgrade to current best of breed systems in the knowledge that there is now a better understanding of the business processes through the development of the business case that may inform a better off-the-shelf product choice that is more suited to each individual area of the organisation, however not centralised. Another option would be to take a risk and choose the “vanilla” enterprise system that radically re-engineers changes to the business processes. Regardless of the direction taken, it must be viable to continue until such a time that the organisation is in the position to support the required or needed organisational capabilities for future ERP’s and what is the point of changing an ERP product to suit all organisational business processes/ practices as it defeats the purpose of ERP best practice purchase. (Sumner, 2005)

Annotated References

Weston, R 1999, Model-driven, component-based approach to reconfiguring manufacturing software systems, International Journal of Operations & Production Management, Vol.19, No.8, pp. 834-855, MCB University Press, Loughborough University, Leicestershire, UK , viewed at Emerald 22 November 2009,
http://www.emeraldinsight.com.ezproxy.cqu.edu.au/Insight/viewPDF.jsp?contentType=Article&Filename=html/Output/Published/EmeraldFullTextArticle/Pdf/0240190805.pdf

In this journal article the author’s research explains three main thrusts – usage constraints, a new approach to developing manufacturing software and associated system structures and general research findings when implementing the aspects of this new approach in different ways. The article explains a number of proof-of-concept system design and construction environments that have been developed and their targets at defining and resourcing different sets of W, H and D activity flows utilised by industrial companies that work together. The article will be used to gain an understanding of the types of systems and how the components of the software systems are embedded and configured into software integration mechanisms. The concepts will give an insight to support the Cisco case study decision as to whether they should adopt a new enterprise system to accommodate rather than inhibit subsequent change for the expansion of their products and services in the market.

The Economist, 2009, Reshaping Cisco: Cisco’s chairman and chief executive is stretching his company in all directions. Can it hold together? The world according to Chambers, from The Economist print edition, viewed 22 November 2009,
http://www.economist.com/displaystory.cfm?story_id=14303574

The author in this article explains Cisco’s plan for a big push into the server market. The article talks about the products and services already in place and predictions of future internet traffic accounted for by video communication that will be twice as fast as traffic overall in an attempt to justify why Cisco should make the change. It explains that there will be bigger routers and switches needed, such as Cisco’s Nexus 7000, which can handle 15 trillion bits that is the equivalent of 1,350 feature-length films every second. More research and investigation is needed to justify and argue the truth of such information to enable an informed opinion as to whether they should proceed with another enterprise system or look into alternatives to build its business and become the best company in the world.

References:

Lozinsky, S 1998, Enterprise-wide software solutions: integration strategies and practices, 1st edn, Addison Wesley, Reading.

Sumner, M 2005, Enterprise Resource Planning, 1st edn, Upper Saddle River, New Jersey.

Week 2

Q.4 Stuff-Up.Org (fictitious organisation at the time or writing) has an ailing set of in-house developed legacy systems (if you don’t know what a legacy system is – look up the term on the web). It has been decided that the IT department will be tasked to investigate the possibility of adopting an ES. If they recommend ES adoption, then it has also been decided that they will be tasked with evaluating products and recommending a product to the CEO. What might be wrong with this situation? What problems do you see arising?

The Information Technology (IT) department would not ideally be the only team and stakeholders to investigate the possibility of adopting an enterprise system. IT specialists are not information systems (IS) specialists; however they may have an understanding of each other’s business area. The IT business area is about technology creation and artefacts such as collection, processing, storing and transmitting of data, whereas and an IS business area is about networking of technologies, data records and activities that process the data. The decision to make the IT department the only stakeholders may be a high risk with catastrophic consequences. In the planning, testing and implementation phases of the project, if for example, senior management and users are not involved, the definitions, scope and the user ability of the project may be inconsistent with the reengineered business processes. This initiative oversight may adversely cause a lack of participation and resistance by users across all other service areas of the organisation. If the enterprise system (ES) is adopted without total organisational commitment, the end users may not partake and the consequences may be an increased likelihood of project failure (Lozinsky 1998).

If the IT department were assigned the responsibility of this project, they would first begin by taking steps to engage other stakeholders with capabilities matched to the task, such and the IS department specialists to commence an evaluation of the business processes and to identify potential risks and improvements in order to map the activities that the enterprise system should meet for the whole organisation. The IT department would identify the entire internal legacy and other systems for auditing and trailing. The initial investigation is a resource hungry exercise that is necessary to progress towards selecting an enterprise system that meets the organisational business processes and standards. Other important stakeholders are top level management, end users of the system and consultants. A decision making committee with the right stakeholders is vital in communicating how the project is progressing and steering (Lozinsky 1998).

Change management is an important key area that is difficult for human resources to fathom if they are not educated as change happens. If change is not managed well, the consequences may be socio-economically devastating and when there is change, employees need to know what, why and how they will manage it and therefore they will need to be trained MCB UP Ltd (2003). Consequently, if employees are not trained in using a new system, it may not be used in the way it was intended, mistakes are made, data integrity is lost and then failure happens. Failure can cause breakdown, catastrophe or even bankruptcy (Lozinsky 1998).

There is no best fit solution for Stuff-Up.Org or any other organisation for that matter, but to have an in-depth understanding of the organisation’s business processes as a whole will gauge a better understanding to produce a better model and consequently a more aligned enterprise system that has successful outcomes (Lozinsky 1998). An organisation may also need to consider the posibility to extend the system’s functionality, for example to sell it’s products via the internet and to choose a vendor that has the capability to help build strategic extensions to the ERP system after it is rolled out Michel (1999, p.29). This is all part of the planning process to identify the needs of the business in order for the internal/ external IT department, to design the best practice enterprise architectural model for implementation, verification and maintenance, otherwise known as the Waterfall Model software development process (Wikapedia, 2009).

Recommending only one enterprise system product to the CEO is not exercising best practice and being a business owner, the CEO would likely need more than one option to compare current and proposed models, each of the risks, costs and benefits that include bankable savings before committing to any major high cost, high risk project (Lozinsky 1998).

Annotated Bibliography

Michel, R 1999, Extended ERP services, Manufacturing Systems Journal, US, Vol. 17, No.10, pp.29-35, ProQuest, viewed 15 November 2009,
http://proquest.umi.com.ezproxy.cqu.edu.au

The author researches extended ERP services and the vendors that Cisco, Herman Miller, Steelcase, and others have turned to for extended ERP solutions. The article discusses the type of information technology services and range of skills that vendors are capable of delivering for extended ERP solutions that plug into the core ERP application via an applications platform. Extended application may be customer relationship management (CRM), e-commerce, business intelligence, and supply chain management software. These vendors or firms handling ERP extension projects must have strategists that have technical integration skills and a good knowledge of the software that is being deployed. The ERP vendors are facing some major hurdles in their ability to scale as the portfolio assemblers. This article may be useful information for assessment item 3 case study report for consideration of strategically planning the system and its future functionality with competition and changing technology. Finding the right vendor with capabilities to implement an ERP and any future extensions as necessary is an important risk factor for the business if not identified in the planning. There may be difficulties finding strategists and those with technical integration skills and software knowledge now and in the future, therefore further research for other options may need to be investigated if unfounded.

MCB UP Ltd 2003, Cisco keeps learning on the agenda: Preparing for the upturn through employee development, Development and Learning in Organizations Journal, Vol 17, No.3, pp.19-22, viewed at Emerald, CQU, 15 November 2009,
http://www.emeraldinsight.com.ezproxy.cqu.edu.au

The author’s research explains Cisco’s belief in learning and how it conceded the ultimate test during the technology crash of 2001. The article looks at the options to maintain effective training programs for staff, regardless of the amount of money available to be spent on their development and perhaps more training with less money. The Cisco systems specialists helplessly watched $430 billion disappear from its valuation which may have left most other companies dead and buried given the situation, but Cisco survived and in the process demonstrated an extraordinary commitment to learning and development of its employees. This article will be used in the Cisco case study to argue the strategic importance for training and development of employees to reap the benefits of their knowledge, commitment and loyalty to the organisation and contingency through development of business continuity plans to keep it operational in the best and worst of circumstances whether it is a manual or electronic process.

References

Lozinsky, S 1998, Enterprise-wide software solutions: integration strategies and practices, 1st edn, Addison Wesley, Reading.

Ricadela, A 1999, Cisco, 3Com aim at ERP, Information Week Journal, Manhasset, US, No.746, pp.26, ProQuest, viewed 15 November 2009,
http://proquest.umi.com.ezproxy.cqu.edu.au

Sumner, M 2005, Enterprise Resource Planning, 1st edn, Upper Saddle River, New Jersey.

Wikipedia 2009, Waterfall model, viewed 15 November, 2009,
http://en.wikipedia.org/wiki/Waterfall_model

Week 1

Welcome to Carm’s ES Blog. Term 3 2009.

Q.2 ERPs are often touted as providing ‘best practice’ in functionality and business processes. However, many organisations have their own business processes and often do not want to change. If an organisation is unwilling to change its business processes, can it gain any value from an ERP? How could this be achieved? What are the risks?

According to Sumner (2005 p.2), Deloitte Consulting describes an Enterprise Resource Planning (ERP) system as a business software package that automates and integrates the majority of its business processes to produce and access information in a real-time environment for an organisation. In order for an ERP system to work through sharing common data and practices across the enterprise, changes to business processes are inevitable and any change should be managed well. According to Sumner (2005), best practices are defined by Honig (1999) as “simply the best way to perform a process” (Sumner, 2005).

Sumner (2005) states that Honig (1999) refers the “The biggest mistake made in implementing ERP, especially in a manufacturing environment, is to redesign the new system to work in an old environment”. If an organisation is not prepared for change, there may not be any value from an ERP, however an organisation may gain value from an ERP if the business owner and stakeholders can be persuaded to change through being educated on the strategic and competitive advantage and benefits that can be harvested after implementing an ERP. A cost-benefit analysis is an effective tool used to predict measureable business benefits and is valuable when based on core data, not forgetting acquisition and system implementation. By being descriptive on how savings would be achieved rather than guessing figures, it may be more influential to get other buy in for ERP change. Stakeholders may not be willing to be accountable for all benefits that are potentially realised from implementing an ERP, such as tangible benefits that reduce human resources to achieve bankable savings and if line staff in a large organisation hears of it, the cost to an organisation may be detrimental (Sumner, 2005).

An ERP system is an expensive project, incurring consultation, software, hardware, training and implementation team costs regardless of the design alternative. Further costs may be incurred such as high support and maintenance costs and benefits not being realised until the system is in operation. The business case and project management plan should account for good design models, risks, security and re-engineering of business processes using best practice. It should also have known and potential costs along with benefit realisation plans within the scope in order to critically plan the ERP with measurable and effective outcomes to harvest the benefits (Sumner, 2005).

If an organisation is unwilling to change its business process, it may gain value from an ERP if the business process is unchanged, however the benefits would be limited. There would be limited vendor support for technical issues, more human resources and costs would be necessary to maintain systems software including any customisation, external consulting, data integrity, efficiency and performance and the their would be few competitive advantages. If planned too efficiently and without industry professionals, adoption and implementation may have serious risks and consequences (Sumner, 2005).

In conclusion and in light of the above, before any value can be achieved from an ERP system, the ERP design will ideally be more than best fitting to the organisation’s existing business processes. The choice of vendors and their best practice may differ in matching the current fundamental processes with the organisations’ existing legacy and or other systems in place. ERP is a timely and costly program with projects that may impose a high risk for an organisation. Potential risks should be identified early to assess the likelihood of catastrophic consequences. Bankable, efficiency gains and avoided cost benefits should be calculated early in the plans of ERP to measure against the current systems and how risks will be mitigated to realise the benefits. (Sumner, 2005)

Q.6 In recent times, there has been a trend away from total (or vanilla) ERP implementations towards ‘best of breed’ systems. Research this trend and describe how it differs from standard ERP implementations. Contrast the approaches and describe advantages and disadvantages. What are some of the considerations that would affect the decision to use the ERP or best of breed approach?

Integrating a “vanilla” Enterprise Resource Planning (ERP) system is a high risk inflexible program of work such as the vendor software not meeting the specific needs of the organisation and industry requirements Sumner (2005). According to Sumner (2005, p.9) the advantages of a vanilla ERP is that there is complete standardisation of business processes that are based upon the vendor’s best practices, however the disadvantage is that competitors have access to the same system and operations will experience disruption over three to five years. The standard ERP system is implemented in separate modules that provide cross enterprise functionality, however customisation may be difficult becuase modules are integrated. Single vendor ERP’s may be difficult to align to the implicit business model and reengineering business processes may present difficulties. Once an organisation is locked into an ERP contract, there may be considerable costs with upgrades and support for the life of the product (Light et al. 2001).

Light et al. (2001, p.222) compares major differences between ERP and BoB systems. Considerations in using ERP opposed to BoB are that the ERP system requires a clean slate approach, it promises multiple synergies, has large scale re-engineering using high levels of technical integration and competitive advantages. ERP systems typically have less upgrade problems and reduced reliance on internal information technology resources opposed to BoB systems. There is a risk that the ERP system costs will be much higher than first predicted, however if planned and implemented successfully, there are considerable tangible and intangible long term benefits to be realised (Light et al. 2001).

The BoB system is based on the integration of standard software packages from various vendors. It may be an off the shelf boxed best of breed solution or an individual module from a notable vendor. BoB systems may offer immediate return on investement (ROI) due to the internal implementation and divided reliance for support across multiple vendors. BoB systems may achieve benefits such as increased development speed, reduce development employees and offer state-of-the-art technology capabilities through upgrades, however if software is radically changing, it may have the adverse affect, for example, system upgrades may be difficult to match within the enterprise system (ES) (Light et al. 2001).

The advantages of using a BoB system opposed to an ERP is that the BoB system is customised software that more closely supports and aligns the business processes and associated maintenance of an organisation. An ERP system is advantageous, in that it has a single vendor and a common data set and suite of integrated applications, however there is a risk of forfeiting the advantages if the source code is modified and consequently may create legacy problems (Light et al. 2001).

Considerations in using BoB opposed to ERP is that the BoB system components can be implemented as a stand-alone application, avoiding the global change dilemmas of ERP and BoB has a greater flexibility in business process redesign (Light et al. 2001).

It is vital that each system develops effective strategies that focus on the complexity of implementation, the risks, the required levels of business process alignment and maintenance and the benefits of change. (Light et al. 2001)

Annotated Bibliography

Light, B Holland, CP Wills, K 2001, ERP and best of breed: a comparative analysis, Business Process Management Journal, UK, Vol.7, No.3, pp.216-224, viewed at Emerald, CQU, 6 November 2009,
http://www.emeraldinsight.com.ezproxy.cqu.edu.au

In this article the authors explain ERP in comparison to “best of breed” systems. Their research focuses on a case study of a global entertainment company, academic and business literatures and extensive prior research of the authors Holland and Light. Further research is essential due to the criticality of enterprise systems to organisations and the limitations of what can be done. This article may be useful information for assessment item 3 case study report to research ERP, alternatives and best of breed systems suitable to the organisation. The research and implicit company model along with comparative cost-benefit analysis of each system will provide a better understanding of the enterprise system options in order to make recommendations and choose the right direction for the success of the company and its shareholders/ stakeholders.

Reference

Lozinsky, S 1998, Enterprise-wide software solutions: integration strategies and practices, 1st edn, Addison Wesley, Reading.

Sumner, M 2005, Enterprise Resource Planning, 1st edn, Upper Saddle River, New Jersey.