A short introduction to the implementation of enterprise systems.

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Johan Magnusson
Centre for Business Solutions
School of Business, Economics and Law
University of Gothenburg
Implementation
2013-08-29Centre for Business Solutions

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Agenda
After the lecture, you will be able to:
1. Describe the implementation process
2. Evaluate potential pitfalls and risks involved in the implementation
process
3. Explain the post-implementation and Second Wave phases of the
ES lifecycle
2013-08-29Centre for Business Solutions

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Implementing Enterprise Systems
• High risk projects
• 80% fail to follow set budget and time, 20-35%
are regarded as failures
• Most common problems involve:
– Lack of Executive Management Commitment
– Insufficient or Inadequate Budgeting
– Inadequate change management and training
– Extensive modifications
2013-08-29Centrum för Affärssystem
Ganly, D. 2008. Address five key factors for successful ERP implementations. Gartner Group

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Change Management
• Multiple normative frameworks (7s, Leavitts
diamant, 6 Sigma…)
• John P. Kotter
– Establish a sense of need
– Form a powerfull alliance
– Create a vision
– Communicate the vision
– Get others to act
– Plan for and create short wins
– Consolidate improvements
– Institutionalize new practice
Kotter, J.P. 1995. Leading Change: Why transformation efforts fail. Harvard Business Review, Mar-Apr.

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Business Process Reengineering
• Michael Hammer (1989)
• Don’t automate, obliterate!
• 1993: 65% of Fortune 500
• Excuse for down/rightsizing
• Severely questioned
• Contributed to an increased focus on
processes
• ”The fundamental ret-hinking and radical re-
design of business processes to achieve
dramatic improvements…”

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Introducing a new system
• Installation and implementation
• Two sides: technology and processes
• Technology can be used as a battering ram
• Large projects should be divided into smaller
ones
• Project and change programmes
• Big bang or Phased

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Case: Implementation at Hestra Inredningar AB
2013-08-29Centre for Business Solutions

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Learning points
• Consider change
• Engage the sub-process owners
• Focus on processes
• Create process maps that are living
documents
• Strive for continuous improvements
• The implementation is just the first
step
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A possible framework: ERP Scorecard
• Developed for SAP
2004
• Sold exclusively to
SAP 2004/2005
• Targeted for SME
Magnusson, J. ; Nilsson, A. ; Carlsson, F. (2004). A conceptual framework for forecasting ERP implementation success : a first
step towards the creation of an implementation support tool. International Conference on Enterprise Information Systems.
Management
Strategy
Leadership
Support
Competence
Project
Team
Management
Plan
External
Organization
Culture
Change
Process
Communication
System
Technology
Education
Users
Empowerment

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The investment
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Do we let go too soon?

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Post-Implementation
• Why would you actually want to
change your system?
• Added value through cosmetics, 3rd
party suppliers and continued training
• Very few good examples of initiatives
to drive the return of the investment
ex-post.
• Benefits realization could be extended
further than to the post-
implementation meeting
2013-08-29Centrum för Affärssystem

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What happens after the implementation?
• The organization is tired
• Exit the Consultants
• Maintenance
• Retreat and hybrid routines
• No more rewards…
• Status Quo
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Organizational change
• Institutionalize the change
• Are we programmed for continuous
change?
• Do we have the energy to continue?
• Do we have the guts to continue?
• Can we find support for additional
investments?
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Post Implementation Evaluation (PIE)
• Ex-post evaluations are dubious
• 20% of IT-related projects
• Counter arguments
– ”No impact…”
– ”Obvious results…”
– ”Hard to find data…”
– ”Hard to find benefits…”
– ”Hard to find the resources and time…”
– ”Hard to find a base-line…”
– ”It will be embarassing…”
– ”Then the benefits will be realized…”
2013-08-29Centrum för AffärssystemGwillin, D., Dovey, K. & Wieder. (2005). ”The politics of post-implementation reviews”.
Information systems journal, 15: 307-319

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Research Note: How can we measure impact?
• Framework developed by
researchers, analysis conducted by
Master thesis students
• Five Wholesalers, two years order data
• Post-implementation focus
• 3% mean-improvement in order
productivity
• Read more: Ask et al. 2011
2013-08-29Centre for Business Solutions
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Ledtid,index
Tid
Ledtidsutveckling alla företag

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Second Wave Implementations
• Investments in securing benefits from
previous investment
• Initiatives to:
– Increase the usage
– Increase the usability
– Increase the scope of the ES
– Adding of additional functionality
– Adding of additional integrations
– Re-design of processes
2013-08-29Centre for Business Solutions

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Research Note: Second-wave measurements
• Study to be conducted…
• Large Packaging solution company
• ERP Go-live June 2009
• All data from the business
opportunity-to-offering process for
the first year
• Complemented with Margin Index
and Hit-rate
• Study of Productivity and Efficiency
• Second-wave project November
2010-January 2011
• Re-take on PI-study after Second-
wave
2013-08-29Centre for Business Solutions

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Recapitulation
1. Describe the implementation process
2. Evaluate potential pitfalls and risks
involved in the implementation process
3. Explain the post-implementation and
Second Wave phases of the ES lifecycle
2013-08-29Centre for Business Solutions